When Uber and Airbnb first appeared on the scene, they pitched themselves as part of the “sharing economy,” along with other platforms that let people lend out their tools, toys and even pets. These projects promised to share resources, reduce consumption and improve people’s lives.
Then came stories of racial discrimination on Airbnb, of Uber drivers unable to make ends meet, of worsening traffic and mounting housing costs, and of these multibillion-dollar companies strong-arming and tricking regulators. Clearly, there was a gap ― between the talk of sharing and the behavior of corporate organizations designed to make their investors richer at any cost.
But recent moves by Uber and Airbnb hint at a fuller kind of sharing. In letters to the Securities and Exchange Commission, the companies have each asked for a rule change that would enable them to distribute stock to the drivers and property hosts who make their platforms possible. They could then get a payout when the company goes public or is sold. Currently, privately owned companies, like Uber and Airbnb, are only permitted to give equity to investors and their employees. The proposals would extend the sharing they offer from just rides or spare rooms to include the companies themselves.
The idea of giving workers ownership in the company is not new among sharing economy platforms. Uber itself reportedly discussed offering equity to drivers with the SEC last year. The ride-sharing startup Juno promised drivers equity in the company, although it went back on that when the cash from the sale came in. And the office-management platform Managed by Q simply classifies those who provide services on its platform as employees, enabling it to offer stock to all of them.
Sure, the proposals could be a ruse. In Airbnb’s case, the company is preparing for an initial public offering on Wall Street so securing the loyalty of hosts could help boost the stock price. Hosts also serve in Airbnb’s “apptivist” strategy of mobilizing users as lobbyists against local regulation it regards as restrictive. Offering them stock could further secure their loyalty as advocates. Even if the SEC does nothing, maybe just the intentions expressed in the letters could be a public relations victory. Uber, as always, can use any good publicity it can get.
However, if the companies were permitted to share company stock, this could be a modest step in what could be a transformative direction. With wider stock ownership comes broader distribution of the wealth the companies generate, and perhaps ultimately a say in how they are governed, such as voting rights or even board seats.
This strategy could better align the business of online platforms with the interests and needs of their users, and it could be a tool for early-stage startups to attract and motivate user-owners.
This could be a sign that platforms like Uber and Airbnb are beginning to recognize that creating a real sharing economy is actually in their interest. Sharing ownership is a way to turn aggressive startups into more mature, sustainable businesses, securing users’ loyalty and using it to finance growth by making users into investors. Imagine if, rather than simply extracting hefty transaction fees and skirting local regulations, platforms started trying to outdo each other in sharing their companies with the users, workers and communities that make them valuable in the first place. Uber and Airbnb’s modest instincts can be taken much further.
Momentum is building toward a 21st-century redesign for the American corporation. Congress recently passed the first major bill since the Reagan years supporting employee ownership. Sen. Elizabeth Warren (D-Mass.), a likely 2020 presidential candidate, has proposed requiring workers to sit on the boards of companies of a certain size. What if online platforms had to include board representation from among their users, or had tax advantages for doing so? This would help ensure that users receive a fair share of the value they create and they’d have a say in what is done with their personal data.
The future “exit” plan for startup founders, someday, might not mean selling to Wall Street investors but to the users who appreciate their platforms most. New technologies might be able to help ― such as the Bitcoin-like blockchain networks that manage ownership shares with digital tokens ― as well as older corporate structures like cooperatives. New protections are also necessary to ensure that powerful companies can’t take advantage of less powerful users, as Juno did.
The way our economy works today, most of the value corporations create go to their shareholder-owners. Users, workers, customers are mostly passing around the crumbs. As long as these users are the ones opening their homes, driving their cars and posting their data, they should expect and demand more.
Nathan Schneider is an assistant professor of media studies at the University of Colorado at Boulder and the author of Everything for Everyone: The Radical Tradition That Is Shaping the Next Economy, published by Nation Books in September.
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