2013-11-06

Co.Exist

It's Time For The Sharing Economy To Become The Sharing Society

It’s time for the independent workers to steer this new marketplace in a more sustainable direction that helps the people who make it run, not just the companies behind it.

In New York City today, you can rent a room on Airbnb, catch a ride with Uber, sell your old threads on Modabound, and leave your nine-month-old with a shared nanny. The so-called “sharing economy” is revolutionizing the way Americans think about ownership and commerce. It’s also poised to make a handful of venture capitalists in Palo Alto and Tribeca very, very rich. Airbnb is estimated to be worth $2.5 billion. Uber’s valuation is rumored to be $3.5 billion.

To be sure, these companies are valuable for a reason: They created highly innovative, transformational platforms. But what of the tens of millions of independent workers--the Airbnb hosts, the Uber drivers, the Modabound sellers--whose labor is equally responsible for this tremendous wealth? Freelancers are powering the sharing economy, but they’re not in the driver’s seat. It’s time for independent workers to take their rightful reigns and steer this new marketplace in a more sustainable direction. That starts with applying the ethos of freelancing to solve the challenges of collaborative consumption.



Of course, that ethos has evolved significantly over the past decade, as the traditional labor structure of a full-time job with benefits has deteriorated. The image of the pajama clad, latte sipping, MacBook owning freelancer is more myth than model at this point. There are 42 million freelancers in America today--a third of our workforce--and many have embraced an entirely new economic ecosystem. These workers are turning apartments into hotels, Priuses into cabs, and garages into craft manufacturing and distribution centers. Freelancers are increasingly micro-entrepreneurs, building small business and brands, seizing new opportunities to reach previously inaccessible customers and clients, and adding tremendous value to local communities and the nation’s economy along the way.

Likewise, the sharing economy is no longer just a creative way for workers to supplement their sagging paychecks in a struggling labor market. TaskRabbit, Fiverr, Skillshare, and dozens of peer-to-peer platforms are now primary sources of income. A string of micro-gigs is becoming the new normal. Experts predict that the ranks of freelancers will swell to 40% of all workers in America by the end of this decade.

Silicon Valley startups are much lauded for the online and mobile sharing platforms that have reduced transaction costs and made collaborative consumption cheap, easy, and convenient for consumers. The visionary and energetic entrepreneurs who have built these businesses are deserving of high praise. But make no mistake: Freelancers--not companies, websites, or apps--are responsible for the tremendous growth of the sharing economy, which is today valued at an astonishing $110 billion.

This flourishing peer-to-peer marketplace has materialized practically overnight, but it will collapse just as quickly unless we realize that consumption isn’t the only thing that needs to be collaborative.

There are very few, if any, institutions that freelancers can look to for support. While federal tax incentives and modern labor rights would make the sharing economy more viable, Washington is unlikely to come to the rescue, especially while it deals with its own ongoing collaboration crisis. Instead, freelancers should build their own institutions at the local level, from the bottom up.

These freelancer-owned-and-operated institutions should be modeled after organizations like cooperatives, in which members share ownership and profits. For example, my organization, the Freelancers Union, started a social-purpose insurance company, which now provides health care to more than 25,000 members in the New York City area. The company is owned by Freelancers Union, and its profits are used to further our mission and on behalf of our members. Freelancers around the country could create other cooperative institutions to provide retirement savings opportunities, negotiate discounted business goods and services, or even provide private unemployment insurance.

Some forward-thinking local governments and community groups have had great success in creating tech corridors and innovation hubs, such as MetroTech in Brooklyn and The Dirt Palace in Providence. Freelancers could spearhead the creation of similar sharing centers in cities where collaborative consumption has taken root. Imagine an old warehouse in Austin, converted into a subsidized, shared workspace, where freelancers can work and transact, serving as an anchor for supportive communities of sharing.

Collaboration has created the kind of tremendous economic wealth that trend pieces can’t help but gush over. But what has been overlooked is the opportunity to create equally transformative social wealth. It’s time to tap the do-it-yourself freelancer ethic and build social-purpose institutions at the local level. In other words, it’s time for the sharing economy to become the sharing society.

Collaborate or collapse? The choice is ours.

[Image via Shutterstock]

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14 Comments

  • Bruno Rivard

    Profit sharing cooperatives are in the game to make money and so are constitutively demanding institution including demanding members, as is obvious, greed is epiphenomenal; and taking action to fulfill needs, desires and the capacity to aquire the means to do side projects, labors of love, is a great asset that betters them and their colleagues because they are likely to become innovators. Some features of profit sharing coops help this; members of profit sharing coops are less likely to be laid off increasing their self confidence, the income differential is lower (1:3 to 1:12 in the Mondragon model, opposed to the 1:300+ in big psychopathic capitalist corporations) making for more well paid consumers-producers. A marketplace of coops tends to fill out with more firms or teams that are smaller on average than corporations. The variety of vendors is greater. If they eschew shareholders, they indeed turn their backs on capitalism to be better capitalists than capitalists themselves.

  • Charles_Christie

    A great article, but one that forgets a simple word: GREED. These wonderful 'sharing economies' don't share anything other than their touted products and / or services. The ridiculous wealth they generate never goes back to the minions who helped generate it. I appreciate your notion of sharing doesn't extend to revenue, but ultimately that's all these 'sharers' are interested in.

    The 'sharing community' should therefore become the 'demanding community' - demanding better rates for their labors and demanding better recognition for their skills.

  • kindredhq

    I couldn't agree more, and it's something that has been bothering us for sometime at Kindredhq.com. We're a growing community of freelancers based in Europe and we share many of the aspirations of the Freelancers' Union.

    I know many wonderful social entrepreneurs who are driving great sharing economy businesses, but I'm deeply concerned at the way that talent and dignity are so often undermined some of the technology led 'sharing' platforms.
    There is only one way to ensure that we create a sustainable backbone for people to enjoy an independent career, and that is to pay freelancers on time and pay them fairly - not ask people to work for free in the guise of sharing.

  • richardaltman

    sharing economy is simply "Additional Options" For Money Than What is Currently...(you'll love this) Available. To recap the takeaway here is: additional options for goods and services, On Top, of those that are already in existence for the same And Slash Or Related good/services. Dwelling on current literary definitions merely indicates you're not a fan of the song "Stairway To Heaven", nothing more. Enjoy the day of which your habits and the environment they take place have little to do with you, if they are going to change, you will be helpless to anything except adapt. You're Welcome, I welcome any comments or replies.

  • Gregory H

    Your a little confused between "literary" and "semantic." The former having to do with literature, the latter having to do with the meaning of words. As for "Stairway to Heaven," that's metaphor. There is no "metaphor" in the use of the phrase "sharing economy," as laughtiger points out, this term has been co-opted by clever marketers.

    FastCo editors are making sure their titles are buzzword compliant link bait. Which is not to say that Horowitz's article is not interesting, it just conflates sharing with cooperation. There is a difference between a "sharing economy" (i give you my extra onions, you give me your extra squash, or I give away baby clothes on Yerdle or Craigslist free) and a "cooperative economy," and it seems to me that Horowitz is really talking about building a more cooperative economy and society where individuals are more empowered through peer-to-peer relationships, organizations, and transactions than traditional corporate and commercial ones.

  • Gregory H

    I think that the title of this post, and the buzz-phrase, "Sharing Economy" is really inaccurate for this article. Sharing usually does not include the exchange of money. When money changes hands, this is usually called commerce. When I pay someone to drive me from A to B, that's not ride sharing. When I pay someone to stay in their apartment for a night, that is not apartment sharing. When I pay someone to tweak my business cards, that's not sharing.

    This might be about a peer-to-peer economy. It might be about disintermediation of service delivery. It might be about utilizing the excess capacity of resources (human, and physical). It might even be about collaborative consumption (another buzz phrase which, when you break it down, doesn't make that much sense) but freelancers banding together is not about the sharing economy.

  • laughtiger

    I absolutely support the idea Horowitz is pushing, and the Freelancer’s Union as well. However, there is a more cynical side to the way the term “sharing economy” has come to be used, which works in direct opposition to the change this article is arguing for.

    The “sharing economy” originally meant a non-monetary economy based on reciprocity, a challenge to capitalism itself. The name has since been coopted by corporations like AirBnB and Uber, and applied to the freelancing/micro-gig
    economy which Horowitz is talking about. The reason for this is not simply a desire to describe the forms of “collaborative consumption” often associated with this. The deeper, darker motive is about intentionally degrading the status of workers, by redefining what they do as “sharing,” not as “work.”

    So the taxi drivers, delivery drivers etc. become “taskrabbits,” or“friends on demand.” In the process, the legal status and achievable power of workers is eroded further, along with the potential for the sort of collaborative innovation that Horowitz is hoping for.

    So the call for a “sharing society” doesn’t go far about, because it doesn’t question the sneaky role the word “sharing” has, tragically, come to play. An economy (or “society”) based on sharing is a great idea and should be supported. Those who would support it, and who want to support the freelancers and precarious workers who are the backbone of Taskrabbit, Lyft, etc., should be careful to reject this misuse of the term “sharing."

  • Sara Horowitz

    This is really interesting and important, laughtiger. That's why we're trying to reframe the conversation -- it's the people who make the new economy work that need to be the focus. I tried to get at some of that in this piece: https://medium.com/changing-ci...

  • richardaltman

    It's an inevitable no brainer. I'd already personally like to move on to the next phase which would be the sharing economy in terms of non physical objects and not just mp3's

  • Sara Horowitz

    Thanks, Richard. We're definitely just at the front edge of whatever this economy is about to become.