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.