How can the sharing economy benefit workers?

Sensemaking / How can the sharing economy benefit workers?

Will sharing entities become part of a larger movement that seeks to redistribute wealth and foster participation? Juliet Schor explores the societal implications of a new way of working

By Juliet Schor / 26 Feb 2015

While the discourse of novelty in the sharing economy is overrated, there is something new afoot: what I call “stranger sharing”. Although there are exceptions (e.g. elite travellers in ancient Greece), people have historically limited sharing to within their own social networks. Today’s sharing platforms facilitate sharing among people who do not know each other and who do not have friends or connections in common. 

The role of ratings and reputational information is at the center of questions about social capital. The conventional wisdom is that the provision of crowdsourced information on users is what leads people to feel safe about interacting in intimate ways with strangers.[1][Stanford sociologist Paolo] Parigi’s research, however, uncovered a paradox: the more reputational information the site provided about people, the less users formed strong bonds.

Sharing economy sites can also reproduce class, gender, and racial biases and hierarchies. In our research at a food swap, my team and I found that cultural capital, a type of class privilege, limited the trades members were willing to make. Only participants with the “right” offerings, packaging, appearance, or “taste” received offers or, in some cases, even felt comfortable returning. In our time bank research, we found that some people screen potential trading partners by grammar and education, and that many highly educated people were unwilling to offer their most valuable skills (like programming or web design), preferring instead to act as amateur electricians or manual workers.[2] A recent study also reported evidence of racial discrimination among Airbnb users, finding that non-black hosts were able to charge 12% more than blacks for comparable properties.[3]

There is less clarity about how the platforms are affecting labour conditions. Part of the difficulty in assessing the impact of these new earning opportunities is that they are being introduced during a period of high unemployment and rapid labour market restructuring. Working conditions and protections are already being eroded, real wages are declining, and labour’s share of national income in the US has declined to historic lows. If the labour market continues to worsen for workers, their conditions will continue to erode, and it will not be because of sharing opportunities. Alternatively, if labour markets improve, sharers can demand more of the platforms because they have better alternatives. The two effects will work in opposite directions: with destruction of demand for legacy businesses and growth for sharing companies.

An online platform with a good rating system should improve labour conditions. Consider the market for home health aides, where agencies currently take an enormous fraction of hourly fees, sometimes more than half.[4] A peer-to-peer (P2P) matching platform would take a lower fraction, enabling low-paid workers to earn considerably more and have more autonomy over which jobs they accept. Where owners, agencies, or other actors are extracting rents, P2P platforms should do what they claim—distribute value to consumers and producers and away from gatekeepers and rent extractors.

Ultimately, the question is about how much value providers on these platforms can capture. An alternative to the co-optation path is one in which sharing entities become part of a larger movement that seeks to redistribute wealth and foster participation, ecological protection, and social connection. This will only happen via organization, even unionization, of users. Indeed, the question of whether providers should organize is now firmly on the table, although it is too early to know how things will evolve.

Airbnb has begun to encourage its users to organize. In 2013, the global head of “community” at the company co-founded Peers.org, an attempt to build a social movement of sharers. Not long after, Airbnb created its own organizing platform for guests, hosts, and employees, which has led to the creation of numerous local groups of users who are coming together on and offline for a variety of purposes, including sharing advice and affecting public policy. The company wants these groups to push for favourable regulation. But they may develop agendas of their own, including making demands of the company itself, such as setting price floors for providers, pushing risk back onto the platforms, or reducing excessive returns to the entrepreneurs and the venture capitalists. On the labour exchanges, where the need for organization is perhaps most acute, providers could push for minimum wages.

Existing platforms could also potentially become user-governed or cooperatively owned, an outcome some voices within the community are advocating. As many online communities have shown, the online environment can be conducive to organizing against unpopular policies, software changes, and practices. The fact that users create so much of the value in these spaces militates in favour of their being able to capture it, should they organize to do so.

Juliet Schor is Professor of Sociology at Boston College. This is an edited extract from an article originally published by the Great Transition Initiative

Image credit: Paul Hamilton / Flickr

Sources:

[1] Recent studies have found inaccuracies in ratings systems, especially the tendency to overrate positive features and under-report bad experiences. A colleague and I review recent studies in Juliet B. Schor and Connor Fitzmaurice, “Collaborating and Connecting: The Emergence of a Sharing Economy,” in Handbook on Research on Sustainable Consumption, eds. Lucia Reisch and John Thogersen (Cheltenham, UK: Edward Elgar), 2015.

[2] Juliet B. Schor et al., “Paradoxes of Openness and Distinction in the Sharing Economy,” Unpublished paper, Boston College, 2014.

[3] Benjamin Hardin and Michael Luca, “Digital Discrimination: The Case of Airbnb,” Harvard Business School Working Papers, 2014.

[4] Jane Gross, “Home Health Aides: What They Make, What They Cost,” New York Times, December 30, 2008, available at http://newoldage.blogs.nytimes.com/2008/12/30/home-health-aides-what-they-make-what-they-cost/.

What might the implications of this be? What related articles have you seen?

Please register or log in to comment.

Suggested