The sharing economy deception / by kevin murray

All sorts of pundits want to sell the basic illusion that the sharing economy, or the gig economy, somehow makes the world a better place for those taking part in those sorts of things.  While, to a certain extent, it makes sense for somebody that owns a car and wants to make some side money, to then utilize their car to do so, by, for example, driving people around to their destinations, or by picking up and dropping off food deliveries, it sure isn’t as financially rewarding for the drivers that are utilizing their cars, their gas, their insurance, and their time to actually accomplish these things as it might seem.  So too, while Airbnb seems like a really good way to rent out your condo or house to someone else and to make a little side income or even to buy a rental place specifically for that purpose, once again, the hospitality business, isn't always going to be just smooth sailing and without its own troubles.

 

There are some basic problems with companies such as Airbnb and Uber, of which, the most basic problem with them, is that they essentially represent the middleman, and these middlemen are taking a really nice slice of the business, a slice so big, that logically, for everybody that is a driver for Uber or similar, or renting out their place with Airbnb or similar, should seriously want to think about it.  For instance, those that drive for Uber, are considered to be independent contractors, but don't seem to be able to have the independent authority to do much about the price of a ride, other than to accept a given ride or not.  While, Airbnb does allow the owner to set the price, there are the various Airbnb fees that the host must pay for in regards to the convenience of utilizing Airbnb, which the owner must absorb as the cost of doing that business.

 

Basically, all of the major players in the sharing economy, are taking a meaningful amount of the contract price, essentially for creating the app and presenting a marketplace, while absorbing none or virtually none of the costs of the independent contractors that do the actual work and provide the actual service to the customers; in addition, Uber and Airbnb aren't really risking anything of their own, for providing that service.  So that, the fees or the percentage cut that these companies charge or take from their independent contractors, most definitely has a significant impact on the income derived by the hosts and drivers, and is the monetary fuel that creates the worth of an Uber or Airbnb.

 

Additionally, the ride sharing business predates Uber, and is better known as a taxi cab; so too, the hospitality industry predates Airbnb, of which, there already exists a multitude of hotels, motels, and other sleeping facilities throughout the nation.  The salient difference is the disruption that Airbnb and Uber bring to the playing field, which really comes down to their skilful ability in being able to circumvent to a very large extent regulatory and licensing costs so as to successfully undercut the existing players, as well as to piggyback on what is already preexisting.  They then pretend that all this is a quantum leap of creating a new kind of sharing economy, which benefits independent contractors and customers, in which, truth be told, based on the estimated market capitalization of Uber which recode.net puts at $72 billion, puts a real lie to that tale, and demonstrates fairly conclusively that the true beneficiary of the sharing economy is actually the middlemen, the market makers, that take such a huge bite of the action, that the independent contractors that participate in this gig economy, really aren't getting their fair share.