Would you like to share?
It appears the term ‘sharing economy’ is suffering an identity crisis due to a lack of ownership. Ironic? Quite.
The sharing economy was probably originally called ‘the neighbourhood’. It was a congenial place where people regularly chatted over low fences; fences over which they occasionally lent each other things. Somewhere along the line, we decided privacy was more important. We built higher fences. We bought our own stuff. We worked harder (or accepted more debt) to pay for the stuff. We fed the machine.
When the term first emerged some time in the early 2000s, it commonly referred to peer-to-peer systems designed as an alternative to hyper-consumption, often involving no financial transaction. The goal was to reduce unnecessary purchasing (and therefore production), leave a lighter environmental footprint and build community. Some relate it to the Millennial response to the 90s recession, which forced a rethink about property ownership and inspired the minimalist living movement.
Many successful examples of the purist model still exist for example, Freecycle; timebanks; community gardens and repair cafes.
However, by far the largest growth is in another area; in platform, peer-to-peer businesses that give people access to a resource they don’t want to buy (or can’t afford) and give those at the lending end of the transaction a source of income from underused assets. It started with Uber, quickly followed by AirBnB and now covers a vast range of options from niche items like camera gear (BorrowFox), to storage space (StashBee) to just about anything (Fat Llama).
The ‘sharing economy’ label has also been stretched to accommodate platforms, like Kickstarter, Indiegogo, PledgeMe or Givealittle, which enable collaborative investment in tech, design, arts, charity and social good projects.
And then there are the companies that provide access to a resource under a ‘sharing economy’ umbrella but are really just glorified stores or rental services. Sharewashing (like greenwashing) is a thing.
Nowhere is the confusion more evident than in China, which has declared that sharing will comprise 10% of GDP by 2020. However, included in its definition are businesses like Netflix and Amazon, which would not be considered part of the sharing economy in other countries.
Does the vagueness of terminology matter? Possibly not but pulling this little thread can trigger a bigger unraveling.
Innovators and consumers interested in helping to solve the world’s big problems need to consider the big picture impact of sharing economy ventures. Are they improving economy of resource use, providing democratic access to goods and services or even places (thinking of recent crowdfunded beach purchases)? Are they improving environmental outcomes and forging a sense of community? Or are they just providing more grease for an increasingly unsustainable socio-economic machine?
US research is showing that ride-sharing services are contributing to an increase in congestion and emissions. Images showing mountains of discarded bikes from Chinese bike share schemes went viral. Aside from some of the labour impacts of this new source of competition, there is also commentary on how minority and lower socio-economic groups are benefitting less from the sharing economy, either from lack of access to technology, platform design that doesn’t accommodate them (e.g. in the case of visual impairment) or from straight out discrimination (e.g. algorithms that divert share-ride drivers away from poor areas).
It’s the same old story of unintended consequences. Like ‘eco-friendly’ cleaning cloths contributing to microplastic pollution. Like biodegradable alternatives to plastic that need commercial compost systems in a country where these don’t exist. Like...many other things.
The sharing economy has huge potential, if we approach it with the right spirit and due consideration of its impacts in context. It needs holistic systems and circular design thinking to elevate it beyond a nifty sales pitch.
Let’s make sure our sharing is really caring.
Join the discussion about the sharing economy at our next Future of Work MeetUp on Wednesday 20 February or develop your own sharing business or idea through our Master of Technological Futures. Enrolling now for a March, July or November start.