5 Ways The Sharing Economy Can Regain Our Trust
A few years ago, nothing excited me more than the rise of the Sharing Economy. I’d been a casual Airbnb host for years, a TaskRabbit, and occasional DogVacay sitter. I could barely keep track of all of the new sites breaking into the market.
It seemed to me like the ideal way for recent college grads to jump-start their careers as freelancers, small business owners, and entrepreneurs. In particular, it offered a way to connect with new clients in a way that college alumni networks just couldn’t provide.
My hope was that, as these communities grew, so would their commitment to their members. I rebutted concerns about low pay by suggesting that, eventually, we could work to ensure minimum wages and employee health benefits. I argued that renting out one’s home or apartment was not a “business” because most people weren’t out to make a profit.
I no longer have that optimism. The positive experiences I’ve had, and anecdotal evidence I’ve heard from other users, simply cannot outweigh the broad trends at play here.
The dialogue about the Sharing Economy has become hijacked by PR groups, lobbyists, and CEOs of major corporations. It's more focused on the celebrity academics who speak at pricey conventions than the on-the-ground experiences of real Sharing Economy users.
If these companies continue to head in what I see as an unsustainable direction, I expect that my use of these services will continue to diminish.
Here are 5 things the Sharing Economy needs to do to regain my trust:
1. Transactions fees must be transparent.
Unlike some critics, I don’t think it’s wrong to include financial interactions when lending out assets such as a car or a couch. Until we can extricate ourselves from the car and student loans that drove many of us into the Sharing Economy in the first place, it’s unrealistic to expect users to lend out valuable items for free, especially those that depreciate in value with use.
However, nominal exchanges that occur between users of these sites are a world apart from the fees that many of these companies skim off of each transaction — sometimes, without even revealing to users the total amount they’re taking from the exchange. I’m frequently surprised to learn that customers are charged additional fees on top of the cut taken from my earnings.
If Sharing Economy companies are truly committed to trust and transparency, then any profits made through these services should be invested back into the community. The users who are supplying these assets, after all — the cars and beds — are essentially stockholders, and as integral to these companies as their programmers, customer service reps, and CEOs.
2. Companies should be focused on community, not growth.
Any reputable company in the Sharing Economy must be focused on the user experience —of both the customer and the provider — and not on growth for it's own sake. This means not using manipulative ad campaigns to increase its user base at the expense of current members.
The most obvious abuser in this regard is Uber, which has claimed that it’s users can earn up to $90,000/yr (or $35/hr) as a full-time driver. This has been debunked in several articles, which point out that, after deducting gas, insurance, and maintenance costs, a driver's maximum taxable income is at most $45,000 — and that’s if they work on vacation days and weekends.
It’s true that these companies need to spend money in advertising to gain and maintain the critical mass that makes these services practical — however, that’s no excuse for misleading ads and marketing tactics. Too much growth, too quickly, risks watering down the market — which was true even for the non-profit-turned-startup Couchsurfing.org.
3. Companies must not encourage users to go into debt.
The Sharing Economy can inadvertently create a market incentive for people to buy things they wouldn’t have bought otherwise, with the intent of earning back their money by lending it out. This can range from an apartment that’s just out of their price range — to be subsidized with Airbnb rentals — to a car loaned expressly for the purpose of being a Lyft or Uber rider.
Recently, Lyft has been encouraging drivers to sign on to their “Lyft Plus” program, in which they can take out a loan on a “premium” Ford Explorer, presumably so they can earn “premium” fares when they pick up customers. Notice that the landing page is written, not with with the driver in mind, but the customer:
Lyft, which once marketed itself as the “community-based” alternative to Uber, seems to be increasingly concerned with presenting an up-scale, high-class marketing image. Lyft Plus isn't about neighbors giving rides to each other. Rather, it's encouraging its drivers to go into debt on a brand-new car — even while the legality of its service continues to come under fire.
4. “Business” accounts should not be allowed in the peer-to-peer marketplace.
My response to the “renting isn’t sharing” argument was always, “But I’m not renting! We have an airbed for guests — a literal airbed! — and we treat them just like Couchsurfers!”
In my view, Couchsurfing had jumped the shark (a sentiment shared by many users), and I was receiving several requests per day, often from users who had no experience with the site and could hardly be considered part of the “community”. Airbnb served as a kind of filter that weeded out flakes and freeloaders, and allowed guests who were unable to find hosts via Couchsurfing (too male, not single enough) to pay for a similar arrangement.
But what was true in my case simply doesn’t apply to the vast majority of hosts. Tom Slee has an in-depth analysis showing that as few as 1.4% of listings are for “shared rooms”, and that "44% of Airbnb’s business comes from hosts with more than one listing.”
This suggests that the majority of users are not just “regular people” renting out a room, but are either renting out entire apartments in order to make a profit — such as this host who slept in his office rather than “share" his apartment with guests — or are illegally renting out multiple properties at a nightly rate. The problem is not that Airbnb set out to monetize Couchsurfing -- which itself was probably inevitable -- but that is hasn’t done enough to curb these kinds of listings.
5. The Sharing Economy must focus on opportunity and equality.
My early enthusiasm over the Sharing Economy revolved around the notion that “anyone” could be a micro-entrepreneur. Online storefronts like Zaarly and Vayable allowed people to offer truly customized services, from personal yoga instruction to neighborhood tours.
But recent studies suggest that racial discrimination is rampant among sharing services, that user ratings are essentially useless (because most listings are ranked at 4.5 to 5), and that these job prospects do not offer a leg up to underprivileged users.
If Sharing Economy services want to remain relevant, then they have no choice but to adhere to the initial promise of “neighbors helping neighbors” — or they risk exacerbating the inequalities inherent in our society. Do we really want a world where Lyft and Uber drivers inhabit a separate class from those who hire them? Where college grads compete for the chance to do grocery shopping for hire?
My enthusiasm for the underlying ideals of the Sharing Economy continues. Unfortunately, few of the platforms currently available align with those values.
It will take a passionate and committed resistance to bring them back in line.