Uber, Deliveroo and Airbnb are all names we hear of, see, and perhaps even use, daily. On average, each day 40,000 people rent accommodation using Airbnb and 5.5 million people catch an Uber. But imagining an economy where just about everything is temporarily ‘rented’ rather than owned, from cars to beds to tools to pets, is much farther from the reality we know, or maybe it’s not.
Defined as an economic system in which people rent assets or services from each other, coordinated via technology, the sharing economy has grown significantly over the past few years and is now valued at $26 billion pounds. Thanks to data from GPS and social networks, technology platforms such as Snobswap, SupperShare, StashBee and MyCuteDesk allow consumers to share almost anything from designer clothes and meals to storage space and desk space.
This prevailing collaborative consumption allows for a more sustainable economy as it reduces overconsumption and allows us to make better use of scarce resources. Renting a car only when you need one, rather than owning one. This means fewer resources are devoted to making cars and fewer cars are left sitting on driveways when they could be better used elsewhere. Technology platforms in the sharing economy can also reallocate underused assets in times of crisis. For example, Airbnb provides free accommodation for people in crisis. Most recently, they have provided those affected by travel bans in the Unites States a place to stay.
As innocent and genius as this phenomenon may appear, the sharing is not all caring. A symptom of the sharing economy is what has come to be known as ‘the gig economy’- characterized by the dominance of short-term, independent contracts as opposed to permanent, contracted jobs. The ‘gig economy’ which has expanded as a direct result of the sharing economy, has come under much criticism for its exploitation of labour. Companies operating in the sharing economy are not firms in the sense that they sell goods or services, but are technology platforms connecting consumers. Taking the example of Uber, it is not a taxi company, but a technology platform which connects consumers, allowing consumers offering a ride to connect with consumers demanding a ride, It treats drivers as independent contractors as they are a technology company connecting driver to passenger rather than a taxi firm themselves. This means there is no holiday pay, sick pay or minimum wage despite the fact that Uber sets the prices and has significant control over the drivers. This leaves worker’s wages much below the minimum wage after all expenses are accounted for which has led to court cases against Uber, the most obvious one being the 2016 case involving drivers Aslam and Farrar. Not only are questions regarding worker’s rights arising but equally questions regarding regulation, insurance and legal liability. Taking the example of Airbnb in San Francisco and Amsterdam, there is question regarding whether those leasing rooms should have to pay the taxes and obtain the permits which established, traditional hotels are subject to pay.
Despite the legal grey area threatening the existence of the sharing economy, it is predicted to be a $335 billion industry by 2025, continually expanding, contributing to a more sustainable economy and allowing those with, to lend to those without.
By Chloe Pryce
(Photo From: The Conversation)