(Matt Davies via GoComics.com)
MisterMix’s post reminded me that I wanted to share Kevin Roose’s take in NYMag, “The Sharing Economy Isn’t About Trust, It’s About Desperation“:
Wired‘s cover story this month is about the rise of the “sharing economy” — a Silicon Valley–invented term used to describe the basket of start-ups (Uber, Lyft, Airbnb, et al.) that allow users to rent their labor and belongings to strangers. Jason Tanz attributes the success of these start-ups to the invention of a “set of digital tools that enable and encourage us to trust our fellow human beings,” such as bidirectional rating systems, background checks, frictionless payment systems, and platforms that encourage buyers and sellers to get to know each other face-to-face before doing business.
Tanz’s thesis isn’t wrong — these innovations have certainly made a difference. But it leaves out an important part of the story. Namely, the sharing economy has succeeded in large part because the real economy has been struggling.
A huge precondition for the sharing economy has been a depressed labor market, in which lots of people are trying to fill holes in their income by monetizing their stuff and their labor in creative ways. In many cases, people join the sharing economy because they’ve recently lost a full-time job and are piecing together income from several part-time gigs to replace it. In a few cases, it’s because the pricing structure of the sharing economy made their old jobs less profitable. (Like full-time taxi drivers who have switched to Lyft or Uber.) In almost every case, what compels people to open up their homes and cars to complete strangers is money, not trust….
As Sarah Kessler discovered in her Fast Company investigation, it’s hard to make it in the sharing economy. Many of the people renting out their labor and goods through these services will end up making a fraction of what they did at their full-time jobs, and having none of the benefits. Tanz writes that “in the sharing economy, the commerce feels almost secondary.” That may be true for the buyers, but it certainly isn’t true for the sellers, for whom these transactions are often an important source of income…
During the first Gilded Age, “taking in washing” or “letting the spare room” was a derisive indication that one had come down in the world. But it’s all about the marketing now, so our Oligarch Overlords would prefer we plaster on a happy face (fist-bump your Lyft clients! Solicit ‘likes’ on multiple social media!) and call it a Sharing Economy…
RepubAnon
Funny how they call it the “Sharing Economy” when those at the top, such as the Kochs and the Waltons, refuse to share their profits with the folks who work for them…
I guess sharing, like taxes, is only for the “little people.”
? Martin
I think there are aspects of the sharing economy that aren’t. My grandmother would have been all over AirBNB because she loved having guests and meeting people, particularly people from other countries. She would have rented out her empty rooms just for the company. But the value in AirBNB is the space, not the time of the rentier, so it’s really filling our unused space, rather than our unused time. Lyft and Uber are the reverse. The value is in the time of the driver, and someone with a full time job is unlikely to be participating as a driver.
And I think there’s legitimate room for it in far-flung communities. Farmer co-ops work around a not dissimilar concept.
But I otherwise agree with the thesis.
Baud
Isn’t the idea that the “Sharing Economy” involves Web or app based services that link buyers and sellers? That’s what distinguishes it from just plain old looking for extra work.
Mnemosyne
Not to mention that things like Airbnb encourage tax dodging. That 14 percent hotel tax in places like New York and San Francisco adds up to a lot of city services.
Violet
@? Martin: I’m sure there are people who do it because they want to meet interesting people. In fact, some people in my neighborhood rent out a room in their house on Airbnb and apparently have made some good friends that way.
The thesis of the article is still strong, though. If the economy was really strong how many people would be driving people around via uber car? How many people would decide it’s too much of a hassle to rent out their extra room and they don’t need the money that much. If companies were begging for workers, I think some of those markets would contract.
Violet
@Mnemosyne: Not to mention the prostitution.
Tommy
@? Martin: I don’t live in a huge metro area, but close to one with bus transportation two blocks from my house. Rail three miles away. I am single. No kids. I have a five bedroom house. I also work out of my house so I am around. It isn’t a mansion, but very comfortable. Lots of beds. Big TVs. A nice kitchen. Huge deck. Oh and I have a lot of toys for people to play with. People could past the time.
Lets just say I thought about posting something on AirBNB. The metro area next to mine, well some of the most loyal fans in all of baseball. People travel from all over the midwest and to a large extent the nation to see them play for a weekend.
Plus, as you said about your grandmother, well I like to met new people and a few extra bucks might be nice.
Heck I’ve seen in places like San Fran and New York (and this has been going on for years) people host dinner parties. I have so much room I could seat 30 people in my “formal” living room, that I don’t actually use as a living room. It just has furniture in there that is just there. Many of my friends that have solid incomes think Outback is fine dinning and are stunned at how I can cook. They don’t know anything about wine. Good beer. Coffee.
I’ve been thinking of trying the high-end dinner party thing. Of course it would be illegal for me to charge for a meal, but people get around this by taking donations at the door. I don’t really need the money, well I guess we all could use a little more money, but I could see how both if done correctly could turn into something more then just some pocket change and “fun” at the same time..
Tommy
@Violet: There was a story a few weeks ago that some guy rented out like his $10M condo in New York and they filmed a high end porn movie there. He was not a happy camper.
Violet
@Tommy: That sounds like house concerts but with food.
? Martin
@Violet: @Tommy:
Think of these things clearly in terms of ‘what is being rented’. For AirBNB it’s space – something that tends to be a function of capital, not income or time. So Tommy has unused space (as did my grandmother after her kids moved out) and this is a way to recover something on that investment. In many cases it turns into ‘rich get richer’ market, but it can also benefit the young couple that buys a new house planning to fill it with a family, but hasn’t gotten to that stage yet, and to empty nesters that invested heavily in a house and now need some income to pay for their kids college.
Uber isn’t renting a car. That would be Zipcar. Uber is renting a driver. It’s effectively a non-skilled job where the driver adds little to no added value (knowledge of area, recommendations might have some value). It might work as a 2nd job, or for a stay-at-home mom/part time worker, but it’s poor use of time for anyone earning a decent wage.
The article gets that part of it right, but I think it’s too wide of a net.
And Uber and Lyft probably only have about 10 years left in them best case. Zipcar or some other rental service will move rapidly toward self-driving cars as soon as they hit the market (sooner than you think). That eliminates the driver wage from the equation, as well as the risk for both parties.
? Martin
@Tommy: He was only pissed because studio fees are much higher than room rates and he lost out on some income.
kc
@Tommy:
You sound like the perfect person to host a big Balloon Juice party. :)
(I was gonna say “BJ party” but thought better of it)
bargal20
@? Martin: Welcome to Johnny Cab!
NotMax
@Tommy
Not trying to be a wet blanket, but –
Might want to go over your homeowner’s insurance policy with a fine-toothed comb beforehand to make sure it covers the multitude of claims such undertakings could possibly elicit (and whether operating as a business, even if not in a formal way, is covered at all).
And a cautionary anecdote: Friend of mine tried something similar many, many, many years ago. Somebody told someone else who told someone else (and so on) about the nice things in the house, and within 6 months the place was robbed.
Violet
@? Martin: Yes and no with the Airbnb being only about space. Sure, you have to have the space to rent it. But it also takes time. You have to set up the room and clean it when the guests are gone. Depending on what you’re offering in your rental (they vary from a room in a house to a separate apartment or house), you might also have to clean a kitchen. Some of them provide breakfasts, so you as host would have to cook and clean for additional people. Or maybe you provide a stocked kitchen–shopping and more cleaning. There is time involved.
The time is a little offset in that you maybe don’t have to be there at the exact time the guests are, unlike with the driver services where you have to be there at the beck and call of the person hiring you. But it’s not completely offset because when the guests come to your Airbnb then you have to have things ready. If that time isn’t convenient for you, too bad. You agreed for them to come so you have to be ready.
I know some people who rent out their home on a daily or weekly basis. I also know the people who manage it for them. And I know just how hard they have to work to turn it around for the next group. Some people are neat and others are very messy. It can take the better part of a day if the people left it a wreck. It takes time. So with AirBnB you are also selling your time.
Tommy
@Violet: I think I saw the story on 60 Minutes, but the just of the story is similar to what I envision. My friends are white collar professionals. 35-45 years old. Most decided to get married later in life and have just had or are having children. So they have young children that need adult supervision. In almost all cases they both work 10+ hour a day. Date night for them is a rare thing.
And if they hire a babysitter, go to some chain place like Outback, and then to a movie they could be spending $100. They can afford that, but honestly I don’t think they find it that interesting.
So I have a dinner party every 30-45 days. For well under $100 I could make an epic meal and still make some money. People talk to other adults with similar lives and problems. You know adult conversation instead of talking with a five year old girl about Frozen (the topic of conversation 24/7 in my nieces house).
I don’t know, I think it could work. I mean how doesn’t like good food. Good wine/beer. Good conversation.
Tommy
@NotMax: LOL. Homeowners association. What is that (I know what they are). We don’t have those in my town. In fact until just last year my subdivision was in an unincorporated part of town. I don’t have to ask anybody to paint my house an color I want. Put up a flag pole. Do pretty much anything I want. But I do get your point. Many people deal with associations and I am VERY sure they would frown upon this for like 20 reasons.
Violet
@Tommy: You could be like Jim Haynes and invite the world to dinner.
Also, his personal website with more info. And a contact page if you’d like to attend one of his dinners.
WaterGirl
@Tommy: I think she said “homeowner’s insurance” not “homeowner’s association”.
Tommy
@kc: I would love to, but in my experience here there might only be 1-2 people within 30 miles of me. I am sure many more in St. Louis, but not sure how many would like to make the 75+ mile round trip to the Illinois side of the river.
Tommy
@WaterGirl: Whoops you are correct. My bad. I just have an “issue” with homeowners associations and guess I read that sentence the way I wanted to rant for a second :).
@Violet: Very, very interesting. Thanks for the link. Bookmarked. I have two good friends that know a lot more people then I do. One runs an independent spices, wine, beer, and tea/coffee shop. Another a “hip” antique store. I am sure if I pitched them the idea they’d find plenty of people that if the meal/conversation was good, I might be able to make it work. If I bought all the wine/beer/tea/coffee from Heather’s store, well I am SURE she’d be all in. Oh and the lady that lives behind me (which I once dated and we are still good friends) is a yoga instructor. Pretty sure a flyer at her classes couldn’t hurt as well.
Tommy
@Violet: I of course know what AirBnB is. Read a ton about it. Spend no time on the site. I need to do that to learn more about how it works. Although as I said I have a ton of space. I wouldn’t mind guest. But if folks wanted it, I’d like to do more then just say here is your room, bye. I’d like to cook. I’d like for them to tell me what they want to do when they are here, cause I now the area well and there are so many hidden gems of things that even people who live here don’t know about.
Clearly doing all that, well I’d think I could charge more. Maybe not at first, but if the reviews are off the chart then I could.
jc
a “set of digital tools that enable and encourage us to trust our fellow human beings,” such as bidirectional rating systems…”
Smart phone rating systems are a creepy way to keep service workers in line. Do you really need to rate your barista’s performance in serving you a paper cup of coffee? How many stars does the Uber cab driver rate for carrying you ten blocks to the new trendy restaurant? Did the waiter kiss your ass well enough? There are lots of people who will burn “the help” just because he didn’t show sufficient obsequiousness or she didn’t wear enough flair.
scav
@jc: or, just for the hell of it.
Violet
@Tommy: I looked into it for a trip. The places vary from a room in a house to a separate apartment or house–or in one case, a boat! There’s just a bed, a bed with sitting area, private entrance, shared space with the homeowner, apartment with kitchenette, home with full kitchen, etc. Lots of variation. You can search by just a room or separate accommodation. I looked around but honestly I didn’t think it was that much cheaper for where I was looking. I’m sure it varies by location and time of year.
srv
@? Martin: She could have tried couchsurfing.
@Tommy: My 30-something urb/suburb friends having kids are having to pay for full-time nannies. If they had a weekly dinner party with their friends, they could bring the kids, put them with a baby-sitter and have a better time than Outback.
But today’s suburbs, it seems all their friends are in another suburb and they don’t hang with the locals.
Tommy
@jc: I oversaw/ran a customer service department for a small IT firm. I was looking at the CRM logs and about 75% of the comments about our support department were terrible. But we had a 93% annual renewal rate. I started to call clients. I quickly found out there are a group of people that just like to complain. Yet those that got good service, they are happy, well either they don’t think they need to note this to management or just don’t think about it. What is the phrase, “the squeaky wheel ….”
This was years ago, but I now have a New Years resolution I renew each year to thank at least one person each week (if not more) for good service. Too few people do this IMHO.
Violet
@srv: Yeah, but they’d have to clean the house. Pressure.
PurpleGirl
For years my former boss had the month of August off (vacation). In alternating years she would attend writers’ colonies/workshops, etc. In the off years she would travel for the month. At some point she began renting her apartment to friends of friends who wanted to visit the City and for whom a hotel was too expensive. I don’t what she charged — probably her rent plus utilities for the month. Doing this helped her be able to afford to travel or be at a writers’ colony.
It worked out pretty well for her.
Tommy
@srv: That is an interesting thought, bring the kids and the babysitter. I have a five bedroom house. It is what is called split level. You come in on the ground floor and either go upstairs or downstairs. Downstairs is half above/below ground and fully finished. One room is almost a fourth of the size of my entire house.That room has a standard pool table. All my Legos. Board games. Multiple couches. Huge tables.
I need to build out this idea, cause there is a ton of room down there.
I had thought of using my large back porch, which is off my dinning room, which is connected directly to the kitchen. Then my “formal” living room that is directly connected to the dinning room. I could sit 35+ easily here.
Had not thought of allowing children to be downstairs. Mistake on my part cause I spend a ton of time with my niece. Parents are way more anal about the safety of their children, it at least seems to me, then they were when I was a young kid in the early 70s. Not saying they loved me less, but not helicopter parents we have today (and yes I count my brother in that group).
Violet
@PurpleGirl: I sub-let an apartment like that when I was in college. The owner worked in another city for the summer. She was in the arts and didn’t have that much money so she made rent by sub-letting her place while she was gone. Worked out well for everyone.
srv
Now we can punch religious folks.
Seanly
There is a reason bartering & sharing, odd jobs, etc. are called a shadow economy. I love how masters of the digital universe take credit for this new part of the economy. A) it’s been around forever, & B) their tools may allow more people to do it, but I think folks are making a lot less money doing the work.
My stepfather was forced out of a major corporation at age 52 and took an early retirement. He grew up working on cars and was a carpenter in the Army (we have a family saying – If Paul can’t fix it, it ain’t broke). Throughout the 90’s, he was a house husband and did painting & handyman jobs under the table until my mom retired just a few years ago. He never needed a fancy app to get cash on the barrelhead work. And he certainly didn’t need some techbro trying to weasel his pay down.
Violet
@Tommy: Again, check your homeowners policy and ask around before charging money to people for dinner and a babysitter. You might be running afoul of daycare laws and restaurant laws. There could be ways around it–like the house concerts ask for a donation but don’t charge–but you need to be sure.
If you were having a party and funding it all yourself it would be okay but if something happened to one of the kids, there would still be potential problems for you. Make sure all the parents are on board with whoever you’re hiring to watch the kids. Maybe all the parents chip in for a “childcare fee” and that way they’ve bought into it.
Try a casual dinner to start and make it easy for yourself and comfortable for everyone else. See how it goes. Maybe expand to once a quarter. But go low key to start so people don’t feel they have to dress up and be on their best behavior.
srv
@Tommy: Huh, like Violet says, pressure for the hosts. So you solve the problem by becoming a host for a dinner or birthday party. Offer a baby-sitter option. Get a pop-up cook.
Probably would need a cash bar though. Need to work out parking, neighbors would complain.
Or, you do hosting at their place for a price. Cleaning, baby sitter, food, catering for the masses.
Mnemosyne (iPad Mini)
@Tommy:
My small city in the LA area had a house on Airbnb that advertised itself as “party central.” Eventually the neighbors complained so much (and the police were called so many times) that they got shut down.
That’s another aspect of Airbnb — what if your neighbors don’t want a constant parade of strangers in the hallway?
Tommy
@Violet: @srv: I will check my insurance, but feel I am pretty safe there. I know I can’t charge. Only said this in my first comment on this, but you have to take donations. You can’t charge for a meal or have a cash bar.
I would also start small. Not try 35+ to start. Maybe a dozen is a good number. I’d have to scale cause I don’t in fact have an industrial grad kitchen. If I did something like a Crown Roast I could feed 35+ people. Something like a fish filet, well I couldn’t do that. Need to be a whole, larger fish. Clearly some of the courses would need to be cooked before hand. Not something I often do. Many things to think about.
Also would not provide a babysitter. The parents would have to bring their own. I know there are legal issues there. I like the concept, but the more I think of it, it kinds of defeats the purpose of just one night away from the kids if they are just downstairs.
Tommy
@Mnemosyne (iPad Mini): I would NOT want that. I am 44. I am not 25 anymore. Also somebody mentioned parking. I am good there as well. There is a 5,000 acre field in front of my house and an industrial park at the end of the block. Plenty of parking. I also live in a pretty laid back community (or at least my subdivision). Kind of a live and let live. If I said hey I am having a dinner party this month and maybe 20 cars will part out front, nobody would have a problem. Heck I wouldn’t even have to tell them I don’t think, but I would cause I tend to be both anal and polite.
For all you posting questions and suggestions I APPRECIATE it and writing them down cause I think I am going to try this. But I should have noted the city I live in and my neighbors are the LEAST of my concerns.
currants
OT–any Mainers here? MomSense is, I know. Call yer legislators, get ’em to override LePage and expand Maine healthcare. Links in letter below for more deets.
Violet
@Tommy: Suggestion: Start by just having a dinner party where you cook something easy–burgers and chicken on the bbq or something. You pay for the whole thing that night–just like if you’re having a party. Then ask the guests about what you’re proposing. Would they be interested? How would childcare work? What sort of food? How often? How many people? Do they need to know the people or is that not the point? How comfortable are they with strangers in the house if their kids are there? Etc. Start small, don’t charge right away, get input and go from there.
NotMax
Talk above of “ways to get around that” reminds me of what used to happen regularly when I frequented auctions in rural PA. Was working year-round for a summer camp, and auctions were a good place to pick up varieties of stuff for a (relative) song.
Anyway, there were occasions when another camp went belly up, or a ski lodge or some such commercial property, and among the items being gotten rid of were a lot of used pillows. Kicker was that it was then (and maybe now, too) illegal to sell used pillows.
So the auctioneers brought a supply of paper cups with them, and would hold them up one at a time. “I’m now auctioning off this paper cup. And today, every paper cup comes with – absolutely free – 3 pillows. How much am I bid for this paper cup?”
Iowa Old Lady
@Violet: That is so cool.
Tommy
@Violet: It wouldn’t be burgers, but pretty much what you said is what I am thinking. I have 4-5 people that are friends, but not close friends. People that would allow me to network to a larger audience that I think would be interested in something like this.
I’d invite them and do exactly what you said. No charge. Instead a proof of concept and then ask them the questions you noted. How would you think it would work best? Types of food? Courses or family style? Number of people? Kids or no kids? Price point? How often?
Or the best question of all, are you interested and/or would you attend and invite your friends?
Then I would take that input and move from there. The largest group of people I have cooked a complex meal for was 9. I would scale up only after I nailed that. Not start with 30+ people. Start at maybe 10. Then 15. 20. 25. You get the point.
Tommy
@Violet: Oh I didn’t mean to belittle the burgers and chicken thing. But that is half my point of my concept. People by me are burger and chicken cooking experts. That is what folks around me eat. It is a passion to cook a fine burger or some BBQ chicken.
I could see myself getting into a pissing match over if I used a dry rub.
What people don’t eat by me are other foods. A little more complex.
Little story. That lady that lives behind me I said I dated. A yoga instructor. We had a date and I was going to cook for her. Her ex-husband said he wasn’t taking his kids for the weekend (he is a total shithead), so she had to cancel. I said bring them over. I was looking for a little romance, but I get for a divorced women with children dating isn’t always easy. I wanted it to be.
She asked in a polite way what I was cooking. When I said I was having jasmine rice, whole salmon, and artichokes she said she’d never had any of those things (I wasn’t trying to be fancy BTW, this is what I eat). Clearly her children had not (9 and 11 years old). They wouldn’t eat it. I said lets just try. If they don’t like it I got tator tots. Chicken fingers. Sure I can find something they will eat.
She was blown away. They cleaned their plates, adult size plates and wanted more. Even to this day and that was four years ago, when I see them they often remark they wish their mom made them artichokes.
That is my vision. Not like Iron Chef food. Not something so over-the-top you don’t know what you are eating. But a little more complex food fixed with a lot of love.
MomSense
Some of the “sharing economy” is just giving a name to the way communities have functioned forever. I’ve spent most of my life in communities that are on the more rural end of the spectrum but often found myself trading child care for roto-tilling or some other service. I help some elderly neighbors with errands, yard work, snow shoveling, meals, etc and their lobsterman son brings me lobsters as a thank you. I would help my neighbors anyway because they are fantastic and love my children–but this is how rural communities organize themselves.
Older
I was interested to read that eBay has a “trust and safety” department.
I had some dealings with them briefly years ago, and ended up considering them neither trustworthy nor safe. Tried to buy something from a seller in another country. I couldn’t do Paypal because my account had been hacked and they guy said to just put the cash in an envelope and mail it to him. I declined to do this and offered a cashier’s check. He reported me to the management as having “not paid” when actually, I had sent the money and he had not sent the item. The upshot was that he had a good rating and I was banned. I’m probably unbanned by now, but I don’t trust them and their “system”.
I doubt I’d want to take a chance on any of these other trust-based arrangements either. It could so easily go the same way.
Violet
@Tommy: I had a dinner club for awhile. We did themes. People split up appetizers, main, desert, etc. and everyone brought something according to the theme. It was a lot of fun. You could put that out there as an idea too. You may find that people are more interested in food than you think. With the number of cooking shows on TV, there’s plenty of opportunity to hear about interesting dishes. Or, you could just announce that it’s Italian or French or whatever dinner and build your meal around that.
Betsy
@Tommy: a cool idea, though just please please say you will not ask actual friends to participate. If people ever start charging their friends for dinner parties, civilization will have definitely come to an end.
Betsy
@Tommy: that is known as a dinner party.. It’s something people used to do for their friends, for precisely all the excellent reasons you mention: for adult conversation, to serve friends great food, to get out of the house, to see friends.
but Please, for the love of God, don’t charge admission. It’s their company you’re after, not their money.
Mark
“In a few cases, it’s because the pricing structure of the sharing economy made their old jobs less profitable. (Like full-time taxi drivers who have switched to Lyft or Uber.)”
5000% disagree on this one. Taxi drivers are switching to Lyft and Uber because they make more money. All of the money in taxis goes to the medallion owners – cabbies have trouble breaking even.
MomSense
@currants:
I’m all over it!!