From Airbnb to city bikes, the ‘sharing economy’ has been
seized by big money
Evgeny Morozov
To flourish, the informal digital networks providing new
services needed to be protected from the market
“When Uber, Airbnb and similar platforms were young and
tiny, it was easy to believe that a global revolution would liberate more
informal economic activity. Out with professional drivers, limousines and
hotels; in with amateurs, bicycles and shared couches!”
Tue 27 Nov 2018 06.00 GMT Last modified on Tue 27 Nov 2018
07.04 GMT
‘The year 2018 is to the sharing economy what 2006 was to
user-generated content: it can only go downhill.’ Illustration: Mark Long
Of all the ideologies spawned by Silicon Valley, that of
techno-populism – the making of empty promises on the basis of seismic digital
disruption – is the strangest. Promising a world of immediate and painless
personal empowerment, techno-populism is ambiguous enough to unite big tech
firms, startups, cryptocurrency aficionados and even some political parties.
The history is murky, but we do know the date when it went
mainstream. It can be traced to Time magazine’s selection, in 2006, of “You” –
the millions of ordinary people behind the user-generated web of the 2000s – as
its Person of the Year. That choice ingrained techno-populist themes deep into
our collective unconscious.
While actual contributors to sites such as Wikipedia or
Flickr were relatively few, the celebration of them delayed and deflected
questions about corporate power and the durability of the emerging digital
utopia. Just a few years later, that utopia was no more: highly centralised and
dominated by a handful of platforms, the web was a shadow of its former
eccentric self.
When Uber and Airbnb
were young, it was easy to believe a global revolution would liberate informal
economic activity
In 2018, the omnipotent creative user of 2006 has become a
zombie-like content junkie, lethally addicted to scrolling and liking, forever
trapped in the invisible cages of data brokers. A noble effort to make everyone
an honorary member of the Bloomsbury group has instead condemned all of us to
the eternal rosters of Cambridge Analytica.
So the myth of the user-as-an-artist is gone. But today the
spirit of techno-populism thrives on two subsequent equally potent myths: those
of the user-as-entrepreneur and the user-as-consumer. They promise a lot – more
decentralisation, efficiency, informality – while concealing the actual
dynamics of the digital economy. As a result, the digital future that does
await us – one of centralisation, inefficiency and control – is harder to
discern.
When Uber, Airbnb and similar platforms were young and tiny,
it was easy to believe that a global revolution would liberate more informal
economic activity. Out with professional drivers, limousines and hotels; in
with amateurs, bicycles and shared couches!
It was an appealing vision, rooted in the countercultural
rebellion against authority, hierarchy and expertise. That vision, however,
lacked one thing: backing from political parties or social movements. Those
parties, once in power, could have ensured that local platforms had adequate
public funding not to be subject to the brutal laws of competition, protecting
them from deep-pocketed commercial competitors.
A similar effort in the previous century, a political
project par excellence, gave us the welfare state. Instead of opening the
provision of education or healthcare services to private providers, we
deliberately sealed those domains from the pressures of the market.
The welfare state that emerged had some hierarchical
excesses, but it was a reasonable compromise, given the political and
technological limitations of that era. Today, one can imagine a more horizontal
provision of such services, more respectful of local autonomy, democratic
decision-making and individual idiosyncrasies. The same goes for the economy as
a whole.
New Mexico Attorney General Hector Balderas says the state will receive
approximately $760,000 under a $148 million nationwide settlement between 50
states and Uber. The settlement announced Wednesday, Sept. 26, 2018, by
Illinois Attorney General Lisa Madigan stems from the ride-hailing company’s
yearlong delay in reporting a data breach to its affected drivers about the
theft of their personal information. The states sued Uber, saying the company
violated laws requiring it to promptly notify people affected by the breach.
(AP Photo/Seth Wenig, File)
‘The need to achieve
profitability means Uber will have no qualms about ditching its drivers for
fully automated vehicles.’ Photograph: Seth Wenig/AP
Digital platforms, as intermediaries of interaction between
citizens and firms, and also citizens and institutions, should be of great
importance to this transformation. However, no similar political project –
aimed at keeping the newly democratised state and economy decommodified –
emerged. As a result, the laudable aims of empowerment, localism and
horizontalism were to be achieved by cosying up to a mighty but treacherous
ally – by synchronising the heartbeat and needs of digital platforms with those
of global capital.
It worked nicely, at least in the beginning. Car-sharing,
bike-sharing and flat-sharing all exploded, thanks to huge injections of
capital, much of it from sovereign wealth funds and venture capitalists. How
nice it was of Saudi Arabia to pour its oil revenues – through deals with
Japan’s SoftBank – into subsidising ride-sharing and food delivery all over the
world.
Those offering services or goods on digital platforms, as
well as those buying or renting them, had reasons for jubilation. The former
got a way to monetise their idle resources, from vacant apartments to free
time. The latter got discounts on rides, meals and bookings. Many struggling
municipalities could now count on digital platforms to extend or replace
crumbling infrastructure and facilitate tourism.
This fairytale has come to an end. The year 2018 is to the
sharing economy what 2006 was to user-generated content: it can only go
downhill. Platforms won’t disappear; far from it. However, the initial lofty
objectives that legitimised their activities will give way to the prosaic and
occasionally violent imperative imposed by the iron law of competition: the
quest for profitability.
Uber may help some make ends meet through occasional driving
gigs. The need to achieve profitability, however, means that it will have no
qualms about ditching its drivers for fully automated vehicles; a company that
lost $4.5 bn in 2017 alone would be silly to do otherwise.
Airbnb may have presented itself as an ally of the middle
classes against entrenched economic interests. But the drive for profits
already forces it to partner with the likes of Brookfield Property Partners,
one of the world’s largest real-estate firms, to develop Airbnb-branded
hotel-like residencies, often by purchasing and converting existing apartment
blocks. Few entrenched interests – save, perhaps, for the tenants who see their
apartment blocks become Airbnb-run hotels – get disrupted here.
Given the huge sums involved, the most likely outcome of
current battles in sectors such as ride-sharing will be more centralisation,
with just one or two platforms controlling each region. Uber’s surrender – in
China, India and Russia, as well as much of southeast Asia and Latin America –
to local players, many of them also backed by Saudi money, suggests as much.
And the old and hierarchical industries will not stay idle
for ever, as the experience of the previous digital revolution teaches us. Just
look at the recent acquisition of Spin – a promising electronic scooter startup
– by Ford.
Such developments contradict the techno-populist rhetoric.
They also generate a lot of waste, with piles of abandoned bikes proliferating
across the globe. Increased traffic on clogged streets – the consequence of
letting global capital conquer ride-sharing instead of developing far more efficient
public transportation – is already here.
Mountains of waste generated by delivery startups is hardly
the sustainable future advertised by techno-populists. The heavily subsidised
fares and meal prices – the temporary consequence of intense competition – will
not last; heavy losses will need to be recouped by the few winning firms – most
likely, via higher prices.
Today’s myth of the omnipotent consumer-entrepreneur is
dead. Techno-populism, however, will survive, making sweeping promises about the
blockchain, artificial intelligence or the smart city.
Many of these promises will look appealing. But without a
robust political agenda – an agenda that harbours no illusions about the
ability of global capital to promote social emancipation – they will produce
the opposite effects. We can’t buy our way to a more democratic society – and
certainly not with Saudi money.
• Evgeny Morozov is the author of To Save Everything, Click
Here
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