The “sharing economy” is a meaningless term that was only coined in the first place because of the tech industry’s desire to pretend everything it does is new and groundbreaking.
Now, almost a decade after it started seeing use, it’s worse than simply being meaningless: it’s actively obfuscatory, lumping together a hugely disparate bunch of companies, many of which push the definition to its limits, and the biggest examples of which have nothing to do with “sharing” at all.
The term grew out of the open-source community, where coders contribute to programs released to the world free-of-charge. The push for a similar model to be applied to the real world dates back to the early 2000s, but it took the financial crisis for it to grow from a niche idea to one taken seriously.
By the 2010s, the focus had narrowed from a nebulous attempt to bring the open source ethos out of the coding world to a more specific look at how to use technology to enable more efficient use of scarce resources. At the same time, the buzzwords had also stabilised, with a number of academic-sounding terms such as “commons-based peer production” (as coined by NYU law professor Yochai Benkler) to two main contenders: “the sharing economy”, and “collaborative consumption”.
The time was ripe for both ideas to take off. With unemployment in the west still high, and ideas of “post-growth capitalism” floating in the ether, groups that could articulate an alternative view of the world were popular. And the archetypal collaborative consumption models were seemingly win-win. A typical analogy for the sort of model people wanted to build was focused on household tools: if you own a drill, you likely don’t use it 364 days of the year; why not let others use it in the meantime?
In its purest sense, that is the sharing economy. But it very quickly ran into an issue: while some people act out of altruism, most don’t. My drill is mine. Why should I share it with you?
Some sites, such as Freecycle, still focus on acting out of the goodness of one’s heart, but the success stories of the sharing economy solved the problem by looking to the old economy. And so “sharing” became “renting”. Even today, one report finds 20 companies in the sharing economy whose offering can be summed up as “you can borrow stuff you don’t want to buy”. Nine of them have a name beginning with “rent”.
Once money started changing hands in earnest, business really started booming. In 2011, the same year Time magazine named the “sharing society” one of the Ten Ideas That Will Change The World, AirBnB raised $120m in VC funding. The company was mentioned in Time’s piece, which still emphasised the feel-good backdrop to the story: “There’s a green element here, of course: sharing and renting more stuff means producing and wasting less stuff, which is good for the planet and even better for one’s self-image.”
While renting out a spare room in a flat (or even renting out a flat) may be close enough to “sharing” to be hair-splitting, it’s a different case for hiring a driver to take you across a city. And yet Uber is one of the most famous examples of the sharing economy in the world – and certainly the highest capitalised, worth well north of $50bn.
The company’s defenders argue that it justifies that label because of the similarity to AirBnB: Uber drivers have an asset lying unused, which they want to monetise with the power of the internet. The difference, of course, is that an Uber driver’s labour is an integral part of the whole shebang. You aren’t renting their car: you’re renting their car and them.
If that’s still not clear-cut enough, consider TaskRabbit, the last member of the holy trinity of the Sharing Economy. The company allows customers to hire temporary labour to cook, clean, assemble furniture or queue for the latest iPhone. It’s a far cry from “collaborative consumption”.
Instead, the companies lumped together as examples of the sharing economy have come to be typified by something altogether different: a dependence on tenuous labour, particularly that provided by individuals working as third-party contractors rather than full employees.
For that reason, I’ve been using another term to describe these companies: “gig economy”. It’s not as well-known as “sharing economy”, which means it sounds weird to some ears (“do you mean Uber only hires musicians?”). But it emphasises the unifying aspect is short-term, tenuous “gigs” – often more than one juggled at the same time.
But there are other popular alternatives as well. In the US, “1099 economy” is often used, referring to the American tax code for independent contractors, while in the UK, similar emphasis is placed on “zero-hour contracts”: terms of employment which provide no fixed hours and don’t even guarantee work will be provided at all.
Are those terms better term than “gig economy”? Is there a better phrase still? Let me know in the comments below.