Tom Slee’s What’s Yours is Mine
I’ve been a Tom Slee fan for a few years, ever since I read his delightful and illuminating book Nobody Makes You Shop at Walmart, which explains game theory and other economic tools in plain English; in particular, why Walmart is nobody’s first choice but still succeeds in taking over towns, and why a plethora of “choices” can leave you with no good options at all.
Well, Slee has done it again, this time with a well-timed and comprehensive critique of the so-called “Sharing Economy” called What’s Yours Is Mine. He exposes the hyper-capitalism behind the feel-good marketing of Uber, AirBnB, Instagram, TaskRabbit, and other companies.
Slee is a data nerd, and as such he does quite a bit of number crunching, specifically on AirBnB. For example, he was the guy who, with Murray Cox, figured out AirBnB had purged 1,000 homes from their site right before a “data release.”
Cooking the books looks bad, but it’s not the norm. Slee works out various statistics for AirBnB and compares them to its marketing pitches; most aren’t fraudulent, but they’re consistently misleading. In other words, they shared only those stats that would make themselves look more “sharing-y”, when in fact they make the bulk of their money on fake hotel-like rentals, skirting regulations.
Similarly, Slee makes a strong case, which is not new to those of us who follow this stuff, that a large part of Uber’s value is represented by skirting responsibility for safety, for avoiding insurance issues, for avoiding having capacity for wheelchairs, and the like.
Slee goes into critical quality of life questions for Uber drivers and other “sharing economy” workers and puts the boasts of the companies to the test, which they often fail. So no, Uber drivers don’t typically make $90,000 per year in New York.
There are two parts of the book which are new for us critics of the sharing economy. First, the valuable section on reputation systems. What does it mean when all reviews are 4 or 5 stars? How could a 1-star review ever compensate for something really going bad? To what extent is the rating system a form of big-brother surveillance on drivers, and how can Uber claim it doesn’t control its drivers as employees when it fires those with “bad” ratings?
And most saliently, what kind of trust does the reputation system engender when both driver and rider knows how much power there is in the ratings? As Slee says at the end of this chapter:
We trust strangers on Sharing Economy platforms for the same reason we trust hotel employees and restaurant waiters: because they are in precarious jobs where customer complaints can lead to disciplinary action. The reputation system is a way to enforce “emotional labor”; service providers are compelled to manage their feelings and present the face that the platform demands, to become that “friend with a car” or that “neighbor helping neighbors.”
Slee goes into a “Short History of Openness” that I hope every programmer reads, about the ideals that so often give way to power and control of large companies, leaving a bunch of “hollowed out middle” in their wake – think Pirate Bay.
This segues him to a discussion of the commons, and in particular the digital technological management of the commons. Sharing economy companies can be seen as providers of such, replacing old-fashioned, informal management systems, while creating billion dollar companies along the way.
Which commons is he referring to? For AirBnB, he might be talking about the cultural commons of a Barcelona’s nightlife, when it’s grappling with an inundation of AirBnB tourists. For Uber, he might be talking about the streets themselves, or various taxi cab regulation systems that, for all their clumsiness, protect both riders and drivers in various ways.
In any case, as Slee describes in thoughtful detail, these companies are imposing news kinds of commerce on the commons. This is known in Silicon Valley as “disruption,” and it’s not always an improvement. Slee goes lists ways in which the commons are eroded by commerce in its various forms (I’d excerpt this entire section if I could).
Slee wrote this book because of a pattern of betrayal he has found represented by the sharing economy companies. In his words, “what started as an appeal to community, person-to-person connections, sustainability, and sharing has become the playground of billionaires, Wall Street, and the venture capitalists extending their free-market values even further into our personal lives.”
He’s made his case really well. The only question is, how long will it take for this message to be heard?
mathbabe 
In my experience, the message won’t be got until the hurt gets to be a lot and the damage has gone way past permanent.
The central theme here was an oft-discussed topic among the crew of the Wikipedia Review in its heyday. I don’t know if I can post more than one link, so here is simply the main gate to the old and largely defunked site, though still containing a wealth of useful information and critical analysis amidst the usual high-jinks and chatter.
☞ Wikipedia Review
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Is it just my imagination, or do the media seem to have an editorial policy of treating “sharing economy” as a non-controversial subject? I don’t get cable and I don’t click bait, so by “media” I mean “broadcast TV”, especially local. It almost seems as if Uber has replaced Apple as the company that can get any press release basically read on-air, no questions asked. News coverage of Uber seems to be all announcements of promotional offers, and never but never will there be any mention that the company has its detractors…
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Hi Cathy 🙂 I’m having trouble following your (and Slee’s) arguments about the sharing economy.. The points I can identify are: (1) sharing economy companies exaggerate/lie about their good qualities for marketing purposes, (2) rating systems aren’t really trust since both suppliers and consumers depend on them, and (3) sharing economy companies encroach on ‘commons’ like culture and roads.
I fail to see how these are unique to sharing economy companies. Most companies exaggerate things for marketing purposes. It doesn’t detract from the valuable services they provide, and good reporter policing often exposes them anyway.
I agree that the “trust” aspect of the sharing economy’s rating system is an exaggerated claim. It is trust in the same way you “trust” your waiter not to be rude, but then is this a critique against the service sector in general? The third is the most interesting argument, but I still don’t really see it as specific to the sharing economy. Your example that “he might be talking about the cultural commons of a Barcelona’s nightlife, when it’s grappling with an inundation of AirBnB tourists” seems to be more like a critique of tourism in general. Hotels also facilitate tourism.
Also, this quote from Slee: “what started as an appeal to community, person-to-person connections, sustainability, and sharing has become the playground of billionaires, Wall Street, and the venture capitalists extending their free-market values even further into our personal lives.”
The above is confusing… are hotels and cab companies NOT also a playground for billionaires and venture capitalists? How exactly are they “extending their free-market values even further into our personal lives”? Certainly no one is forced to use either Uber or Airbnb… hotels are still very much in business, and actually provide a somewhat different product, which certain people might prefer.
I agree that the claims of these companies that they are all about “connecting people” and “trust” etc. are just marketing. But all companies make exaggerated claims about their values that appeal to emotions. Hotels do it, too. It is possible to make exaggerated feel-good marketing claims while also providing a good service.
I suspect your real issue with the sharing economy stems from two things: the usual resentment of “middlemen” and the concern that these companies are “skirting regulations.” I have issues with those too, but that’s a different argument. Also, I think I’ve filled up your comment section enough. Sorry for the length 🙂 I haven’t actually read Slee’s book, but I certainly want to now 🙂 And I’m curious to hear more about your problem with the sharing economy.
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Read the book! I can’t do it justice in one blog post.
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I have a story.
Anne, Barbara, Carol, and Debbie are friends who agree to share their carpentry tools in order to save the money they’d otherwise spend on duplicate tools. But then if the tools break or get excessive wear because one of them has a big project, they find it’s hard to divide up the costs of replacement and maintenance. If someone breaks a tool, then Anne, Barbara, Carol, and Debbie argue among themselves over who needs to pay for maintenance. (I remember the time I broke my roommate’s fancy toaster and replaced it with a cheaper model. He was angry!)
Then they find a company with nifty software for keeping track of who has which tools. This company advertises that it making the world better through sharing. It takes a cut of the cost that someone would have paid for the tool every time someone shares it. The four women sign up.
Now instead of having a useful argument among themselves about who pays, the four women realize that some of the money that should be used for tool maintenance is instead being paid to the company. The software doesn’t keep track of maintenance costs and breakage. What’s needed is a maintenance fund that the women pay into, with surcharges for big projects. But that would be hard to set up. It isn’t part of the company’s system because it wouldn’t get a cut of the maintenance or replacement costs. There are no standards for what counts as good working order because that’s too troublesome and too confusing for the company, especially since the software is used for sharing everything, not just tools. The company says, “You are empowered to make your own judgments of quality.”
Now Anne, Barbara, Carol, and Debbie no longer talk to each other about tool maintenance, because they are transacting their sharing via the company software. The tools are in worse shape than ever. But the company’s membership and profit keep growing because it is simpler and faster than the old ways of sharing, which required painful arguments over who pays for broken tools.
It’s possible that the transaction costs were too high to permit sharing in the first place, and the company is providing an efficient service by helping people organize themselves. But if the company is like AirBnB or Uber, there are lots of costs that it isn’t keeping track of, which then means these costs get pushed onto someone else.
Plus, by taking the agreement away from the public sphere of licensing and standards for safety and insurance, these problems become more difficult to resolve, because, in effect, no one is responsible and the problems are invisible.
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Um, why is there even a “company” in this story? Is the company an absolutely essential character in this story, without whom this story can’t be told?
I ask because as far as I can recall the term “sharing economy” was coined in the early 2000’s by open source community types writing in noncommercial websites of the “brainstorming” type. Commercial implementation is not generally what they had in mind. Is there some ironclad law of human nature that actual implementation of ideas requires ontapanureship, which in turn requires monetization, which in turn requires investor financing, etc. etc.? Or is that only true under certain conditions, which unfortunately include the status quo?
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More specifically, in communities such as Transitioner circa 2004 or so, the specific term for the specific use case described above was “tool library.”
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The regulatory issues you focus on in your blog (and presumably in the book) also reveal another tension that the ‘sharing’ economy exposes. We have regulations for all sorts of reasons, and I suspect that there is merit to the argument that at least in some markets the regulations are designed to help protect a monopoly.
Beyond that, though, using Uber as an example, many of the regulations on taxis also provide additional benefits to consumers. Insurance/liability is one that impacts all consumers, and I suspect there will be a new regulatory norm over time to address this.
Accessibility, though, is something that only matters to a subset of consumers (and a minority at that). Regulations in this area have been hard won, but people who haven’t personally benefited from them or had a close friend/family member benefit from them are probably oblivious to the need from them…and may even see them as an unnecessary nuisance. By circumventing these regulations (and continuing to demonstrate that they can maintain a large user base), Uber is essentially opening back up the question of minority vs. majority rights. It’s interesting, since there seems to be such a strong undercurrent of this in the Presidential campaign as well. It’s very difficult to see how this will play out, but it’s very interesting to observe. And a pretty convincing argument can be made that our increasing reliance on “data” and “evidence-based” decision-making will have the same effect.
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I don’t completely agree. After all, insurance is needed by everyone but only used by a minority – it’s just that we don’t know who the minority will be. It takes a while for a lack of an insurance policy, or rather the risks exposed when one isn’t insured, to become well known. But it isn’t an issue that will necessarily surface faster than accessibility issues. That’s just a guess.
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