Una Mullally: Turns out ‘sharing economy’ not that generous

The “sharing economy” has a nice ring to it. It works especially well in the ruthless tech “space” for companies who use fluffy language as a rhetorical device to dilute the fact that such mom-and-pop messaging doesn’t exactly match with billion-dollar corporations who have a tendency to circumvent everything from privacy laws to tax regimes.

Within this economy exists the flashy “disrupters” of our time, those pioneering businesses that are so over your fuddy duddy concerns such as employment law and paying a fair share of tax. Get with the times!

To be successful a product or a service needs to be accessibly priced and convenient. Cheap and easy. Time and time again, that’s what consumers will go for. In LA recently I was Ubering my life away, getting lifts left, right and centre for a few dollars a piece around a city that is almost impossible to navigate without a car. It was convenient and cheap, and it only crossed my mind a few times what kind of impact it must be having on the down and out taxi industry. I feel bad about that, but I also saved money, and so I have to admit to myself the selfishness consumerism instills.

Last week Uber lost a landmark case in the UK regarding employment rights. In order for companies such as Uber – essentially a casual taxi service where people book private cars on an app on their phone in real time using location software instead of hailing cabs – to succeed with maximum profit, the people working for the service need to remain self-employed contractors.

That way Uber doesn’t need to deal with things such as basic employment rights. Uber probably doesn’t want to have to engage with the archaic structures of minimum wage, paid holidays, pension contributions, sick pay and other benefits that protect workers and allow them to make the real meaning of “living”.

Customers

Uber has 40,000 drivers in the UK yet claims that it is a facilitator of drivers, as if all of these customers and drivers would magically meet up anyway and Uber just points them in a direction. Obviously these drivers work for Uber. If they weren’t working for Uber they wouldn’t be working for Uber.

Frank McDonald astutely pointed out a while ago that Dublin is now in a situation where people in need of housing are being accommodated in hotels, and tourists who used to stay in hotels are being hosted in our housing stock. There’s something wrong there.

The thing about “sharing economy” behemoth Airbnb is that it assumes the real estate being offered up is underused, or not wanted by others; the spare room in the family home, or the person out of town who wants to “monetise” their apartment while they are on holiday.

The problem with that is when Airbnb succeeds in places that are in the midst of housing crises, much-needed housing stock is sucked out of the market.

So individuals sign leases on two-bedroom apartments and Airbnb the spare room. Or people rent multiple apartments and sublet them via Airbnb.

Or landlords with property in locations that can secure high margins on holiday and short-term lets decide not to actually put their property into that pesky old rental market, and instead turn it into an Airbnb apartment or house.

More money for the landlord, more money for Airbnb, no gaff for you in a rental market already starved of supply.

In this sense “sharing” actually means profit-making companies acting as intermediaries between consumers. There is no “sharing”, there is a monetary exchange, a consumer interaction.

These “models” want to operate in economic utopias that simply don’t exist; hands off, do-what-you-want, let the market decide, mythical lands, the type of economics that never, ever trickles down.

The reality of urban living with its lack of housing and insecure contract work is far messier than a CEO having a fireside chat at the Web Summit would have you believe.

Extra dosh

For those who work for these companies – Airbnb hosts, Uber drivers, and so on – it isn’t the archetype the companies want to promote who succeeds the most. It isn’t the artist who Airbnbs a spare room for extra dosh so they can make their socially conscious murals their life passion, because within these models the normal rules of capitalism apply.

And so opportunistic people enter the fray with multiple properties, effectively acting like agencies within an agency, or landlords with multiple properties having their greed sated, or the owners of buildings or apartment blocks effectively running quasi-hotels.

There are 3,000 Airbnb hosts in Dublin, while there are less than 1,300 properties for rent in Dublin city the last time I checked daft.ie.

Do Uber and Airbnb offer good “value” for the consumer? Sure, but where there’s a yin there’s a yang. These companies are clearing massive profits on the back of those working “with” them, who are actually earning very little in context, or are merely supplementing their incomes in small ways, unless they’ve made it a profession, such as the now infamous Liveline caller and lecturer who claimed to be subletting 40 rooms on Airbnb.

There is no “sharing”, there is instead companies squeezing profit, capitalising on causal employment, contributing to housing crises, and trying to put a bow on it and present it as a gift.

Well, I don’t buy it.