Demystifying the Sharing Economy

Part 1: Remembering the Co-operative Counter Narrative

Isobel M. Findlay

In the context of the economic, financial, and environmental crises that continue to shake belief in mainstream institutions (trust is at record lows, even in Canada), many look to the sharing economy as a real game changer. They promote it as a revolutionary disrupter, empowering people to leverage underused assets and reduce environmental impacts, liberating them from the excesses of ownership and regulation behind the crises, and even helping to renew community bonds. According to enthusiasts and opportunists alike, sharing is now all about accessing underused and unused capacity in the interests of efficiency, convenience, and choice. However, as an allegedly new market signifier in a hyperconnected communicative economy, the sharing economy forgets or ignores the history of sharing, especially in co-operative and Indigenous settings, so as to better hype cybermutualism as accelerated convenience and enhanced consumer choice.

Credit: Michela Buttingnol

The “dark side” (Malhotra and Van Alstyne 2014) of the sharing economy is gaining increasing prominence in a growing literature exposing legal, regulatory, political, and other battles, precariousness, and the “sharewashing” (Kalamar 2013) — akin to marketing’s “greenwashing” — of platforms such as AirBnB and Uber that avoid taxes and regulation, and even risk breaking the law (Baker 2014; Kaine, Logue, and Josserand 2016; Scholz 2014, 2016). There are those who challenge its presumption to assimilate the symbolic power of sharing, insisting that the sharing economy is little more than “an access economy” (Eckhardt and Bardhi 2015). Far from subverting market logic, the sharing economy by some accounts is neofeudal, even worse than capitalism, extracting undue profits for a few from the unpaid or underpaid labour or resources of many (Wark 2017). Uber and AirBnB, for instance, are among the most valuable private enterprises, worth respectively $62.5 billion and $24 billion (CB Insights 2017). Their much-hyped novelty and trendiness obscure their failure to distinguish themselves, for example, from the poor diversity record of the technology sector. Consider Uber’s 2017 diversity report, former employee reports of a competitive culture where harassment went undisciplined, and high-profile ousters of senior executives (Somerville 2017).

The excesses of the sharing economy, in fact, have fuelled renewed interest in co-operatives as a principled way of doing business that promotes education and community welfare, supporting efforts to humanize or resocialize the economy and redefine what ownership can mean. For the Rochdale Pioneers in the 1840s, shared ownership and decision making were key responses to the disastrous socio-economic consequences of industrialization. They remain the source of the co-op advantage — the foundation of success and sustainability, of productivity, innovation, and entrepreneurship.

A number of international initiatives have added to the momentum towards co-operative renewal, expanding awareness and understanding of the co-operative record on poverty reduction, employment, and social inclusion as well as the model’s resilience rooted in co-operative values:

  • the 2012 United Nations International Year of Co-operatives
  • the International Labour Organization’s long-term promotion of co-operatives as a means of fulfilling its mandate to achieve social justice and full (and decent) employment
  • the United Nations Educational, Scientific and Cultural Organization’s (2016) addition of co-operation to the list of Intangible Cultural Heritage

International Years designed to highlight global issues and promote action can be especially important for alternative socio-economic models rendered largely invisible in mainstream thinking in mass media, business school curricula, and economics texts, for instance. In opening the official website of the International Year of Co-operatives, then United Nations Secretary-General Ban Ki-moon underlined lessons to be learned from the co-operative counter narrative: “Co-operatives are a reminder to the international community that it is possible to pursue both economic viability and social responsibility.”

For a summary comparison of the sharing economy and co-operatives, see Table 1.

 Table 1: Comparing the “Sharing Economy” and Co-operatives

“Sharing Economy” Co-operatives
Exclusive, discriminatory, short-term, extractive economies Inclusive, democratic, long-term, generative economies
Entrenching market logic Working within/against market logic
Concentrated ownership and decision making Distributed ownership and governance
Undue risks and unequal rewards Shared risks, responsibilities, rewards
Inequality just the cost of doing business Values of “democracy, equality, equity and solidarity” (ICA 2017)
Resisting, subverting regulation Operating in/respecting a dense regulatory field
Pitting the economy against the environment Concern for community
“Uberization” of work (Kaine, Logue, and Josserand 2016) Fair trade, living wages, decent work weaving “ethical threads into the fabric of 21st C work” (Scholz 2014)

In actively obscuring or forgetting co-operative sharing, the so-called sharing economy cuts itself off from knowledge, principles, and practice so critical to the authentic sharing of risk and reward in sustainable economies and communities. Far from being new, it continues economic modernity’s wasteful ways so well documented by Bauman (2004). Forgetting the destructive impacts of discriminatory, short-term economies that maximize profits for the few while resisting or subverting regulation to protect worker and consumer health and safety, it renders increasingly precarious the livelihoods of so many.

In sum, capitalism, albeit in a new key, sings much the same old self-maximizing song that has compounded and intensified crises rather than nourishing creative, sustainable intersectionality and good mutualism. Co-operatives collaborating with other social movements, particularly the Indigenous movement in the wake of the Truth and Reconciliation Commission of Canada’s (TRC) 94 Calls to Action, meanwhile, are helping define an alternative sharing economy with a much longer history of resisting commodifying, concentrating, and corporatizing pressures, while promoting economic, environmental, and cultural democracy. Part Two will elaborate this part of the co-operative story.

Isobel Findlay is Fellow in Co-operatives, Diversity, and Sustainable Development at the Centre for the Study of Co-operatives

 References

Bauman, Zygmunt. 2004. Wasted Lives: Modernity and Its Outcasts. Cambridge, UK: Polity Press.

International Co-operative Alliance (ICA). 2017. Co-operative Identity, Values, and Principles. Accessed https://ica.coop/en/whats-co-op/co-operative-identity-values-principles

Malhotra, Arvind, and Marshall Van Alstyne. (2014). “The Dark Side of the Sharing Economy … And How to Lighten It.” Communications of the ACM 57 (11): 24-27. doi: 0.1145/2668893.

Somerville, Heather. “Uber Diversity Report Reveals Shortage of Women, Minorities,” Report on Business, March 29, 2017, B2.

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Note: This blog draws on a forthcoming book chapter: Findlay, Isobel M. 2017. “Precursors to the Sharing Economy: Co-operatives.” In The Rise of the Sharing Economy: Exploring the Challenges and Opportunities of Collaborative Consumption, edited by Pia Albinsson and Yasanthi Perera. 9–28. CA: Praeger (ABC-CLIO).

One thought on “Demystifying the Sharing Economy

  1. Thank you so much for your insights.I love the table of comparison between sharing economy and cooperatives.As a prospective cooperative student of Saskatoon University, I found your blog very interesting.
    Through Canvas I am taking the modules Governance and Cooperatives..I am from Sub-Saharan Africa,precisely Senegal,and the implementation of the culture of Cooperatives is more beneficial than the loans from the World Bank and International Monetary Fund.

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