Who will benefit from the sharing economy?
Is the Sharing Economy a rebalancing of life goals for a more equitable society and more enriched lives for the majority or is it the gateway to an even more polarised economy with higher proportions of poor, more State-dependant people and an even more rarefied, rich, resilient elite?
As part of keeping in touch with business and societal trends we have investigated the Sharing Economy, including talking with some of its leading public advocates.
The trend is part of the shift in aspirations from asset accumulation to experience accumulation by Millennials. The effects of this trend are seen across a wide range of businesses from tourism to share of wallet for entertainment to employee assistance programmes, tech spend and housing. As consumers shift from Ownership to Access, will this raise their standard of living and improve their lives?
In the immediate term, the Sharing Economy is a means for a generation to afford frequent, once exotic holidays, shunning the slave-wage treadmill, long office hours and the opportunity for improved quality of life and enriched daily living. Many Millennials will say they cannot afford to acquire property but implicit in this is the shift in values and the trade-offs they have chosen between lifestyle, savings and ownership. But what will the effect be in the long term? What trade-offs will be made explicitly or implicitly by a Sharing Economy generation?
There are aspects of the Sharing Economy that enable those who have assets to earn income from them by sharing them. Tesla advocates and supports Tesla owners to supplement their own income by 'sharing' their cars. With the installation of smart meters, we should be able to sell excess power back to the grid. Unfortunately, such examples, at least currently, are outnumbered and outweighed by the likes of Uber and AirBnB, where the lion's share goes to the digital platform, not the individual.
Many-to-one models scale in the digital environment yet they mainly tend to be designed to accumulate wealth rather than to share it. In many cases, the sharing economy essentially allows digital platforms to make money out of other people's assets. Those making up the backbone of the Sharing Economy, the gig workers, will revisit the effects of disaggregated labour from the previous century - lack of bargaining power and reduced face-to-face interactions. We envisage that digital links will only be able to compensate for a part of this loss.
As they age, they will end up experience rich but asset poor. This in turn will see them less resilient in the face of personal loss or economic downturns. Their only recourse, 'safety net' if you like, in these circumstances will be some mix of the emotional strength they may have gained from the extra life experiences they have accumulated, their support of (similarly asset poor) friends and relations and the State. (Remember, ironically, Millennials show the least faith in and highest rejection of institutions of all kinds.)
At the same time, those building the business architecture that would support and sustain the Sharing Economy are, in fact, investing in building businesses, that is, they are working on creating real assets in the form of new companies and investing in them in the hopes of income streams and asset value growth. Where might this lead further down the line? Most likely, an even more polarised economy. Higher proportions of poor, more State-dependant people and an even more rarefied, rich, resilient elite. Contrary to the contemporary buzz, I don't think this is what many of us would call a progressive path for our society.
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