Why is there no sharing in the "Sharing Economy”?

Posted in: Business and society, Research, Sharing Economy

Does sharing equal caring? Is the success of enterprises like Lyft and Couch Surfing down to social benefit, or simply convenience? In this piece, Russell W. Belk, Giana Eckhardt and Fleura Bardhi discuss what we really mean when we talk about the sharing economy. 


The so-called sharing economy seems at first to be all about sharing – sharing rides, cars, houses, and clothes through apps with names like Uber, Zipcar, and Airbnb.  But on closer examination, all of this activity is really about access rather than sharing.

This is something we have called the paradox of the sharing economy in our just-released Handbook of the Sharing Economy (Edward Elgar 2019).  What attracts people to offer their goods and services, or to want to access them, is typically related to money and convenience, rather than to social relationships or environmental concerns.

Consider the ride sharing app Lyft. Lyft started out at Cornell University as a ride sharing service called Zimride. It was an electronic version of the old bulletin board listing people planning a trip and soliciting others who needed a ride to the same location who could help with expenses. It was essentially a paid version of hitchhiking, but without the waiting for a ride somewhere out on the possibly dangerous, damp, and uncertain road. The new electronic version saved even going to the bulletin board across campus. This online version was a great success. It soon received venture funding, expanded, and spread to other university campuses. When Zimride changed to become Lyft in 2012, it began to offer enticing enough financial incentives for drivers to respond to rider destination requests rather than offer their own planned itineraries.

Still, there were some lingering signs of something that was more about social contact than money. Early Lyft riders sat in the front passenger seat with the driver, they began the trip with a fist-bump, the cars sported a big pink moustache, and there was a voluntary donation rather than a fixed fare. But eventually these social elements dropped away and Lyft became more like a pre-booked, GPS-aided taxi, hailed with a smartphone app. It is now only remotely similar to hitchhiking. We can see a similar history for Couch Surfing. It started out as a platform for adventurous travellers to stay on someone’s couch for free. But over time, it morphed into an Airbnb-like platform, where there are membership fees and a ratings system which evaluates the amenities on offer. For more about Lyft and Couch Surfing’s transitions, see Tom Slee’s 2015 book, What’s Yours is Mine (OR Books).

Without doubt, the sharing economy has brought convenience to consumers, economic benefits to those offering up their possessions and services, and a lingering element of sociality to both. Thanks to the one- to five-star mutual rating programs used by almost all sharing economy platforms, online reputation systems build an impersonal trust that makes them work. This is not the sort of trust that comes from knowing a neighbour who offers you a ride, but it is a way of learning who to trust in a world of strangers.  Thanks to these reputation systems and instant online prepayments, these short-term rental services and many others like TaskRabbit, Uber Eats, and Rent the Runway, make exchanges possible that would have been difficult or impossible previously.

But another factor that has aided the rapid growth of the giant platforms involved is that they avoid most liability, insurance, and benefits by claiming that the people actually providing the goods and services are independent contractors rather than employees. However, in London, Uber drivers are now classified as employees, and California has enacted a similar law. Stay tuned for updates on whether similar regulations ripple through the whole sharing economy. It won’t bring it back to the old sharing motivated by kindness rather than money, but it may just get Uber, Deliveroo, Airbnb and others to share more of their income with the contractor/employees who rely upon them for their livelihood.

In line with our conceptualization of the sharing economy as a paradox, in many platforms we see a curious blend of commerce and camaraderie. Online reputation systems create a mechanism for trusting strangers without knowing much or anything about them; it is impersonal trust – another paradox and oxymoron. In the process of providing access via sharing economy platforms, the result is often a gig economy that is only now being reconsidered. Nevertheless, it is often a much more social experience to stay in someone’s home than to stay in a hotel. The sharing economy is a mashup of sharing and economic commerce that paradoxically allows us to sometimes forget that money makes the world go round. For a deeper treatment of these complexities, we invite you to delve into the Handbook on the Sharing Economy.


You are invited to join the Center for Research in Sustainability (CRIS) at Royal Holloway University of London for a day of cutting edge discussions on the future of the sharing economy, as well as the official launch of the Handbook on the Sharing Economy. Please visit the Royal Holloway website for more information and to register.


Header image by Robert Anasch on Unsplash

Posted in: Business and society, Research, Sharing Economy


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