Original to:
https://www.theguardian.com/commentisfree/2018/nov/27/airbnb-city-bikes-sharing-economy-big-money
From Airbnb to city bikes, the ‘sharing economy’ has been seized by big
money
To flourish, the informal digital networks providing new services needed
to be protected from the market
-Evgeny Morozov,
The Guardian, Tue 27 Nov 2018
Of all the ideologies spawned by Silicon Valley, that of techno-populism
– the making of empty promises on the basis of seismic digital
disruption – is the strangest. Promising a world of immediate and
painless personal empowerment, techno-populism is ambiguous enough to
unite big tech firms, startups, cryptocurrency aficionados and even some
political parties.
The history is murky, but we do know the date when it went mainstream.
It can be traced to Time magazine’s selection, in 2006, of “You” – the
millions of ordinary people behind the user-generated web of the 2000s –
as its Person of the Year. That choice ingrained techno-populist themes
deep into our collective unconscious.
While actual contributors to sites such as Wikipedia or Flickr were
relatively few, the celebration of them delayed and deflected questions
about corporate power and the durability of the emerging digital utopia.
Just a few years later, that utopia was no more: highly centralised and
dominated by a handful of platforms, the web was a shadow of its former
eccentric self.
When Uber and Airbnb were young, it was easy to believe a global
revolution would liberate informal economic activity
In 2018, the omnipotent creative user of 2006 has become a zombie-like
content junkie, lethally addicted to scrolling and liking, forever
trapped in the invisible cages of data brokers. A noble effort to make
everyone an honorary member of the Bloomsbury group has instead
condemned all of us to the eternal rosters of Cambridge Analytica.
So the myth of the user-as-an-artist is gone. But today the spirit of
techno-populism thrives on two subsequent equally potent myths: those of
the user-as-entrepreneur and the user-as-consumer. They promise a lot –
more decentralisation, efficiency, informality – while concealing the
actual dynamics of the digital economy. As a result, the digital future
that does await us – one of centralisation, inefficiency and control –
is harder to discern.
When Uber, Airbnb and similar platforms were young and tiny, it was easy
to believe that a global revolution would liberate more informal
economic activity. Out with professional drivers, limousines and hotels;
in with amateurs, bicycles and shared couches!
It was an appealing vision, rooted in the countercultural rebellion
against authority, hierarchy and expertise. That vision, however, lacked
one thing: backing from political parties or social movements. Those
parties, once in power, could have ensured that local platforms had
adequate public funding not to be subject to the brutal laws of
competition, protecting them from deep-pocketed commercial competitors.
A similar effort in the previous century, a political project par
excellence, gave us the welfare state. Instead of opening the provision
of education or healthcare services to private providers, we
deliberately sealed those domains from the pressures of the market.
The welfare state that emerged had some hierarchical excesses, but it
was a reasonable compromise, given the political and technological
limitations of that era. Today, one can imagine a more horizontal
provision of such services, more respectful of local autonomy,
democratic decision-making and individual idiosyncrasies. The same goes
for the economy as a whole.
Digital platforms, as intermediaries of interaction between citizens and
firms, and also citizens and institutions, should be of great importance
to this transformation. However, no similar political project – aimed at
keeping the newly democratised state and economy decommodified –
emerged. As a result, the laudable aims of empowerment, localism and
horizontalism were to be achieved by cosying up to a mighty but
treacherous ally – by synchronising the heartbeat and needs of digital
platforms with those of global capital.
It worked nicely, at least in the beginning. Car-sharing, bike-sharing
and flat-sharing all exploded, thanks to huge injections of capital,
much of it from sovereign wealth funds and venture capitalists. How nice
it was of Saudi Arabia to pour its oil revenues – through deals with
Japan’s SoftBank – into subsidising ride-sharing and food delivery all
over the world.
Those offering services or goods on digital platforms, as well as those
buying or renting them, had reasons for jubilation. The former got a way
to monetise their idle resources, from vacant apartments to free time.
The latter got discounts on rides, meals and bookings. Many struggling
municipalities could now count on digital platforms to extend or replace
crumbling infrastructure and facilitate tourism.
This fairytale has come to an end. The year 2018 is to the sharing
economy what 2006 was to user-generated content: it can only go
downhill. Platforms won’t disappear; far from it. However, the initial
lofty objectives that legitimised their activities will give way to the
prosaic and occasionally violent imperative imposed by the iron law of
competition: the quest for profitability.
Uber may help some make ends meet through occasional driving gigs. The
need to achieve profitability, however, means that it will have no
qualms about ditching its drivers for fully automated vehicles; a
company that lost $4.5 bn in 2017 alone would be silly to do otherwise.
Airbnb may have presented itself as an ally of the middle classes
against entrenched economic interests. But the drive for profits already
forces it to partner with the likes of Brookfield Property Partners, one
of the world’s largest real-estate firms, to develop Airbnb-branded
hotel-like residencies, often by purchasing and converting existing
apartment blocks. Few entrenched interests – save, perhaps, for the
tenants who see their apartment blocks become Airbnb-run hotels – get
disrupted here.
Given the huge sums involved, the most likely outcome of current battles
in sectors such as ride-sharing will be more centralisation, with just
one or two platforms controlling each region. Uber’s surrender – in
China, India and Russia, as well as much of southeast Asia and Latin
America – to local players, many of them also backed by Saudi money,
suggests as much.
And the old and hierarchical industries will not stay idle for ever, as
the experience of the previous digital revolution teaches us. Just look
at the recent acquisition of Spin – a promising electronic scooter
startup – by Ford.
Such developments contradict the techno-populist rhetoric. They also
generate a lot of waste, with piles of abandoned bikes proliferating
across the globe. Increased traffic on clogged streets – the consequence
of letting global capital conquer ride-sharing instead of developing far
more efficient public transportation – is already here.
Mountains of waste generated by delivery startups is hardly the
sustainable future advertised by techno-populists. The heavily
subsidised fares and meal prices – the temporary consequence of intense
competition – will not last; heavy losses will need to be recouped by
the few winning firms – most likely, via higher prices.
Today’s myth of the omnipotent consumer-entrepreneur is dead.
Techno-populism, however, will survive, making sweeping promises about
the blockchain, artificial intelligence or the smart city.
Many of these promises will look appealing. But without a robust
political agenda – an agenda that harbours no illusions about the
ability of global capital to promote social emancipation – they will
produce the opposite effects. We can’t buy our way to a more democratic
society – and certainly not with Saudi money.
• Evgeny Morozov is the author of To Save Everything, Click Here
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