Who Shares Loses
A Self-Experiment in the Sharing Economy
In March 2013, the technology sector heralded the dawn of the era of the ‘shareconomy’ at the Cebit fair in Hanover with the words: ‘We are moving from a world of ownership into a world of sharing.’ According to the US economist Jeremy Rifkin, who is regarded as the father of the so-called ‘sharing economy’, this is a significant historical event that will go down in the history books. At the heart of his vision is a circular flow of goods where nothing is thrown away before its time: ‘We share our cars, our homes, our clothes, our tools. We share them with everyone over and over again.’ This ‘sharing’, which is supposed to benefit everyone, but above all the environment, is made possible by global networking via Internet and platforms such as wimdu, Airb’n’b, Huffington Post, borrowmydoggy.com, rent-a-rentner (literally: ‘rent-a-pensioner’), checkrobin, Car2go, ebay, Vinted, Facebook, 9flats, Spotify, Leihdirwas (literally: ‘borrow something’), and parkatmyhouse. Rifkin is currently very much in demand. On any given day, he is addressing a conference somewhere in the world. He has even advised Germany’s Chancellor Merkel. People love him and his ideas. But how does the sharing economy work in practice? And why is everybody getting involved?
Consumption constipationGermany’s economy is thriving and flourishing. Interest rates for borrowers have never been lower, and Germans can afford to buy more than ever before. But for all that, they are not happy. The world’s most affluent consumer societies in particular are recording disproportionately high levels of burnout, depression, and hyperactivity disorder. ‘What we are seeing is that modern societies are suffering from consumption constipation,’ explains Niko Paech, environmental economist at the University of Oldenburg in Germany. The reason for this, he says, is the huge dissatisfaction with the way things are, with the economic growth dictated by industry and trade. After all, people know that the world’s resources are slowly but surely being depleted. In the past, our options for rebelling against the ‘faster, higher, further’ mentality were limited to anti-consumerism and renunciation. With the sharing economy, however, the power is suddenly with the individual, who can decide how things develop. That, at least, is what the sharing economy promises.
To start my journey through the sharing economy, I decide to pay a visit to the food-sharing hotspot organised by the non-profit-making association NeuLand [NewLand] in Cologne. People come here to swap food, simply and unbureaucratically. In order to have something to swap, I take along a jar of marmalade, which I don’t like and which has been gathering dust in my store cupboard for quite some time. To complement it, another benefactor has donated some bread rolls from the previous day. The items on offer were posted on the Internet beforehand, and lo and behold, people have come and are pleased to find them here. An elderly man happily sinks his teeth into a bread roll with marmalade, and who has he to thank for it? Me! It’s a lovely feeling! One point to the sharing economy.
Spurred on by this initial success, on my way home I register with a number of platforms via smartphone: the borrowing platform leihdirwas.de, the free digital newspaper www.huffingtonpost.de, and the taxi service www.uber.com. As usual, I accept the general terms and conditions without actually reading them through, and agree to the use and processing of my data at the end of the data protection declaration. I’m not happy about it, but this is my ticket into the world of the Internet-based sharing economy. ‘Collective consumption also helps the environment. The question is: how many lawnmowers does a neighbourhood need? www.leihdirwas.de: your borrowing portal on the Internet.’ I myself don’t have anything to lend, but I spontaneously decide to rent a ‘Aracea Palm tree’ for €2 a day and a bicycle lock for €8 per week. Not all that cheap, and I have to make a 40-kilometre trip to Düsseldorf to pick them up. That and the fact that I have to agree to my data being used means minus three points for leihdirwas.de. But in this case it’s not a problem, as being in Düsseldorf gives me the perfect opportunity to try out the Uber taxi service.
A new way to travel by taxi
This app is undoubtedly the future that the traditional taxi sector didn’t see coming, and which it is now fighting with all its might. However, according to my lovely driver, Jost Reinert, there is much more to Uber than just a convenient app – and by that he doesn’t mean the bottles of still and sparkling water, or the chocolate bars tucked into the pockets of the doors on his slightly dented Opel Corsa, or the major investors like Goldman-Sachs and Google who are financing the whole Uber enterprise. He’s referring instead to the idea that private individuals can share their time and their cars with other private individuals. ‘Of course the shareholders have monetary interests; they’re part of the capitalist system. Nevertheless, within this capitalist system there is some freedom that we can make use of. And Uber can, in principle, be one of these areas of freedom,’ says Jost.
Jost Reinert, who was born in 1961, is a curator by profession and an anarchist at heart. He’s also an idealist. What matters to him is not whether the motives of the Uber company are good or bad, but what happens when people see that they can do business without adhering to the usual rules. People are now realising that they can do business with each other without entering into the usual employer-employee relationship in which the employer has to pay compulsory social insurance: one without a clearly defined customer-supplier relationship, without a ten-page contract, without wages in the conventional sense, and without having to pay tax on profits. What users pay to Uber is just a ‘flat service fee’; in other words, we are merely contributing to Jost’s expenses. The ‘suggested payment’, as it’s called on the German app, for my trip to Düsseldorf’s famous Königsallee (in other words, the total that Uber will soon be charging to my credit card) is just €9, although I’ve been in the car for almost half an hour. I don’t give Jost a tip; after all, we’re equals. Brilliant! ‘One thing is clear: hardly anyone does this to earn money,’ says Jost.
Well, why do they do it then? Because being an Uber driver is a little act of anarchy! So the debate about whether a state should ban Uber is not about the rights of established taxi drivers, nor is it about the lovely, easy-to-use app. What’s at stake here is much more fundamental than that. Those who work in the sharing economy and those (in this case, me) who avail themselves of the opportunities it offers are absenting themselves from the classical economy. What disappoints me a little is the fact that there’s no major outcry of the kind I would have expected would go hand in hand with such rebellious, revolutionary ideas. ‘
In other words, the state is largely leaving the sharing economy to its own devices. This means that everyone can get involved in the big share. And everyone is getting involved in some way: entrepreneurs are willing to take entrepreneurial risks in order to run the portals that facilitate sharing; journalists are writing free of charge for free Internet newspapers such as the Huffington Post; major investors and Internet giants are willing to fund the sharing; even established companies with long histories (in other words, the ones that have the power and the money to really make things happen) are willing to get involved. For example: Car2Go, drive-now, and multicity are just English names for car-sharing services operated by Daimler, BMW, and Citroen.
Profit through sharingIt is claimed that the sharing economy affords access to goods and services that would otherwise be unattainable to the user in this form. The promise is that those who share do not end up with less – as used to be the case – but, on the contrary, with more. That’s certainly true in my case. A sensationally cheap taxi ride used to be as far out of my reach as having my own cleaning lady, if only because the obstacles put in place by the complicated regulations that govern the hiring of cleaning staff in Germany seemed too onerous for me to navigate. Today, thanks to the sharing economy and cleaning portals like helpling.de, the situation is very different. I pay €12.90 an hour and get a cleaner, who is referred to as a ‘helpling’. The state gets nothing.
‘And that’s why a legal market can suddenly make sense – yet at a price that is acceptable to the customers,’ says Helpling boss Benedikt Franke when I visit him at the company’s Berlin headquarters. However, there is another reason for the attractive prices: the ‘Helpling system’. Contrary to what is suggested by the company’s advertising campaign, ‘helplings’ are not employed by the portal, nor are they individuals who are ‘sharing’. Formally speaking, they are self-employed. They decide which jobs to take on. However, they also assume the entrepreneurial risk, are liable for damages, have to take out their own insurance, pay taxes, and pay their own way if they get sick. Model helpling Verena Weinert is willing to be interviewed. When she set herself up in business as a home help in 2007, she found it unexpectedly difficult to find work on her own. ‘You have to apply for jobs, you have to win over customers, you have to advertise... and all of that costs money.’ For a year now, most of her work has come via Helpling.
This is what makes this kind of sharing economy so groundbreaking. If I hire a cleaner from a conventional cleaning company, I am the customer, the company is the supplier, and the cleaner is employed by the cleaning company. As far as Helpling is concerned, both the cleaner and I are clients. Moreover, there’s no reason why Verena shouldn’t clean my home today and I hers tomorrow. However, in order to do so, I would need a trading licence, health insurance, and a tax number. In other words, ‘Partner Caroline Michel’ and ‘Partner Verena Weinert’ are not so equal after all. The invoice doesn’t come from the self-employed cleaner ‘Partner Verena Weinert’ either; it comes from the portal ‘Partner Helpling’.
Nevertheless, ‘Partner Verena Weinert’ is satisfied. ‘Yes, I can make a living from it. But I don’t ask for much. I don’t have a car, I don’t have an expensive hobby, I don’t travel. I don’t give parties, I don’t go away, I don’t eat out.’ For all that, though, Verena is ‘free’. She can decide if and when and for whom she works. The same applies to all ‘suppliers’, all partner-managers, all micro-entrepreneurs I’ve met so far.
At this stage, I conclude that the customer benefits, the state loses out, and small suppliers like Jost and Verena benefit a little today, at least. Tomorrow, however, they will quite possibly be accused of being tax evaders, or will end up as hardship cases with no social security net to catch them when they fall. And what about the Internet portals? They’re playing their cards very close to their chests. Although the newspapers report that Uber is now worth $50 billion, and Helpling has put out a press release saying that the company is proud to have collected a total €56.5 million from various investors since it was founded in 2013, all of the portals set up to act as mediators for those who want to share services are saying nothing about their revenues and their actual profit – if they’re making any profit, that is. After all, there are rumours that many Internet portals in the sharing economy are not growing wealthy on the commissions they’re charging, but are, in fact, currently paying through the nose to create a supply that doesn’t actually exist. The theory is that major investors are involved and that they are intentionally destroying a market by injecting a lot of money into it. This is not the first time I’ve heard this rumour. It’s also said with regard to Uber. There has been talk of large sums of money that Uber is alleged to have paid its drivers to persuade them to drive at all. The question is, why would the portal do such a thing? One possible explanation is the valuable data generated by all this sharing and swapping. And as we all know, data is the currency of the Internet.
Accommodation portalsThe focus of this year’s ITB international tourist trade fair in Berlin was the sharing economy. Just like conventional taxi drivers, established hoteliers are worried. They – who have abided by all the state regulations on everything from fire protection to hygiene – are seen as stuffy and averse to innovation in the face of the sharing competition, above all from the shooting star in this sector, Airb’n’b, which has already put a temporary roof over the heads of 26 million guests in over one million places in over 190 countries. Airb’n’b is estimated to be worth $20 billion.
I too have booked myself into a private flat via Airb’n’b. I stay with Angelika, who for €28 per night ‘shares’ a lovely little room, in a four-room flat, with strangers. Having attended a few events at the ITB, it has become clear to me that it’s not the small, private accommodation renters like Angelika who are the bone of contention in this field. Instead, the controversy surrounds the people and companies who only rent flats in order to rent them out again by the room and by the day, so that they can pocket many times the rent they themselves are paying, or would get if they were to rent the property out ‘permanently’ to a single tenant. Allegedly, between 12,000 and 15,000 flats in Berlin alone are no longer on the market because of platforms like Airb’n’b, wimdu, or 9flats. This is why people are asking whether in the foreseeable future the whole city is just going to become one big hotel.
In my opinion, questions like these come much too late. After all, this market has long been in the hands of professional suppliers who know exactly what is permitted under German law and what isn’t. Here, too, the state earns no taxes from such rentals, which is not the case when people stay in hotels. What’s more, the cost of renting flats is rising. But who benefits? ‘Everyone,’ says Airb’n’b spokesman Julian Trautwein: because many of those who use Airb’n’b are travellers who would not have travelled were it not for these offers of accommodation. What’s more, he says, they tend to stay longer. In other words, says Trautwein, Airb’n’b is not a competitor, but a supplement to the accommodation already on offer: ‘We are making the cake a little bit bigger.’ By a million guests a month.
The addiction to having moreIt’s strange: once upon a time in our society, the ideal was to reduce our consumption and conserve our resources through charity and solidarity. Now, with the sharing economy, the cake on offer is getting bigger, not smaller. So we are now getting more, not less. Ultimately, the whole car-sharing exercise could lead to an increase in the number of trips being made because cars are now more easily available to a larger number of people. But if this is true, how were we talked into it?
According to trend researcher Peter Wippermann, we were targeted right where we’re most vulnerable to seduction. For most people, says Wippermann, it’s no longer about freedom, conservation of resources or co-ownership, but simply about making a profit. According to this theory, ‘“sharing” in the sharing economy is no longer an act of charity, but [...] about being able to use things as cheaply as possible’. So what are we supposed to do with the money we save with the help of the sharing economy, if not consume more? But does sharing really help us make savings in the long term? Or is everything simply going to get more expensive? If fewer vehicles are sold, the companies will have to put up prices in order to be able to remain economically successful, says economist Daniel Veit. While this would mean that fewer vehicles are produced and sold, and those vehicles that are produced would be used more effectively, it would also mean that the costs for the individual would not sink significantly as a result. Indeed, it is possible that a shared car in the future will cost just as much as having your own car parked outside your home and ready to use at any time. That said, resources would be conserved because fewer cars would be produced.
‘If things really do develop like this, which is not unlikely, then there is a real chance that we can achieve the same level of prosperity using fewer resources. And that, of course, is desirable.’ So: prices rise, work as we know it becomes rarer, wages fall. Environmental economist Niko Paech predicts that if this day dawns, sharing will be the new work – for everyone, even those who never wanted to share anything in the first place. In Paech’s ‘post-growth economy’, people no longer share for the pleasure of sharing, but because they have to, in a small, closed, self-sufficient community ‘without money, without markets, without fossil fuels, making the most of their own time, their own skills, and the social relationships needed for this’. Incidentally, there is no place for Airb’n’b or Uber in this vision because no one will be travelling any more. But thankfully we’re not at that stage yet. At the moment, the cake is getting bigger and the prices are falling.
A question of definitionAs children, we were always told it was better not to lend anybody anything that really mattered to us. When I think about it, with the exception of my money, the only thing I shared throughout the course of this experiment was an old jar of marmalade. What I got was an inexpensive taxi trip, really cheap overnight accommodation, and a clean flat. I also met a lot of lovely people. But is that really the basic idea behind the sharing economy? And is ‘sharing’ really the right word for what is happening in that economy? After all, the question of who is sharing what with whom is not always easy to answer.
There is a limit to the extent to which a taxi ride can be shared. The same applies to food. After all, you can only eat food once; you can’t use it jointly. This is why people who are sharing their food via organisations such as foodsharing.de are not actually sharing, says the economist Veit. They are giving things away that they no longer need. Other people sell things, for example on eBay. That’s not sharing, either. ‘Sharing for money’ – in other words, what we used to call renting – is only sharing (if it can legitimately be called that at all) when it happens between two private individuals. The only things that can really be shared properly are things that are co-owned, as propagated by the visionary Jeremy Rifkin in his passionate speeches. In Rifkin’s vision of the future, we will share everything, even our control over sharing. In other words, we will largely be ruled by the Internet, which will do the management for us. But this is not a bad thing per se, because the Internet belongs to us all and can, consequently, be controlled by everybody.
So far, so good. What is much more exciting is the question as to where all the co-owned property on which this utopia is based is supposed to come from? Is my private property the major resource that is not yet being fully exploited by the economy? My time, my labour, my flat, my car, my private life, my social security, my data? Should I voluntarily give it all away so that others can ‘use’ it? If so, then I would prefer to leave the ‘sharing’ to the ‘major players’, i.e. to the companies that are creating goods so that they can share them with me. That will mean the cake will get neither bigger nor smaller, it will just be divided up differently; that the state will lose both control and tax revenue, that people will lose their secure jobs, that old businesses will become the new rule, from which someone will benefit who certainly isn’t likely to share their profits; but at least I’ll be able to tell myself that there was once a time – albeit short-lived – when I too at last had to power to change something.
Translated by Aingeal Flanagan
Copyright: Goethe-Institut e. V., Fikrun wa Fann