The Resilience of Capitalism and the Demise of the Sharing Economy?

Many observers, especially Alvin Toffler and, more recently, Jeremy Rifkin, have seen the rise of the prosumer and of the sharing economy (or the “collaborative commons”) as harbingers of a hoped for amelioration of the excesses of capitalism, if not as an alternative to that economic system. However, it is difficult to ignore the power, resilience and adaptability of capitalism. Two recent examples demonstrate that it may be the alternatives to it, rather than capitalism itself, which are in jeopardy.

Peer-to-peer (p2p) lending sites such as Zopa are based on prosumers lending money to one another, perhaps switching time and again between being borrowers and lenders. However, as P2P lending has grown in importance, large financial institutions have become increasingly involved. Further, their participation is not always clear to those interested in borrowing money. This institutional involvement threatens to drive out individual investors interested in lending money thereby subverting the process of prosumption that lies at the base of all P2P systems. Of course, if they know of the participation of these institutions, prosumers retain the ability to reject their offerings and to borrow only from other prosumers.

More threatening, somewhat ironically, is the rise of prosumption sites and processes which pay those involved a substantial amount of money. Examples include those who drive cars for Uber (and similar enterprises), as well as those who shop and deliver (in their own cars) groceries for Instacart. This is no longer the prosumer-dominated “sharing economy”, but rather another way of making a profit and earning a living in a capitalist economy. Instacart charges $3.99 per delivery and earns extra money by marking up the prices of grocery items by, according to one estimate, 20%. At the moment, shoppers can earn between $15 and $30 an hour depending on how quickly they deliver the food (using their own cars). As is true of Uber, the pay is good, workers don’t need college degrees, and the hours are flexible. However, there is no job security and those who do this work do so without any of the benefits of employees of companies like Peapod. Furthermore, their relatively high pay is likely to decline as more people sign up to do the work.

Indicative of the increasing incursion of capitalist interests into the sharing economy is the investment of over $1 billion in Uber and the fact that it is now valued at $17 billion. In good capitalist fashion, Uber is positioning itself to expand in various directions (e.g., global package delivery).

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