The Rise of the Sharing Economy - YouTube

I know we’re supposed to think that’s cool to drive an Uber from your Airbnb to

the assignment you found on TaskRabbit.

Isn’t the sharing economy really the ‘desperate economy?’

The ‘sharing economy,’ in a nutshell, is any platform that uses the internet to

connect dispersed networks of individuals.

That’s a platform like Uber, Lyft, Airbnb that allows individuals – that is, people

who are looking for a place to stay or a ride – to connect with people who have spare

bedrooms or a willingness to give people rides.

There’s a battle brewing on your next vacation.

On one side, big hotels – room prices skyrocketing.

The challenger?

Companies like Airbnb that offer short-term rentals typically at a fraction of the price

are booming.

The startup companies, like Postmates and Instacart, they aim to deliver anything from

seafood to shoes.

Her customers find her through TaskRabbit, an online service that matches customers with

taskers.

You have something like a triangular relationship, where you have an intermediary that is a platform

– an Uber or a Lyft or a TaskRabbit.

You have the worker and you have the customer, and it’s the job of the intermediary to

marry the worker to the customer.

You talk about the ‘sharing economy,’ and not everybody agrees that that’s the

best term for it.

The ‘sharing economy’ implies a sort of communalism that is not necessarily the case.

I’m not a big fan of the phrase ‘sharing economy,’ because it seems to imply, like,

a barter system.

The thing I think that’s missing from calling it the ‘sharing economy’ is it implies

that everybody is kind of sharing in the benefits of this new economy, and that’s not necessarily

true.

So the phrase that I’ve been using is the ‘online gig economy.’

‘Gig’ sort of captures from the worker’s perspective what’s happening in that part

of the economy.

I use the term ‘peer-to-peer economy,’ because the ‘peer-to-peer economy’ explains

that individuals are using networks and platforms to connect with each other.

What we are calling the ‘sharing economy’ today might be thought of as a kind of hyper-capitalism.

Economic historians prefer the name ‘experience economy.’

The ‘experience economy,’ the ‘sharing economy,’ the ‘collaborative consumptive

economy’ – whatever you want to call it – it’s here to stay.

There’s no doubt the sharing economy is disrupting traditional businesses.

The impact on hotel room revenue could actually be anywhere between 8% to 10%.

The taxi strike created traffic jams, and expressways were shut down by burning tires.

At the heart of the dispute is Uber.

Taxi drivers say it’s putting them out of business.

You have to have a certain amount of that creative destruction in order to get the next

great innovative technology that moves us forward, and the sharing economy is doing

that right now.

It’s just doing it faster than any other technology or sector that we’ve ever known

before.

Travel agents really don’t exist.

Kayak, Travelocity…

We’ve basically disrupted an entire industry with an algorithm.

Resources that have long been thought of as personal resources – a personal car, somebody’s

home or apartment – those resources are now being added into the economy.

They bring private parties together without anybody really setting those prices in most

of these markets.

It’s just the price that will bring together a willing buyer and a willing seller.

And what we have is people competing with each other to drive those transaction costs

down across the economic spectrum and deliver higher quality goods and services to more

people at cheaper prices.

The whole sharing economy isn’t just Uber, Lyft, and Airbnb – that’s what’s on

everybody’s lips – but there are a lot of other smaller players, many of whom we

haven’t heard of in the general public yet or that are coming about right now, that are

really exciting.

Entrepreneurial agility: changing to a changing environment.

That’s going to be the currency of the 21st century as you continue to move on, when disruption

is going to be bubbling up all around you.

Not everybody is going to be the next Uber or Airbnb, but it’s the fact that we had

that sort of vibrant, dynamic sort of marketplace, creative destruction and then new economy

birth, that’s so exciting about the sharing economy.

Uber says it’s just a technology company, putting passengers and drivers together.

The company says its drivers are independent contractors.

87% of Uber drivers say they work for Uber to “be my own boss and set my own schedule.”

For the most part, I have the control.

They are really just a tool that I’m using to kind of process these transactions.

The whole peer-to-peer thing is amazing, and the fact that I have a choice in when I want

to work and who I want to pick up is huge for me.

I think that actually creates better work quality and more pride in work, because you

as an individual involved in this economy are responsible for your own outcomes.

If you love to do what you do, you’re going to be more productive, you're going to be

more… you’re going to be a better employee, you’re going to be more creative.

As a society, we need to make some larger decisions about whether or not we want to

make sure that people are protected and that jobs are secure, which means not changing

very much or not changing quickly, or to allow rapid change to unfold in the hope and aspiration

that we’ll end up with a better society, but accepting that that process can be stressful,

if not harmful, to certain people along the way.

You don’t get all the benefits, for instance, that you would get if you were working at

a retail store full time, such as medical benefits and retirement plan and things like

that.

Particularly if you’re a worker who has fewer skills than others do in our economy,

you're competing with a gigantic mass of people who are equally lesser skilled, and that has

the effect of driving down wages.

The ridesharing app has been in conflict with existing taxi fleets and regulators around

the world.

These low-cost, unregulated competitors will hasten the race to the bottom.

Whether Airbnb is breaking the law or just breaking the mold, the competitions means,

for now, consumers are winning.

The really amazing thing about the sharing economy when you get right down to it is we

can have distinct parties across the globe interacting with people in exciting new ways

without any sort of government intervention.

The law was not designed to deal with companies that are only facilitating this kind of work.

There needs to be some sort of regulatory catchup in terms of novel regulations that

acknowledge the fact that these innovative companies exist and will continue to exist,

but at the same time they have significant responsibilities to the communities in which

they operate.

So the question is should the ‘sharing’ or ‘access economy’ be regulated the same

way as the regular economy?

We’re not doing a great job of regulating the regular economy, if we want to call it

that, in a sense that we have allowed ordinary, everyday, innocent, harmless economic transactions

to be encrusted by layer upon layer of regulation, many of them completely indefensible.

Taxi regulations don’t make sense in a highly technologically driven society that we have.

Employers are endlessly creative in finding ways to innovate around and with regulations.

At the end of the day, whether or not they have a good product or a good service is going

to be what determines whether or not they succeed.

The reason that hotels cost more than Airbnb – at least one reason why – is that they’re

regulated.

They have fire escapes.

They have safety protocols.

They have sanitation inspections.

And that just doesn’t occur in the Airbnb world.

I think the government has to decide whether it’s going to treat companies like Uber

or Lyft just like companies, or whether it’s going to treat them as a partially regulated

or completely regulated industry, and I think that question is going to become more and

more urgent as the precursors to the sharing economy become less and less relevant.

Some people would try to regulate this economy before we understand it well enough to know

exactly how to regulate it, because they want to be safe and not sorry, but what are we

really afraid of?

People’s main question is “Isn’t that dangerous?” so I kind of explain it to them

like, “It’s dangerous everywhere you go.

When you get on the train, when you go to work, when you get on the airplane, you're

next to strangers.

Strangers are everywhere, you know what I mean?”

As for regulation, says Nick Grossman, they are self-regulated by the customers who publicly

rate them.

The major innovation is this idea of generating trust and safety.

If you're a bad actor, we’ll know.

If you're a great actor, people will know that, too.

If you think you’ve been mistreated or harmed or abused in any way, you can give instantaneous

feedback to the platform to say something didn’t go right here.

There’s always a tradeoff between making things safer and making them affordable, and

there’s always a tradeoff between government regulation and freedom of choice, and that’s

something as a society we need to reevaluate now that we have new tools to have new choices.

Innovators and entrepreneurs should be able to go forth and experiment with new technologies

without sort of heavy-handed, top-down, preemptive controls, and the sharing economy has sort

of rejuvenated this permissionless innovation idea and expanded it now to all sorts of sectors

that we previously thought were going to be regulated forever, but now we’re seeing

that there’s hope for a more innovative future because of this new model.

There’s many good things about the sharing economy in terms of eliminating, in some areas,

bias, increasing economic opportunity for depressed communities, and giving access to

people like the disabled.

We have to ask ourselves the question “When innovation occurs in the economy, often without

any government involvement at all (as is true in the case here), does the innovation serve

our social purposes?”

It’s not enough to innovate and even to make money off the innovation; we have to

ask ourselves “What does it mean for our economy?”

It’s not just economics.

It’s freedom.

It’s liberty.

It’s people being able to find each other and coordinate their affairs.

Not just the economy, but the world is better off when we have those kinds of interactions

happening.

That’s wealth, that’s prosperity, and it makes everybody’s life better.