The Slaving Economy

I’ve already laid into the sardonic mention of “political correctness” in arguments over societal mores and traditions but there’s a term that frustrates me even more: the “sharing economy”. What’s worse about this term, and the practices it denotes, is that I find its largest proponents on my side of the political and generational spectrums—and it’s a hoax. It might just be the most ingenious marketing term ever wielded, in fact. It’s a euphemism, of course, for the appropriation of the assets belonging to the masses for the benefit of the few. To share means to divvy up or apportion. Now what is being divvied up, exactly? Well, it’s either one of the two things: property or labour. AirBnB, Uber, Lyft, Ebay and all their contemporaries seek to make use of the only resources the masses have in spades.

Let me be clear, I don’t claim to be a socialist. Yes, it’s true, I believe that there should be a social imperative in our economic systems but let’s face it: the betterment of your fellow man is just not as productive as the profit motive. We need both incentive and regulation working harmoniously to achieve better societies. Of course, both government and business are guilty in attempting to subvert the other’s goals. With the advent of the internet and the exponential growth of mobile technology, corporations have earned the upper hand and our governments have been loath to respond.

Why, you ask? Jobs. They’re like the Chinese finger-cuffs that keep business and government reluctantly entwined. One side wants to lose them, the other fights to keep them. For governments, jobs mean money for citizens that doesn’t have to come from their coffers but for business, employees are noth necessity and liability.

I’m not saying every employer secretly yearns to shed it’s employees. There are many examples of businesses and corporations putting a high value on its people; whether it be for shear altruism or simply retention the result is the same: what we refer to as “good jobs”. But this generally only occurs when the product or service being sold by the employer is of high value. Unfortunately, skills and education have a lot to do with how a person is treated in their industry. Enter the contractor.

Skilled or unskilled, the contractor conveniently satisfies both the government’s need to collect tax dollars and business’s desire to lessen exposure and overhead. Contractors are responsible for themselves, their employees (if any) and their tools. The must conform to a both the government’s directives for insurance, accreditation as well as the business’s timelines and quality controls. Perfect compromise, right?

Well, for a time, maybe. But now the paradigm is being abused. At first, websites began operating under the pretense of providing a service for regular people to buy and sell goods from one another. Then, hey! A great way to earn extra money while you’re away, rent out your place to a tourist. These are undeniably good ideas and they are planned, marketed and executed commendably. And it all went pretty well, for a while.

But that’s the point. The capital investment has been made in the system, not the product because the product belongs to us. AirBnB, Uber, Lyft make a healthy commission off the labour and assets of ordinary people. So, what’s the big deal?  Shouldn’t everybody have the opportunity to make a couple extra bucks in their free time or while they’re away? Of course, but unsettling trends have already begun to emerge.

In some cities, apartments are being purchased for the express purpose of operating as AirBnb destinations. This is problematic not just for the other denizens of the building but it also circumvents the many safety, insurance and tax regulations ordinarily followed by the hotel industry. Some have started Uber fleets that similarly bypass taxi regulations. And if legislation is drafted that is not conducive to their business model, these “sharing” companies are free to extricate themselves from the area. They have no permanent obligation to the communities they allege to service or those individuals and businesses that have invested capital and are now reliant on their infrastructure.  Without permanent connection to a community it is doubtful any of those commissions will ever remain there. In fact, all Uber revenue is filtered through multiple Dutch subsidiaries and licence agreements before the profit is deposited somewhere in the Caribbean. They effectively avoid all taxes.

There might have been a day I would have said good for them but I realize now the perniciousness of this model. Companies like Uber and AirBnB are able to accumulate untold (literally, they are both private companies) amounts of money with minimal exposure to liability, tax collectors or regulators. And those that just wanted to earn a couple extra bucks? Well, they assume all costs and liabilities (fuel, insurance, etc.) and get stuck with any sales or service tax requirements, which means that “a little extra money” turns into “very little money”; most are individuals not businesses and few probably do a proper assessment of their margins.

Queue the innovate and adapt argument. My favourite goes something like: “Well, you don’t see many candle-makers around any more, do you?” Yes, it’s true, candle-making has made a pivoted to a more niche market then the necessity of civilization it once was but it’s not a very good analogy. Candles were replaced by lightbulbs, one product for another. Ride and apartment sharing produce nothing– other than a juicy margin for those “sharing” companies.

I am not opposing innovation, I am merely advocating caution. Thirty years ago you were crazy if you owned a desktop computer, today you’re nuts if there isn’t a computer in your pocket. In another thirty years, we might find ourselves booking everything from dentists to dog-walkers on  our phones and if we aren’t careful a select number of companies will get a cut of it all.

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