Magazine of the Socialist Party, Australian section of the CWI

A real sharing economy would remove the profit motive

Today you can choose from hundreds of thousands of short-stay rooms in 192 countries as well as hail a ride in over 60 countries with just the push of a button on your smart phone. AirBnB and Uber have become household names with millions of people now participating in these new “sharing economy” platforms.

Is this a shift away from the “business-as-usual” model and how jobs have been traditionally created?

The term “sharing economy” covers a wide range of economic activities where the goal is the utilisation of resources by allowing peer-to-peer access to those resources. While the concept is not new, the development of technology has been the key factor in the rise of the recent platforms. Apps have revolutionised the means of communication and transaction through the internet.

The idea of sharing things that are under-utilised itself is actually a rational one that has the potential to benefit people and preserve the environment. Kutsuplus for example was a small start-up which operated a public network of minibuses around Helsinki in Finland. They used computing algorithms on smart phones, similar to Uber’s algorithms, to provide an efficient service.

If encouraged to develop, a service like this could have helped to cut across the need for private cars and been fully integrated with the public transport system to provide more widespread coverage. Unfortunately Kutsuplus struggled to compete with private operators who were driving down wages and as such it was scrapped.

Most sharing economy platforms in recent years however have not been associated with genuine community-based innovation but with very profitable private businesses.

When participating in these for-profit platforms, human interactions between “peers” are not separate from the dominant economic system – capitalism. What people are engaged in is in fact just the regular exchange of commodities – renting services and goods while a capitalist hives off a share of the wealth.

As a result it is estimated that the value of Uber and AirBnB is around $62 billion and $20 billion respectively. AirBnB and Uber actually have enormous financial support from venture capitalists like Google, Amazon and Goldman Sachs.

At the behest of these investors, Uber have been engaging in dirty tactics to recruit its competitor’s drivers and drive down prices to beat its rivals. Another reason for Uber’s success is because many of its financiers are avoiding tax by utilising off shore tax havens. In reality this means that Uber’s cheap rides are not cheap at all compared to the potential alternatives!

Ideally the enormous amounts of tax revenue being lost could be used to fund an expanded public transport system that incorporated initiatives like Kutsuplus. Instead we have Uber ruthlessly exploiting drivers, taking up to 30% from fares, and refusing to compensate drivers for petrol, maintenance, insurance and many other expenses.

The unique aspect of the sharing economy is that it has managed to find a way to turn ordinary people’s personal property like cars, homes etc into profit making tools. At the same time the platforms classify workers as independent contractors in order to avoid a whole range of associated costs.

While the platform maintains control of the means of production it is the drivers who are actually creating the wealth. None of the workers enjoy basic work rights. Instead of using technology to take society forward and raise standards of living we have capitalist corporations continuing to wind things backwards.

The rise of the sharing economy goes hand in hand with the rise of casualisation and growing wealth inequality. If organised on a different basis it could be utilised for good but on a capitalist for-profit basis the potential advantages the technology possesses are wasted.

In contrast socialists stand for the utilisation of technology to efficiently allocate resources and reduce the burden on working people. We fight to bring the big corporations, including companies like Uber and AirBnB, into public ownership and under democratic workers’ control.

By removing the profit motive we could free up billions of dollars of wealth to invest in an expanded, free and integrated public transport while creating millions of well paid jobs. That and much more is what a real sharing economy could produce.

By Tim Tran

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