View the original article on the King’s Review
By Julia Dreher and Francesca Pick
Today’s most known representatives of the sharing economy discussed in global media are online platforms built on top of venture capital backed, hierarchically structured organizations. Francesca Pick and Julia Dreher argue that there is a fundamental misunderstanding today in the discussion of the subject: the sharing economy is built on rhizomatic network structures holding the potential for deeper societal transformation.
It’s been a long night, you’re at a pub, and you want nothing more than to get home quickly. Finding a cab this late at night in London is nearly impossible, but luckily you have the Uber app on your phone and can order a car right to the pub’s doorstep without leaving the comfort of your seat. You quickly choose between Uber Black or Uber X (the cheaper version of the Uber black car service that runs with “drivers like you and me”), tap the “request car” button, and you’re ready to go. Two minutes later a black Renault driven by a young man in his 30s pulls up. You will not even have to talk with him to pay the bill because the app takes care of that for you.
Uber, the on-demand taxi app, has been a hot topic in the media over the past months. From the regulatory issues and bans the company has recently faced in various European cities to growing criticisms of its aggressive expansion strategies and sales tactics, to protests being staged by its drivers, Uber is capturing the public’s attention. Interestingly, The Guardian, Time, Salon, der Spiegel and many other prominent media sources participating in the discussion surrounding Uber have been describing the company as one of the key representatives of the so-called “sharing economy.” This is an unfortunate misnomer.
The sharing economy is a relatively recent phenomenon that experts and academics are still trying to articulate. The term is intended to capture new, more collaborative forms of creation, production, distribution, trade and consumption of goods and services that are being enabled by new technological platforms. By focusing on Uber as the representative of “the sharing economy,” we risk confusing the public’s understanding of the sharing economy and overlooking many revolutionary enterprises that better exemplify an ethos of actual sharing.
Let’s start with the basics: one of the underlying tenets of the sharing economy is that technology should enable us to use our resources more efficiently by replacing the ownership of goods with access. As Rachel Botsman describes in her 2010 book What’s mine is yours, new apps and online platforms can unlock the “idling capacity” of houses, cars and utilities by matching people’s haves with other people’s wants. Such technologies, she argues, will help reduce overall consumption and represent an important step towards more sustainable lifestyles.
Ride-sharing is a good example of a ‘true’ sharing economy: people driving from A to B can harness the “idling capacity” of their cars by filling their seats and splitting the cost of gas with travellers going to the same destination. Uber and its competitors such as Lyft or Wundercar are particularly fond of describing themselves as real-time or on-demand ride-sharing apps. According to Wundercar’s website, the app helps you to “spontaneously find someone to give you a lift.” Likewise, Lyft drivers are described as “your friend with a car”.
Referring to these apps as “ride-sharing” services, however, is deceiving. Their drivers don’t happen to be riding through town and spontaneously decide to give somebody a ride. They are semi-professional or private individuals looking to top up their paychecks, working as informal taxi drivers. Since they are on the road because of the app, we cannot speak of “idling capacity” here. Nothing is actually being shared. For this reason, the French government recently issued Uber a €100 000 fine for mis-labeling themselves a “car-sharing” service when in fact they are a private transportation company.
But the absence of any real sense of sharing runs deeper. As a brand, Uber promotes a lifestyle that is hardly egalitarian, communitarian or conservationist: their website features images of young, well-dressed, successful-looking people that invoke an air of luxury, materialism and elitism. What’s more, recent stories in the media document Uber’s “workers’” lack of rights and the company’s unscrupulous sales tactics. At the end of the day, Uber, for all its hype, is hardly a departure from the individualism and precariousness of other capitalist enterprises.
There is no doubt that Uber is disrupting an industry that is dominated by cartels and local monopolies. Nor is there any question that it is offering an impeccable service for which there is a large market. In this, Uber at least opens the door to begin imagining a different configuration of urban transportation services. But Uber is still perfectly in line with our current economic system. This is both its strength and weakness. The fact that it is only marginally different from that which already exists makes it much easier for it to be adopted by the mainstream. But this robs it of any ability to remedy the economic, social and environmental problems that our current system faces. As recent criticisms have pointed out, Uber is in fact exacerbating many of those same problems.
So if companies like Uber provide a misleading and negative image of “the sharing economy,” what might the true sharing economy look like?
The real sharing
Platforms like Uber are built on top of venture-capital-backed, hierarchically structured organizations. These platforms may enable people to share their resources, skills, and time, as well as to finance and produce their goods in mildly more collaborative ways. However, at the end of the day, they facilitate little more than a transactional form of “sharing” not much different than that of conventional capitalist exchange. While the pretense of “sharing” colors the front end of the services they offer, rarely does an ethos of collaboration permeate their actual organizational structure.
Uber is a classical Weberian hierarchy, based on a vertical, linear understanding of superiority and subordination.[1] The higher one climbs up the ladder, the more influence and power one gains. At the bottom of the company are the drivers who lack employment protection, have no official wage, and no say over their rights. Above the drivers are the founders and management who set the rules and aims of the organization and impose their decisions on the drivers. Above them are the shareholders who provide capital for the organization and force it to maximize the values of the shares through increased profits.[2] With profit-maximisation as their ultimate, operative logic, companies like Uber, Lyft, and many others claiming to be a part of the sharing economy invariably favor efficiency over social impact, output over outcome.[3] Such organizations put more emphasis on the question of “how” they can produce something (i.e. to maximize profit) instead of “what” they are producing (i.e. the quality of their product and its social and environmental impact).
Instead of transforming only the “front end” of the transactions and services that they offer, companies can implement the principles of sharing and collaboration in the “back end” of their enterprises. They can structure themselves in ways that distributes power and profit in less-hierarchical ways. Companies that are fully collaborative—that is, organizations that are collaborative at both front and back ends—better exemplify the ‘true’ sharing economy. Such companies are characterized by a heterarchical organizational structure.
“Heterarchy” has long been used to describe non-hierarchical or networked forms of organisation marked by flexible, horizontal structures that create greater opportunities for cooperation among actors within them. It fosters the emergence of diverse social relations. Different actors can communicate on the same level in such a way that enables anyone to take on greater or lesser responsibility according to their differing degrees of motivation, expertise, etc. The creation of such horizontal, flexible cross-connections leads to the recombination and creation of knowledge and often results in increased innovation and increased resilience. Unlike hierarchies, where encounters are foreseeable due to rigid and defined structures, heterarchies enable the emergence of and are able to cope with complexity and contingent, non-planned events.
The term heterarchy was first coined by Warren McCulloch in 1945 as a way to describe the general modeling of networks in relation to his work on central nervous systems and cybernetics. Heterarchies promote the emergence of rhizomatic structures as described by the French philosophers Gilles Deleuze and Felix Guatarri. In a rhizomatic network structure, a higher number of diverse relations are enabled through the possibility of complex interconnections that go beyond the hierarchical modalities of superiority and subordination. “The rhizome is a system of shortcuts and detours and is a place for ‘unforeseen encounters’. Within the rhizome, linear causality is replaced by a chain of contingencies.”
Neal Gorenflo, founder of Shareable, the non-profit news hub on the sharing economy, points to the fact that heterarchical organizations encourage and embrace a kind of sharing that is transformational rather than the merely transactional. For Gorenflo, such heterarchical organizations need not neglect considerations of output and efficiency, but in the process they prioritize distributing power relations and creating social impact.
A particularly good example of a heterarchical organization is OuiShare. OuiShare is an international community, a think-and-do-tank whose mission is to build and nurture a collaborative society. OuiShare’s main activities are community building, incubating projects and offering support to individuals and organizations through professional services and education. Examples of OuiShare projects include OuiShare Fest, a 3-day festival about the Collaborative Economy; POC21, a 5 week accelerator program for the development of open source, sustainable products; and Sharitories, a tool kit for cities and regions wishing to implement collaborative programs such as bike and car-sharing schemes.
The OuiShare community has a core team that consists of a several dozen people who run the organization on a daily basis, but the whole network is comprised of over 1000 volunteer ‘members’ whose participation within OuiShare is based mainly on their own ostensibly altruistic motives. The most important group of highly engaged members are called ‘Connectors’; they serve as highly active nodes in the network who animate and coordinate local communities and projects. As a “do-cracy”, OuiShare allows anyone with a strong interest and high motivation to take on greater responsibility and participate in decision-making processes or lead projects. Positions with high responsibilities are not static but change over time. This flexible structure enables OuiShare to open up a wider range of possibilities for participation within the network. Control and decision making processes are dealt with in a collaborative way, enabling the strengthening and building of a commons and social capital, fostering communities, relationships and developing resilience.
Some critics have argued that the sharing economy can only ever be parasitic to capitalism because those who do not already have private property to share are by default excluded from it.[4] Such arguments are premised on a narrow understanding of “sharing” limited to the direct exchange of goods or services of equal value. Platforms like Couchsurfing call into question such criticisms and allow us to think about sharing in a broader sense. Couchsurfing is the perfect example of a rhizomatic structure that allows users to move beyond a traditional, transactional mode of sharing. On Couchsurfing you can “surf” a couch even if you don’t have one to offer. If you can’t host, you might still offer your time to show someone around who is visiting your town. Collaboration is based on a much broader sense of exchange, tied more to notions of redistribution. Those who can offer something, offer it. Those who are in need can accept that offer but that doesn’t mean that they are obliged to give back something of the same value to the same person. Collaboration is distributed across the network and follows a rather circular logic. If you don’t have the same goods to offer back, you might offer something else to someone else. Eventually what goes around comes around and everyone is satisfied. This circular logic is essential to rhizomatic structures. Deleuze and Guatarri describe the network as a system of shortcuts and detours, which is what we can observe with Couchsurfing: rather than a “straight and direct” exchange of goods of the same value, we can see horizontal interactions between different participants of the network.
Numerous other examples of heterarchical organizations abound. CoWheels Car Club is a car sharing platform in the UK that runs as a not-for-profit social enterprise, where all surplus generated is reinvested back into the organisation to help fulfill its social mission of reducing car ownership and its negative effects on the environment. An example that takes collaboration one step further is Loconomics, a local peer-to-peer service marketplace from San Francisco, which is cooperatively owned by the freelancers who provide the services on the platform. A similar model is implemented by Guerrilla Translation, a P2P translation collective and cooperative from Spain that offers the same services as a translation agency.
Fairmondo, a German startup, offers a slightly different approach to participating in “the sharing economy”. Fairmondo is an Amazon-like online marketplace, owned and governed by its users, who are also its shareholders. An even more extreme example of such a distributed marketplace is the decentralized transportation system known as La Zooz. La Zooz eliminates ownership of the platform altogether by using an algorithm that runs by itself on the servers of each individual participant of the network. By running on the “Blockchain” (the technology underlying Bitcoin), La Zooz is able to operate as a decentralized, autonomous organization.
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Many of the best-known platforms currently associated with the sharing economy, such as Uber, are only transforming one part of the equation. In so doing, they perpetuate centralized, hierarchical, capitalist systems that stymie any kind of fundamental societal transformation. It’s true that such marketplaces have been crucial for opening doors and spreading the concept of the sharing economy to the mainstream. But collaboration can mean a lot more than simply offering a platform for transactional sharing. As companies like Uber come under increasing fire from the media, we may be tempted to write off the concept of the “sharing economy” altogether. Here though, it is important to look to the countless projects that truly exemplify an ethos of sharing and collaboration to be reminded of the exciting potential of this movement.
When evaluating platforms claiming to be a part of the “sharing economy”, it is important to look at why they were set up, how they are organized, and who they are intended to benefit. Those that implement a logic of collaboration, sharing and distributed power at each of these levels, stand to offer a compelling vehicle for change and force us to take seriously the transformational power of the ‘true’ sharing economy.
[1] For Max Weber’s theory of bureaucracy and hierarchy, see his ground-breaking work “Economy and Society” (1922)
[2] For a more in depth analysis of Uber’s organizational structure, see Janelle Orsi
[3] For a deeper understanding of the difference between output and outcome of organizations see Patrice Duran’s “Légitimité, droit et action publique”
[4] See for example Der Spiegel’s “Kalifornischer Kapitalismus” or Sebastian Olma’s “Never Mind the Sharing Economy: Here’s Platform Capitalism”
