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No coincidence that "Sharing Economy" rises across New Mexico during hard times

Mar 15, 2017


  The so-called "sharing economy" is on the rise in New Mexico. AirBNB hosts in our state are up 60% over a year ago, while Uber and Lyft are recruiting drivers and expanding their reach.

 

One morning back in the Cold War era, I asked my father to explain communism versus capitalism. His response, crafted for a child, went something like this: Imagine coming home one day to find somebody else sitting in your kitchen, eating your food, and then going to lie down in your bed. This invocation of Soviet communal housing made his point: under communism, some guy will eat your food, drive your car around, and sleep in your bed. Capitalism has its flaws but at least you have your own stuff.

 

Under 21st century capitalism, we solicit people to sleep in our beds and ride in our cars.  Since the Great Recession, employment has only partially recovered while Wall Street has thrived.  Increasing numbers of people turn to freelance part-time labor to get by. This is sometimes called the "gig economy," as if we were all merry roaming musicians. The "sharing economy" is also a curious phrase, since paying for a service or rent is not the classic definition of "sharing."

 

 "You'll love being a host," proclaims AirBNB's website amid photographs of fashionably dressed young people laughing together. "Welcome people to your community and help them belong anywhere." You see, it's all about doing good. Sharing is caring.

 

It is also about using your own stuff to generate profit for a company. Fortune magazine reports that AirBNB anticipates annual earnings of $3.5 billion by 2020 and explains: "When you deliver a product based on other peoples’ assets and service, what you get is a network effect on steroids. The more people who stay at AirBNBs or use the service to rent out their home, the more valuable the platform becomes. And the company's fixed costs are incredibly low."

 

The rise of peer-to-peer or "sharing" services, including the aforementioned companies  and other platforms like Homejoy and Upwork, takes full advantage of a punishing economy. Stagnant wages and unemployment enable tech companies to tap into a low-wage workforce that does not enjoy the protections and rights of employees. These companies also circumvent many of the standards and regulations of traditional industries. For years, Uber has argued with a straight face that it isn't a taxi service, but merely a software company, to avoid the rules that taxis must follow. In New Mexico, the legislature is addressing exemptions in lodgers' taxes that benefit short-term rentals, like AirBNB hosts who rent out their own homes.

 

What the so-called "sharing economy" does is capture profit from rent and services while shifting the burden of investment and risk onto their workers. With so many people in precarious economic circumstances, the interest in renting out one's living room or selling car rides is understandable, but you have to wonder how many realize they are creating wealth for others with their own assets and labor, yet do not control the terms. The appropriation of their assets by internet companies is an old capitalist game adapted for the smartphone: reduce labor costs, transfer risk, and extract profit.

 

In my childhood, my father told me a story in which communists had to share their cars and beds. In my adulthood I watch as capitalism persuades people to open their cars and beds for extra income. I hear this described, with unintended irony, in terms of freedom and opportunity. Maybe this is a gain for working people, but I am not wholly convinced. 

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Algernon D'Ammassa writes the Desert Sage column for the Deming Headlight and Sun News papers. Write to him at DesertSageMail@gmail.com.