In The Guardian, Evgeny Morozov proclaims the demise of the sharing economy “fairytale”—the idea that digital technology will empower grassroots economies and undermine corporate monopolies by facilitating decentralized peer-to-peer transactions. As Morozov argues, this vision can be realized only if it is backed by a social movement or political party committed to shielding such projects from market forces. Instead, as companies like Uber and Airbnb grow richer and capture more market share, they increasingly behave like the monopoly corporations they used to decry. Here’s an excerpt:
This fairytale has come to an end. The year 2018 is to the sharing economy what 2006 was to user-generated content: it can only go downhill. Platforms won’t disappear; far from it. However, the initial lofty objectives that legitimised their activities will give way to the prosaic and occasionally violent imperative imposed by the iron law of competition: the quest for profitability.
Uber may help some make ends meet through occasional driving gigs. The need to achieve profitability, however, means that it will have no qualms about ditching its drivers for fully automated vehicles; a company that lost $4.5 bn in 2017 alone would be silly to do otherwise.
Airbnb may have presented itself as an ally of the middle classes against entrenched economic interests. But the drive for profits already forces it to partner with the likes of Brookfield Property Partners, one of the world’s largest real-estate firms, to develop Airbnb-branded hotel-like residencies, often by purchasing and converting existing apartment blocks. Few entrenched interests – save, perhaps, for the tenants who see their apartment blocks become Airbnb-run hotels – get disrupted here.
Given the huge sums involved, the most likely outcome of current battles in sectors such as ride-sharing will be more centralisation, with just one or two platforms controlling each region. Uber’s surrender – in China, India and Russia, as well as much of southeast Asia and Latin America – to local players, many of them also backed by Saudi money, suggests as much.