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The Selfishness of the Sharing Economy

4/30/2015

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It’s been six years since the economic recession where we saw people lose their homes, jobs, livelihoods, and we’re still nowhere close to transitioning our economy into a different direction. Or are we? The “sharing” economy is quickly becoming a fan favorite for both progressives and libertarians. But does this new model of economics have staying power,  is it a fad, or worse, is it a new cloak for businesses to hide behind while stripping workers and consumers of their security?

Airbnb, Uber, and Lyft are just a few of the top names we know that make up the growing trend labeled the “sharing economy.” Its purpose: to progress into an economic model that is P2P, people to people. A model that is supposed to reduce our reliance  on big corporations and instead reach out to our common neighbor to share and conduct business. While it supposedly offers a new direction away from the  capitalist model, its creators are ignoring problems of the current economy.

The sharing economy, for many, is the next evolutionary step of transitioning all business transactions to be solely online.  The sharing model shares many similarities of that with the '90s dot-com boom and the with the type of thinking of using online to transform businesses. And while the sharing economy is a booming market and quickly expanding, its impact on the economy as a whole is  too early to determine the true nature of what is to become of the movement. At the moment, the current display of values each company is professing and what their collective impact on individuals actually is  paints a complicated and alarming picture.

Airbnb and Uber are the two most famous examples of the sharing economy with their dramatic growth in the last couple years. Airbnb has exploded into the market allowing people to rent out their home or parts of their home through the internet. Uber, in a similar fashion, is quickly altering the way we think of taxi services – potentially making those yellow cabs obsolete – as the company runs on workers who use their own vehicles to taxi customers around using  an app on their phone to connect with nearby drivers.

These two services are a welcome alternative to the otherwise expensive and inconvenience of finding a hotel,  or waiting for that yellow cab to appear to take you to your next destination. In our sped-up world where convenience is king, we attribute these kinds of quick reaction and near-instant gratification as beneficial for everyone. We're all on the go and all have something else to be doing than wasting money, or worse, wasting time.  

Proponents speak of the all-inclusive ability of the sharing economy to allow everyone to connect with each other. It's a way to navigate around the evil and impersonal corporation. Some might take note of the irony here, especially when looking further into the profiles of those running Uber, Airbnb and other various sharing economy businesses. Uber alone is valued at  $41 billion and is continuing to expand, even while breaking the law and dealing with potential lawsuits in various cities. Airbnb, which started in the drearily gentrified city of San Francisco, is in the works with a private firm that would place their value at  $13 billion. With both Uber and Airbnb, the actual providers of goods and services,the people renting out their homes and vehicles, don't share in the value of income that the people in the corporate offices of these businesses do.

Working 60-hour work weeks, drivers of Uber are lucky if they pull in $14 an hour. And this is on top of the restrictive rating system. Airbnb renters income can range from $15,000 to $75,000 a year. In most cases, homeowners using Airbnb  have helped them maintain their apartment or home in the face of looming eviction.

The largest misconception when calling this movement a “sharing” economy is that it actually perpetuates  the gentrification of neighborhoods with the subletting of rooms from owners and renters facing foreclosure due to lack of funds. Airbnb itself is not the main driver for gentrifying cities like San Francisco, but their presence along with other tech companies is a major cause.  In order to diffuse gentrification, cities restrict short term leases or subletting and Airbnb attempts to stop the practice, but  they are only bandaging a problem for those who might otherwise be homeless or live in neighborhoods that are financially unfeasible.

As the company attributes itself with opening up the economy to make a world where people can work and share with each other, some of the leadership in the company echo the divide that is being felt in lower-income neighborhoods. A video that went viral last year shows the techies from Airbnb renting out an otherwise public soccer ball field. The video shows a local resident, who was eventually forced out of his home in the Mission district, explaining to the techies that it's a public field and trying to compromise and play together,  a common practice in the community.The techies instead decide to split up the field, keeping the barriers between the haves and soon-to-be have-nots.

To be fair, Airbnb has helped some cities, such as  assisting the city of San Francisco to pull in more local dollars to business that aren't often seen by tourists and visitors who stay in hotels.  Yet, the issue that comes with companies like Airbnb and Uber is their appearance  as a friendly and non-corporate entity to avoid having to expose the negative aspects of their business. By framing the dialogue of their movement with words like “sharing” they are appealing to the progressives ideals of being communal, but in reality, they proceed under the same corporate model structure of profit flow. They are neoliberal projects hiding under the guise of progressive politics.

By creating a sense of community and allowing workers to partake in their environment, they can persuade the public that they are good and helpful. With the cheaper prices, avoiding unions, circumventing taxes, and in some cases ignoring city or state laws, they appeal to the people who might otherwise opt of out to vacationing in the city or country. And with Airbnb expanding to allow businesses using the service, it will alter the way companies and other corporations might look at business trips with the cheaper housing costs. Again, this a direct benefit to the upper class, while the middle and lower class continue their descent into poverty, if they're not already there.

The CEO and founders of Airbnb and Uber are counting on people to connect with the idea that the market and rules of the economy have changed after the recession. Millennials no longer look at employment as a stable and secure position. It's what images we present on our social media that we can sell; we are the commodity. Our identity is therefore connected to the person we sell online and it's through this that we make a living. 

While I'll admit, I don't think that office job for life is going to come back, nor would I want it, I think the fact that by sidestepping job security and liveable wages these businesses and this economic model is harmful to future generations. We may not have those secure jobs for life our parents had, but people still want a job that provides some security, some insurance, and a liveable wage.

In most cases, a large portion of the sharing economy is made up of workers who are in transitional phases; working a job and looking for extra income, students, or college graduates that are struggle to find a job in ever shrinking market. Many may argue that's where the sharing economy is helping. But, as I've said earlier, they aren't looking to solve the root of these problems.

Common Dreams had a fantastic piece that gets in depth on the many things the sharing economy model can do if they want to have a real changing effect. Things like working to stomp out poverty by providing livable wages. Using their profits in environmental models that would pull our dependence away from fossil fuels. And companies like Uber and Lyft would be more helpful to combating global warming and making the world reduce its consumption by investing into public transportation.

Using the word “sharing” is key to promoting their friendly image in creating their business model. Co-op's and real worker owned companies are actually having positive impacts and the real potential economic model for change. If these billion dollar companies were to break up the corporate model and turn their business model into a co-op or worker-run company (especially in cases like Airbnb and Uber where the workers are not only doing the work but providing the raw materials: cars and homes) that would be a real sharing economy. To build an economy based around worker owned companies would be  a game changer and really address the issues that tend to arise when a private or public company grows quickly and leaves little for the workers below.

There are many good companies that are part of the sharing economy and using it as a means to make a profit and positively contribute to communities. I picked Uber and Airbnb because they are the most famous and biggest drivers as to what happens next. I fear that if anything these companies will expand and continue to exploit the workers and continue the current economic trend of not solving anything. I fear they might continue to take advantage of those who are in debt with the appeal that they can go on a cheap vacation  while dismantling the unions and workers rights that are already disappearing. By acknowledging these issues now,  consumers can push these companies to be true to what they preach. Otherwise, we'll be sold into a way of thinking that will leave more people struggling, and a world more divided.  
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The Poverty Epidemic

4/11/2015

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(Originally published at http://communitysoul.net/2015/04/the-poverty-epidemic/)

Recently, a YouTube group has released a couple videos in an effort to grow poverty awareness. The most recent shows a child who looks around 12 years old, who pretends to be homeless, sitting on the sidewalk of a busy street asking for help as he freezes in the cold. Several minutes pass showing people walk by the kid and take notice of him, but not stop to help him. Towards the end, a homeless man goes over to console the kid. Although these videos may jolt some into action and make us become more aware of a person who might be in need, they also touch on the deeper issue of our growing discontent of seeing and living with the homeless.

Many assume that living on the streets is an outcome earned by those individuals themselves. The homeless man or woman made a wrong choice and maybe we think they don’t deserve to live on the streets, but we’re not going to help them either. It further distracts the public from the growing inequality that continues even as we move away from the recession into a “recovery.” The truth is, 44% of the homeless population do have jobs.

The real issue is the way we perceive the homeless in economic and social terms. We can see it with the cutting of social programs and housing developments by our politicians and ruling economists. We can see it with cities like San Francisco as they try to literally wash away their problem, and with Florida arresting people who want to feed the homeless, and with stores installing spikes to stop homeless from sleeping in public areas. To fully acknowledge the issue of people being homeless and its continued growth, we need to alter the way we see these individuals.

Around 20-25% of homeless adults suffer from a mental illness. This highlights two important aspects of homelessness’ history. Since the 1980’s, we began to cut the budget to mental hospitals and its underfunding has continued to this day. This didn’t leave any options for people suffering with mental illnesses to go.

At the same time there are almost 50,000 veterans (many who suffer from PTSD) who find themselves living on the street any given night. This is particularly significant in comparison to our bloated military budget that’s handed off to military contracts and continues the expansion of 900 bases across the world. This signifies that there is money available to fix the problem, but the unwillingness to grant this money to those returning home from war is a continuation of our economic and political ruling ideology.

A recent video surfaced showing a former veteran harassing a homeless person because he found out the homeless man was wearing military jacket even though he had never served in any army. Aside from taking part in the persecution of the homeless, the former veteran does little to examine the man’s background. He doesn’t know the man, yet he feels that wearing clothing from the military is an insult that has to be pointed out and stopped. The issues of poverty or the fact that this man is literally living in the streets never enter into the veteran’s mind — instead  he focuses on the superficial image of “patriotism.”  Is it patriotic to disregard the poorer sections of your community? For many returning veterans, the irony of the situation is not missed, as most can relate to the homeless man’s predicament of being misunderstood, persecuted.

But how can we begin to acknowledge the issue of poverty in this country without acknowledging the economic model we all live under? Our economists may  have different points of view, but they all come from a similar background of how to present economics. Whether neoclassical, Keynesian, or neoliberal, these groups help in promoting the segregation of the classes and the growth of inequality. They do this simply by not acknowledging it or framing it in a different manner where people blame each other and become distracted from the real issue. It’s impossible to have an actual debate on poverty and classes without being seen as the perpetrator of class warfare.

And those who would point to growing movements like the $15-an-hour wage protests, or companies like Wal-Mart and McDonald’s raising wages to $10 an hour (in the case of McDonald’s, only a small portion of their staff would receive the wage increase), entirely miss the point. While the $15-an-hour wage increase is important, it doesn’t address the roots of the problem that make up and run our economy: the big banks, the lack of regulation of financial trading, the sub-prime car loans, stagnating wages, lack of investment in infrastructure, the housing bubble, pay-day loans, charter schools using public land while cutting the budgets of public schools. The list goes on.

As the Federal Reserve continues to extend its low interest rates for lending to big businesses and the banks, these groups are still slow on extending that money to the public. We’re also not seeing an increase in well-paying jobs with security as the economy grows. We’re not seeing investment into local communities that could helping deteriorating cities like Detroit, Baltimore (which is becoming the new Detroit), and many other cities.

The politicians fall in line – if they’re not already in the pockets – of pay-day loans and the growth of debtor prisons (which were ruled illegal since 1833). Jon Oliver has done a fantastic job on illustrating these troubling issues that affect the middle and lower class on his show Last Week Tonight. These issues are of course products of creating poverty and homelessness, and without change it will only get worse.

To highlight our disconnect of poverty even further, look to liberal bastion cities like New York and San Francisco (San Francisco being the most expensive place to live in the US) to  see how much rent has skyrocketed  in these cities in the last decade. The dramatic increase in rent has gentrified neighborhoods and created the most segregated schools in the US. These are cities that are supposed to extend help  to the community, but both cities are continuing to see an increased income divide and a loss of culture as their economy gets “better.”

Even in my own city of Corvallis with the opening of a wet homeless shelter, debate continuesas people already are getting anxious  about the growing presence of homeless living in our parks, and of finding needles in a park across the street from a school. People who might like to do more for the panhandler looking up at them as they enter the grocery store have their own busy lives to live.

Yet, when I look around my own town, I see the people, young and old, in the streets. I learn that many of the people here are veterans, have lost their jobs, come from troubled and abusive homes. Some struggle with heroin and meth addiction, but that only highlights another symptom of poverty. Without hope, what is there to hold on to?

Utah has been one of the first states to implement a simple solution that is the best one so far:  they created housing for the homeless. After doing the math and seeing that it cost more to have people living on the streets with medical bills, they built housing. In most cases, it’s allowed people who lived on the streets without employment to actually be hired and hold onto  jobs.More cities are coming together to build tiny home communities for their homeless. And while these solutions may not alter the presence of poverty right away, they are creating a communal spirit that is challenging the current economic model and beginning the transition to something better for everyone.
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