The sharing economy is sometimes just a new label for old problems
Joe Wright, 22 July 2015
A piece in this week’s, Director, discusses the arrival of the sharing economy, a new epoch in capitalism, whereby consumers are happy to exchange ownership for ‘access ship’. An example: the arrival of Apple music, which expands Spotify’s model of paying monthly fees to stream any song on the site, which has the potential to make renting music the norm for fans. Apple has, after all, managed to change whole industries in the past by using its considerable reach and customer base.
The thrust of the article was right: we are clearly edging towards renting access to things instead of buying, and companies risk a lot by ignoring the trend. As with the arrival of Netflix, Airbnb and even DogVacay (a company which allows people to rent someone else’s dog), the way we think about products and services is very much in flux. The author describes that, ‘many young people just don’t rate ownership as highly as their parents. They’re the mobile generation: for them, life is about shrinkage and portability.’ An attitude best described by that age-old saying ‘can’t take it with you’.
But should there be more caution in thinking this model can be extended to everything?The piece’s treatment of attitudes to owning property is a good example. There is an increasingly familiar argument that the growth of the UK’s Private Rented Sector is symptomatic of young people’s aversion to being tied down. Mobility is more important: young people are keener than their parents to try different careers and live in more than one country. But this logic bizarrely forgets that young people grow old. Carefree renting becomes far less appealing when children are a factor. Bequeathing a house is also as much about knowing there will be some safety net for family as gaining from the property market. Basically, mobility is only desirable for some phases of life.
More importantly, it neglects choice. The property market reflects nothing of the way the shared economy has become popularised in other sectors. If it was, then like Apple Music, I would have the option of renting a small mansion rather than buying a tiny house. I have neither as it happens. The company may be pushing its new model hard, offering free trial subscriptions as a hook, but it is to folding up its album buying service, the iTunes store, too. This may seem an isolated example of a bad example for the shared economy narrative, but it’s a useful warning for applying the notion to other sectors too enthusiastically.
The sharing economy is a nice title. It evokes the social media element of the age we live in and makes the rise of renting things feel unique to our age. But as with the example of housing, a large part of this is just feels like the enthusiastic application of old ideas to new areas of the economy, and in some cases bringing with it very traditional problems. As with the instability of renting, if at some point I can’t pay Apple for access, I have no music. Stability for more choice is not always a wise trade-off.