Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Spring Fund Drive: Keep CounterPunch Afloat
CounterPunch is a lifeboat of sanity in today’s turbulent political seas. Please make a tax-deductible donation and help us continue to fight Trump and his enablers on both sides of the aisle. Every dollar counts!
FacebookTwitterGoogle+RedditEmail

The Latest Get-Rich Scheme

Last week Uber, the ride sharing company, raised $1.2 billion in its latest round of financing bringing the company’s valuation to an estimated $40 billion.  Financing was provided by a group of hedge funds including Glade Brook Capital Partners, Lone Pine Capital and Valiant Capital Partners.  Uber was founded in 2009 and operates in 128 cities in 37 countries.  Earlier this year, it raised an additional round of $1.4 billion.  Among its lead backers are Google (invested $250 million) and Fidelity Investments.  This sets the stage for an anticipated IPO during the next year or two with an anticipated valuation of over a $100 billion.  Welcome to the sharing economy.

A few weeks earlier, Uber hosted an intimate dinner soiree at New York’s charming West Village eatery, the Waverly Inn.  Ian Osborne, a former adviser to British Prime Minister David Cameron and consultant to Ubur, convened the schmooze-fest to improve relationship between the company and the media.  Among those being wined-and-dined were actor Ed Norton, publisher Arianna Huffington and journalist Michael Wolff.  Wolff invited a BuzzFeed editor, but no one appears to have told him that the get-together was “off the record.”

Two Uber executives, Travis Kalanick, co-founder and a Silicon Valley serial entrepreneur, and Emil Michael, senior vice president of business, hosted the evening’s festivities.  At one point Michael ranted about what he alleged was unfair media coverage directed at the firm, especially referring to a recent piece by Sarah Lacy in PandoDaily, her must-read Silicon Valley muckraking website.  She charged Uber’s management with “sexism and misogyny,” including reports that the company was involved with a French escort service.

At the dinner party, Michael railed against Lacy, arguing that more women were likely to get sexually assaulted by taxi drivers than Uber drivers. According to BuzzFeed, “he said that he thought Lacy should be held ‘personally responsible’ for any woman who followed her lead in deleting Uber and was then sexually assaulted.”  He appears to have also suggested “the company should consider hiring a team of opposition researchers to dig up dirt on its critics in the media — and specifically to spread details of the personal life of a female journalist who has criticized the company.”  In a follow-up press release, Michael said he regretted his words and that they didn’t reflect his or the company’s views.

Uber’s “rep” further deteriorated with recent revelations about its new app, “God View,” that enables it to track all users in a given city.  At a Chicago launch party, Uber reportedly demonstrated how it could tracked the location of 30 New York users in real time.  Earlier this week, BuzzFeed reported that the company used the technology to track the movement of a reporter without her permission – in apparent violation of its privacy policy.

***

Uber is one of an estimated 9,000 companies around the world involved in what is dubbed “the sharing economy.”  They have been promoted as the marketplace’s newest high-tech innovation by the New York Times’ Thomas Friedman along with commentators at Time, CNBC, Wired and innumerable other outlets.

A handful of examples suggest the range of personal practices or possessions that are being monetized in sharing businesses:

§  Transportation — personal taxi (Uber, Lyft), bike rental (Splinster), private airplane flights (Socialflights), recreational vehicles (Qraft) and an empty seat on a car trip (BlaBlaCar);

§  Space – rentals (Airbnb), private property for a party/reception (EventUp), a garden (Campinmygarden), an office (Loosecubes), driveway to part your car (ParkAtMyHouse) and reserved parking space (Panda Parking);

§  Goods — designer clothes (RentTheRunway, ReFashioner) and “gentle-used” second-had clothes (Tradesy), household items (NeighborGoods, SnapGoods) and even “fine” art (Artsicle);

§  Services – odd jobs (TaskRabbit), office cleaning (Exec Cleaning) and “on-demand mobile work force” (Gigwalk).

A recent report from Deloitte notes that, since 2012, venture capitalists have invested more than $2 billion in over 500 collaborative economy efforts.

It claims that last year 40 percent of North American adults used a “collaborative commerce” business.

Sharing companies are attractive ventures.  Lyft, Uber’s principle competitor, distinguishes its autos with a large pink mustache affixed to a car’s front bumper.  It is the poster-child of entrepreneurial sharing.  Launched in 2012, it operates in dozens of cities throughout the country.  In April, it received a $250 million investment from Alibaba, a Chinese an e-commerce company, comparable to eBay.  In went public in September on the NYSE, shares priced at $68, giving it a market value of $231 billion.

And the Big Apple was the big win.  Playing a cat-and-mouse game with black limo services, the city’s Tax and Limo commission awarded it a license to operate.  Lyft even has its own luxury service and even offers non-car owning drivers a lease/option deal on a “premium” Ford Explorer.  In July, after months of tussling, New York’s Taxi and Limousine Commission (TLC) finally gave the green light to Lyft, a ride “sharing” business, to operate in the city.

The TLC imposed a number of requirements on Lyft that suggest the boundaries of regulation in the days of 21st century regulation.  The company’s symbolic pink mustache will be placed on the dashboard; it will provide fingerprints of all operators – euphemistically dubbed by Lyft as “peer-to-peer drivers” — as part of a governmental criminal background check; and assure that drivers have completed a state-certified defensive driving course.

Unlike regulators of old, the TLC cared little for the operators, not setting driver working hours nor wage rates; drivers are suppose to receive 80 percent of all “donations” for each ride, but no hourly wage is stipulated.  Nor did it have much to say with regard to the “background checks” Lyft applies to riders – they must have credit cards, Facebook accounts, GPS-capable phones and maintain good ratings for continued service.

Other sharing companies are attracting deep-pocketed conglomerates seeking a stake in the new economy. Zipcar was bought by Avis Budget; Google funded Homejoy, a house-cleaning service; and DHL launched MyWays to look hip.  Perhaps the most “innovative” scheme — in an Orwellian sense — is Amazon’s Mechanical Turk, what it calls a crowdsourcing Internet marketplace to commercialize “HITs” (Human Intelligence Tasks).

Airbnb is another high-performing sharing venture.  On October 16th, New York Attorney General Eric Schneiderman issued a report, “Airbnb In The City,” that questioned whether the startup “sharing” company was not a yet another get-rich schememasquerading as a socially beneficial endeavor.  The AG found that between 2010 and 2014, 25,532 of 35,354 private short-term listings — 72 percent — violated state or city multiple dwelling or zoning laws.  ”This report raises serious concerns about the proliferation of illegal hotels and the impact of Airbnb and sites like it on the City of New York,” said Schneiderman.

The AG’s study reported that 6 percent of Airbnb “hosts” ran large-scale operations capturing 36 percent of all rental transactions and collecting 37 percent of total revenue, $168 million.  In one instance, the report said one commercial user, who rents out apartments regularly through the site as a business, made $6.8 million on 3,024 reservations in less than five years.

While the AG’s investigation was underway, Airbnb reported in August that it raised $475 million in additional funding from Sequoia Capital and Andreeseen Horrowtiz.  To date, it has raised a total of $801 million.

* * *

The sharing economy – and its mirror-image fiction, “collaborative consumption” — is but the latest effort to turn all human, social relations into commodities.   Over the last century or so, the social structure of interpersonal exchange, whether operating in the factory, office or shopping mall, turned all engagements into commodities, equally measured, un-equally valued.  The great consumer revolution of the ‘50s turned leisure — “free” time — into a vast terrain of profitable plunder.  What’s left?

The sharing economy’s guiding principle is simple: nothing human cannot be monitorized, commercialized.  Each company seeks to exploit yet-undiscovered, un-monetized personal or social relations, rendering them into things, commodities.

In our digital age, the last thing left to exploit is a person’s online identity.  Google has most successfully realized this principle and its lessons have been copied and furthered by Facebook and the ever-growing list of social networking schemes now cluttering the web.  Uber, Airbnb and other “sharing” ventures are aggressively aggregating personal data (i.e., “background checks,” the information gathered when one join) to better exploit their customers.

Sharing is promoted as something that combines 21st century high-tech private entrepreneurism with old-fashioned social good.  This is a tricky balancing act, pitting ideologically or moralistic high-mindedness against the bottom line and personal reward.  Since the 18th century Shakers, Americans have been unable to reconcile these competing imperatives – the tension between private gain verses the public good.  A growing number of complaints raised by both users and workers at sharing companies might signify the souring of this new hipster phenomenon.

The sharing economy’s new business model is based on two complementary principles.  First, local ordinances (e.g., safety, wages or health regulations) are to be relaxed because they restrict entrepreneurial innovation (i.e., “job creation”).  Second, the old-fashioned employee has become the “independent contractor” whose only right is to quit.

A half-century ago, the economist Joseph Schumpeter put forward a compelling theory as to capitalism power of renewal, “creative destruction.”  For a growing number of Americans with nothing (to borrow from Marx) but their labor power and personal possessions to exploit, sharing’s “creative destruction” might be the last-best option before selling their blood.

At its core, sharing businesses embody the twin tendencies of market-mediated human exchange — “communitarian” vs. “commercialization,” nonprofit cooperation vs. market-value maximization.  These tendencies seem to be increasingly irreconcilable.

An increasing number of people are realizing that the entrepreneurial hucksters promoting “sharing” are abusing the deeper meaning of “trust,” “collaboration” and the simple generosity of spirit that makes people human.  In the wake of the tumultuous home-mortgage banking scandal — in which no finance-industry executives went to jail — American’s are understandably suspicious of high-sounding claims that quickly turn out to be too-good-to-be-true scams.

Like pyramid schemes of old, the questions are simple:  who wins?; who looses?  Sharing schemes, if successful, work only for the huckster who figured out how to better – more precisely – separate the consumer from her/his money.

People are questioning the “truth claims” of for-profit sharing ventures.  Communitarian efforts, like food coops, community-supported agriculture (CSAs), church 2nd-hand thrift shops, library book sales and simply helping out a neighbor, suggest that sharing need not involve profit, private gain.  Sadly, the entrepreneur’s scalpel could cut them into the next start-up venture.

David Rosen can be reached at drosennyc@verizon.net; check out www.DavidRosenWrites.com.

More articles by:

David Rosen is the author of Sex, Sin & Subversion:  The Transformation of 1950s New York’s Forbidden into America’s New Normal (Skyhorse, 2015).  He can be reached at drosennyc@verizon.net; check out www.DavidRosenWrites.com.

May 23, 2018
Nick Pemberton
Maduro’s Win: A Bright Spot in Dark Times
Ben Debney
A Faustian Bargain with the Climate Crisis
Deepak Tripathi
A Bloody Hot Summer in Gaza: Parallels With Sharpeville, Soweto and Jallianwala Bagh
Farhang Jahanpour
Pompeo’s Outrageous Speech on Iran
Josh White
Strange Recollections of Old Labour
CJ Hopkins
The Simulation of Democracy
Lawrence Davidson
In Our Age of State Crimes
Dave Lindorff
The Trump White House is a Chaotic Clown Car Filled with Bozos Who Think They’re Brilliant
Russell Mokhiber
The Corporate Domination of West Virginia
Ty Salandy
The British Royal Wedding, Empire and Colonialism
Laura Flanders
Life or Death to the FCC?
Gary Leupp
Dawn of an Era of Mutual Indignation?
Katalina Khoury
The Notion of Patriarchal White Supremacy Vs. Womanhood
Nicole Rosmarino
The Grassroots Environmental Activist of the Year: Christine Canaly
Caoimhghin Ó Croidheáin
“Michael Inside:” The Prison System in Ireland 
May 22, 2018
Stanley L. Cohen
Broken Dreams and Lost Lives: Israel, Gaza and the Hamas Card
Kathy Kelly
Scourging Yemen
Andrew Levine
November’s “Revolution” Will Not Be Televised
Ted Rall
#MeToo is a Cultural Workaround to a Legal Failure
Gary Leupp
Question for Discussion: Is Russia an Adversary Nation?
Binoy Kampmark
Unsettling the Summits: John Bolton’s Libya Solution
Doug Johnson
As Andrea Horwath Surges, Undecided Voters Threaten to Upend Doug Ford’s Hopes in Canada’s Most Populated Province
Kenneth Surin
Malaysia’s Surprising Election Results
Dana Cook
Canada’s ‘Superwoman’: Margot Kidder
Dean Baker
The Trade Deficit With China: Up Sharply, for Those Who Care
John Feffer
Playing Trump for Peace How the Korean Peninsula Could Become a Bright Spot in a World Gone Mad
Peter Gelderloos
Decades in Prison for Protesting Trump?
Thomas Knapp
Yes, Virginia, There is a Deep State
Andrew Stewart
What the Providence Teachers’ Union Needs for a Win
Jimmy Centeno
Mexico’s First Presidential Debate: All against One
May 21, 2018
Ron Jacobs
Gina Haspell: She’s Certainly Qualified for the Job
Uri Avnery
The Day of Shame
Amitai Ben-Abba
Israel’s New Ideology of Genocide
Patrick Cockburn
Israel is at the Height of Its Power, But the Palestinians are Still There
Frank Stricker
Can We Finally Stop Worrying About Unemployment?
Binoy Kampmark
Royal Wedding Madness
Roy Morrison
Middle East War Clouds Gather
Edward Curtin
Gina Haspel and Pinocchio From Rome
Juana Carrasco Martin
The United States is a Country Addicted to Violence
Dean Baker
Wealth Inequality: It’s Not Clear What It Means
Robert Dodge
At the Brink of Nuclear War, Who Will Lead?
Vern Loomis
If I’m Lying, I’m Dying
Valerie Reynoso
How LBJ initiated the Military Coup in the Dominican Republic
Weekend Edition
May 18, 2018
Friday - Sunday
Andrew Levine
The Donald, Vlad, and Bibi
Robert Fisk
How Long Will We Pretend Palestinians Aren’t People?
FacebookTwitterGoogle+RedditEmail