Visions of the Sharing Economy Present and Future from NYU Conference
BY Sam Roudman | Tuesday, June 3 2014
Friday's conference on the Collaborative, Peer and Sharing Economy (let's say CPSE for short, though CollaPSE is a tempting acronym) at NYU's Stern School of Business was an attempt to reckon with the so-called sharing economy, its potential and its contradictions. Everyone agreed that peer-to-peer networks are changing markets for lodging (Airbnb), transportation (Lyft and Uber), commerce (Etsy, Ebay), and potentially other parts of the economy like finance, and healthcare. Views over the extent of this change differed as panelists explored the new economy's potential as a business, its fraught relationship with regulators, and its capacity to transform society.
Largely moderated by NYU Stern professor and sharing economy booster Arun Sundararajan, the conference provided an opportunity to see what those working within, or at least dealing with (as in the case of regulators) the CPSE thought of their own work. Although many speakers took the transformative potential of the CPSE as more of an article of faith than evidence, on the whole, the conference provided insights into how the economy might work, and the impact it might have. Here are a few highlights:
A future dominated by the sharing economy seems great and also scary.
Arun Sundararajan framed the CSPE as part of a societal shift away from owning assets to accessing them through peer-to-peer platforms. Economically, he painted a rosy scenario of expanded consumption based on greater access to goods, and productivity gains from better use of existing capital. He imagines corporations waning as peer-to-peer networks (many of which today are, ironically, highly valued corporations) grow in power. Less rosy, he sees the continued shift from a "traditional" to a "peer-to-peer" economy--and it should be noted the extent of this shift in progress is not at all a given–-will blur the lines between our personal and professional lives.
Presumably, with corporations employing less people, many more will end up as micro-entrepreneurs, toiling in the fields of their latent assets. Seeing the potential social dangers of such an arrangement, a number of panelists brought up the question of how to provide a social safety net in a society without traditional employers (with no clear answer) and the payroll taxes they generate. Sundararajan also sees platforms taking on the responsibilities traditionally shouldered by governments (something governments might have something to say about), and wonders how we can create "a new division of responsibility" between the two.
The all freelance peer-to-peer employment dystopia is not coming anytime soon.
The first panel focussed on the changing world of work, particularly the trend of more workers freelancing. There is reason to think that not all employment will shift to being flexible or part-time, at least according to Jeffrey Wald, COO of a company that teams freelancers with corporations called Work Market. He suggested that major corporations are hesitant to move too much of their work to freelancers because it creates potential tax-liability and compliance issues which "scare the life out of" their HR and legal departments. But although corporations won't eliminate full time employment anytime soon, that small sliver of freelance employment they will have can still be worth tens of billions in coming years, to freelancers, and presumably, the networks that establish their bona fides and connect them to corporations.
Regulating the CSPE is totally possible.
Leading a later panel, Andrew McLaughlin, the CEO of Digg, sought to "de-cartoonize" the conflicts between peer-to-peer networks and regulators, where regulators are depicted as "corrupt, inefficient, rent-seekers" and companies like Uber or Airbnb are depicted as "brutal" and short-sighted libertarians. Meera Joshi, CEO of the New York City's powerful taxicab and limousine commission, made the point that the commission has long allowed for pilot experiments that deviate from its rules, and pointed to Uber's incorporation into New York City as an example of regulators and a peer-to-peer network working together. Josh Gold, director of strategy for the New York Hotel Trades Council, said CSPE companies get in their own way by not working with regulators. "You are much more successful when you figure out ways to work with [regulators] rather than attacking them," he said.
The CSPE is making capitalists contemplate the end of capitalism.
Union Square Ventures partner and VC Fred Wilson painted a drastic picture of where peer-to-peer networks might lead. "We're in stage one of this revolution, because you’re still working for a boss," he said. Companies like Airbnb and Uber are still centralized networks taking a cut from user's transactions, in other words, those employed by them are still "slave[s] to the system." He imagines developments in computer science, block chain architectures (which undergird transactions in Bitcoin), and cryptography could create "trustless" systems that won't require a central clearing house.
To explain, he delved into what sounded more like zen koans than details. "Think about gambling without a casino, think about stock without an exchange, real estate without deeds," he said. "We will see systems that are self governing." On the plus side, this will allow Uber drivers and Airbnb hosts to make more of what they charge. Unfortunately, Wilson thinks the challenges of incorporating CSPE companies into the economy today are just precursors to "much larger fundamental problems" in the institutions of government, corporations, and capitalism. These were not discussed.