The Sharing Economy Works Because of Desperation, Not Trust

#Money

Wed, Apr 30th, 2014 10:00 by capnasty NEWS

On the New York Magazine, Kevin Roose argues with Wired's perspective that the shared economy (think Uber, Lyft, Airbnb) is not just the result of a "set of digi?tal tools that enable and encourage us to trust our fellow human beings," but rather, a response to just how much the real economy has been struggling.

Tanz's thesis isn't wrong — these innovations have certainly made a difference. But it leaves out an important part of the story. Namely, the sharing economy has succeeded in large part because the real economy has been struggling.

A huge precondition for the sharing economy has been a depressed labor market, in which lots of people are trying to fill holes in their income by monetizing their stuff and their labor in creative ways. In many cases, people join the sharing economy because they've recently lost a full-time job and are piecing together income from several part-time gigs to replace it. In a few cases, it's because the pricing structure of the sharing economy made their old jobs less profitable. (Like full-time taxi drivers who have switched to Lyft or Uber.) In almost every case, what compels people to open up their homes and cars to complete strangers is money, not trust.

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