The concept of the sharing economy has been hailed as a revolutionary way of distributing resources, prompting us to examine its fundamental nature. The aim of this discussion is to explore the cooperative principles evident in the sharing economy and the potential for sharewashing – the way in which businesses may collaborate to conceal exploitative behaviour. As concerns about this phenomenon continue to grow, a question arises: what motivates individuals to participate in a system that may hide exploitative tendencies? Delving deeper into these aspects is crucial to understanding the dynamics of the sharing economy more clearly.
Understanding the sharing economy
The sharing economy, defined as an economic paradigm where resources and possessions are collaboratively shared among individuals and groups, thus converting tangible assets into services, has undergone a transformative evolution facilitated by the advent of big data and online platforms (Richter et al., 2017). This digital-driven paradigm shift has fundamentally reshaped our approach to resource access and exchange, eroding conventional distinctions between users and producers. It has facilitated connections among previously disparate individuals, redirected the focus from corporations to individuals, and harnessed digital platforms as conduits for transactions (Geissinger et al., 2019).
This dynamic reconfiguration underscores the dual role of individuals as both providers and consumers of resources, utilizing digitalization to mitigate costs and introduce innovative sharing modalities that uphold the possibility of multiple users availing themselves of the same resource without a transfer of ownership.
Sharewashing–the new greenwashing
Sharewashing does more than just misrepresent things like renting, working, and surveilling as ‘sharing’. It does more than just stretch and contort the meaning of the word ‘sharing’ until it practically loses all meaning. It also disables the very promise of an economy based on sharing by stealing the very language we use to talk about it, turning a crucial response to our impending ecological crisis into another label for the very same economic logic which got us into that crisis in the first place.
— Anthony Kalamar
The concept of ‘sharing’ takes on an elusive and complex character within the theoretical and empirical frameworks around the sharing economy, making it difficult to distinguish it from traditional market transactions. A disconcerting trend, denominated as sharewashing and reminiscent of the ‘new greenwashing’, surfaces as businesses categorize themselves within the sharing economy ambit, even when failing to meet the environmental and social commitments intrinsic to genuine sharing practices (Hawlitschek et al., 2018). Sharewashing is characterized by an exaggerated emphasis on the ostensibly beneficial social and collaborative facets of a business, coupled with a downplaying or outright denial of any deleterious consequences or ethical quandaries associated with their operations.
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Unmasking the exploitation
An examination of the activities of sharing economy entities necessitates a re-evaluation of the dichotomy between full employment and casual labour (Mair & Reischauer, 2017). Despite its purported rhetoric of inclusivity, the sharing economy exhibits exploitative proclivities, imposing heightened financial burdens on individuals. While ostensibly empowering individuals to be creators and collaborators, the lion’s share of wealth accrues to the capitalists. Traditional employment structures, fortified by minimum wage assurances, overtime compensation, paid leave, and other safeguards, are sidestepped by sharing economy companies designating workers as independent contractors. This categorization places the onus on employees for the majority of costs and hazards related to their employment, as exemplified by Uber drivers, ostensibly emblematic of the sharing economy, often finding themselves in quasi-minimum wage positions.
Efforts to portray Uber drivers as entrepreneurial beneficiaries of flexibility and autonomy clash with the stark reality. Algorithms play a pivotal role in managing and surveilling these workers, orchestrating micro-decisions governing payment, ride allocation, and incentivization strategies (Ahsan, 2018). The semblance of worker autonomy conceals the fact that algorithmic management has supplanted overt surveillance and control, perpetuating the illusion of autonomy while entrenching low-wage employment.
In the domain of sharing platforms, the emphasis on building trust, particularly on for-profit platforms navigating uncertain regulations, leads to adverse consequences for all parties involved, including third parties (C. Köbis et al., 2020). Unlike non-profit platforms like Couchsurfing, commercial counterparts driven by profit motives exploit the establishment of trust as a means of financial gain. The profit-oriented nature of these entities creates a strong incentive to foster trust, sometimes at the expense of considering potential harm arising from transactions. Participants, encouraged to foster a sense of belonging, sharing, and trust, often overlook the negative implications of their engagements, both for themselves and those indirectly affected. The absence of traditional regulations further complicates the prevention and correction of adverse outcomes, fostering irresponsible sharing practices.
Recent reports substantiate concerns regarding platforms like Airbnb, revealing instances of widespread misuse. Examples include hosts altering profile pictures and names post-initial verification, and in more egregious cases, professional key companies managing fake accounts with identical images for over 200 apartments (C. Köbis et al., 2020). Despite these issues, guests relying on the platform’s information may assume they are dealing with vetted private hosts. This misplaced trust may lead guests to neglect to discern whether they are renting from an individual or a company. Furthermore, they might overlook broader negative impacts of their transactions, such as disturbances to neighbours due to excessive renting or societal issues stemming from hosts evading taxes.
The inception of the sharing economy, rooted in the sharing of digital content, has eliminated the necessity for a physical medium, employing peer-to-peer models such as networks or file sharing. This evolution has facilitated the distribution, circulation, and reformatting of digitized content (Richter et al., 2017). However, the sharing and distribution of digital content introduce entrepreneurial challenges due to the non-application of traditional pricing rules, facile access to capacity, and the anticipated freeness of digital content. Entrepreneurs also grapple with issues related to data protection and copyright concerns. Recent developments include the emergence of separate currencies based on the peer-to-peer strategy, underscoring the transformative potential of the sharing economy.
Why do people still engage in this system?
Despite facing criticisms, the sharing economy endures, attracting millions for varied reasons. Beyond the conventional business objective of providing convenient solutions, the emergent sharing economy stands out for incorporating frugality and social responsibility into its ethos (Newlands, 2015). It has emerged as a response to a period where financial constraints impeded full engagement in activities, providing a means to participate in more endeavours affordably and sustainably. This paradigm shift extends to how individuals travel, dress, commute, dine, and access financial services.
Engaging in the sharing economy serves as a valuable income stream, particularly in challenging economic climates, allowing individuals to monetize their assets such as vehicles or surplus space. Within sharing economies, individuals have the opportunity to generate income from these otherwise underutilized resources. An early pioneer in what we now recognize as the sharing economy was eBay, establishing a global electronic marketplace where individuals could buy and sell a wide array of items. Additionally, Airbnb is a preferred choice for many customers due to the perceived value for money, especially in high-cost locations, despite the company’s desire for its new emblem to symbolize global sharing (Eckhardt & Bardhi, 2015).
Furthermore, the sharing economy introduces convenience and flexibility. Individuals are no longer constrained to working in a traditional office setting every weekday to earn additional income. Many opportunities advertised on online job boards can be completed remotely as long as there is an internet connection. The need for in-person meetings among coworkers has also diminished, as online applications are widely accessible, streamlining communication processes (Nasrudin, 2020).
Beneath the veneer of the ostensibly altruistic ‘sharing economy’ lies a stark reality of exploitation and pronounced power imbalances in the digital realm, rendering the term inherently ideological. This euphemistic application of ‘sharing’ conceals the deep-seated polarization of power dynamics within the digital economy, underscoring the imperative for a nuanced understanding that transcends the utopian narratives surrounding the sharing economy.
The permanence of the sharing economy is evident, but it comes with a shared responsibility for leaders and stakeholders. Their duty lies in implementing this evolving business model in a manner that not only favours employees but also significantly adds value to sustainable development. Achieving this goal is plausible through the implementation of appropriate policies and regulations. Collaboratively, we can strive to shape a sharing economy that is both equitable and sustainable, benefiting all stakeholders involved.
Ahsan, M. (2018). Entrepreneurship and ethics in the sharing economy: A critical perspective. Journal of Business Ethics, 161(1). https://doi.org/10.1007/s10551-018-3975-2
C. Köbis, N., Soraperra, I., & Shalvi, S. (2020). The consequences of participating in the sharing economy: A transparency-based sharing framework. Journal of Management, 47(1), 014920632096774. https://doi.org/10.1177/0149206320967740
Eckhardt, G. M., & Bardhi, F. (2015, January 28). The sharing economy isn’t about sharing at all. Harvard Business Review. https://hbr.org/2015/01/the-sharing-economy-isnt-about-sharing-at-all
Geissinger, A., Laurell, C., Öberg, C., & Sandström, C. (2019). How sustainable is the sharing economy? On the sustainability connotations of sharing economy platforms. Journal of Cleaner Production, 206, 419–429. https://doi.org/10.1016/j.jclepro.2018.09.196
Hawlitschek, F., Stofberg, N., Teubner, T., Tu, P., & Weinhardt, C. (2018). How corporate sharewashing practices undermine consumer trust. Sustainability, 10(8), 2638. https://doi.org/10.3390/su10082638
Mair, J., & Reischauer, G. (2017). Capturing the dynamics of the sharing economy: Institutional research on the plural forms and practices of sharing economy organizations. Technological Forecasting and Social Change, 125, 11–20. https://doi.org/10.1016/j.techfore.2017.05.023
Nasrudin, A. (2020, October 30). Sharing economy: Meaning, types, pros, and cons. Penpoin. https://penpoin.com/sharing-economy-concept-types-pros-and-cons/
Newlands, M. (2015). The sharing economy: Why it works and how to join. Forbes. https://www.forbes.com/sites/mnewlands/2015/07/17/the-sharing-economy-why-it-works-and-how-to-join/?sh=3e79bb8858e1
Richter, C., Kraus, S., Brem, A., Durst, S., & Giselbrecht, C. (2017). Digital entrepreneurship: Innovative business models for the sharing economy. Creativity and Innovation Management, 26(3), 300–310. https://doi.org/10.1111/caim.12227