Upstream - Documentary #1: The Sharing Economy?

Episode Date: February 6, 2016

In this episode we look at how companies like Airbnb and Uber have influenced an entire generation and entirely shifted the economic landscape of major cities like San Francisco. Through candid conversations with journalists and industry insiders, we explore the darker side of these giant companies and investigate how this phenomenon arose and what implications are in store. Featured guests: Doug Henwood (Author, radio host, columnist for Harper's and the Nation Magazine) Keally McBride (Professor of Politics and the Chair of International Studies at the University of San Francisco) David Campos (San Francisco District 9 Supervisor) Dale Carlson (Public Accountant and Business Consultant, co-author of CA Proposition F) David Korman (Lyft driver, former TaskRabbit, Couchsurfing host) Upstream is a labor of love — we couldn't keep this project going without the generosity of our listeners and fans. Please consider making a tax-deductible donation to Upstream. Thank you!www.upstreampodcast.org/support Also, don't forget to subscribe, rate, and review the show on iTunes. https://itunes.apple.com/us/podcast/upstream/id1082594532?mt=2 For more from Upstream, visit www.upstreampodcast.org and follow us on social media: Facebook.com/upstreampodcast Twitter: @upstreampodcast Instagram.com/upstreampodcast

We are currently fundraising for this project, so if you like what you hear, please visit www.economicsfortransition. the bank of a river. All of a sudden, you notice someone float by who's drowning. You immediately jump in to save them, but as soon as you pull them to safety, you notice another person who's also drowning. You also pull them to safety, but pretty soon you notice that the river is full of drowning people floating towards you. You yell for help. You get people to jump in with you to save them. But at some point, when the drowning people keep coming, one of you has got to say, you know, I'm going to go upstream to find out why all these people are falling in in the first place. You are listening to Upstream. Upstream. Upstream. Upstream. A radio documentary series

that is part of the Economics for Transition project. I'm Della Duncan. Join me as we journey upstream to the heart of our economic system and discover cutting-edge stories of game-changing solutions based on connection, resilience, and prosperity for all. I had a really weird dream last night where I, like, felt scorn for all these kids I know from high school who I see on Facebook are, like, getting married and, like, have quote-unquote real jobs and, like, are in the rat race. And I wonder, I guess I wonder in my dreams,

in my subconscious, you know, whether what I'm doing here is right. But then I wake up. I live 20 minutes from downtown San Francisco, five minutes from downtown Oakland. I work only when I want to. I'm respected by the people I work for. And how much is Lyft a part of that?

Lyft is the glue, the necessary glue that holds my life together right now. When I can't make enough money working for City Arts and Lectures at the Norse Theater, when I can't make enough money doing photo booths for Snap Yourself or serving food to people, when all of that is not enough to pay the bills, then I drive Lyft to make up the extra cash to, you know, to pay the rent. But usually the jobs I love a lot are enough. This is David Korman. He drives for Lyft, an app which connects drivers with passengers directly instead of using a centralized booking service or hailing a cab on the street.

And in exchange, the app takes a portion of the driver's earnings. When we visited him, we got to take a ride in his car. So I see you have the pink mustache. So it used to be on the hood of the car, and now it's moved inside? Or is that... Does everyone do that? Oh, yeah, everyone's got this little blue and pink mustache. So no one has it on the hood of their car anymore? No, but I left the clips.

I have a big, giant, fuzzy one in my room. Are you one of the only ones? Like, they don't make them anymore? I think a lot of people just throw them out. Like, I've seen homeless dudes walking around with shopping carts with pink mustaches on them. Really? Can I see your pink mustache? Yeah.

David is part of something called the sharing economy, which in 2011, Time magazine called one of the top 10 ideas that will change the world. The term generally refers to online platforms that allow people to acquire or access goods and services from individuals outside of traditional businesses or corporations. Time argued that companies like Lyft, Uber, Lyft's main competitor, as well as Airbnb, a short-term vacation rental service, help us do many things. They help us make and waste less stuff because we're just increasing the use of things already in existence. They help us save money because we don't have to own things ourselves, we can simply buy access to them.

And that they help us make meaningful connections with strangers, such as we might when we get into someone else's car in the case of Uber or Lyft, or stay at someone else's house in the case of Airbnb. Although there may be some cases where these things are true, this isn't the whole picture. In this episode of Upstream, we'll take a look under the hood of the sharing economy and explore the conditions that created these giants

and discover what it tells us about our current economic system. We'll also hear about some of their not-so-savory impacts, as well as emerging alternatives. David told us that the sharing economy pretty much defines his life. He works for Lyft, worked previously for TaskRabbit, an app which allows people to outsource household errands and tasks that they need to get done to strangers. And he also hosts for CouchSurfing, which helps people visit and host each other for free. I wondered what David thought about all of these companies being under the name the sharing economy.

That's bullshit, because Couchsurfing is sharing. TaskRabbit is work. Lyft and Uber are not sharing things. I'm using my car to provide a service, but I'm not sharing my car with anyone. I'm sharing my thoughts if I have a conversation with them. I'm sharing my advice if they ask me where a cool music venue is and my experience in that way. But it is work. Doing someone else's laundry through TaskRabbit is work. Just because you share an experience doesn't mean that the economy is a sharing one. I don't think

you can economize sharing. I share my couch, my living room, the extra blankets in my house. I share that with people, and we share experiences, and we talk about our lives and then we part and we share those things. But no money changes hands because you can't sell and share at the same time. You know what is a sharing economy that was providing rides? The Montgomery bus boycott and the civil rights leaders who organized carpools for black people in Montgomery during the bus boycott. That was a sharing economy. They created an alternate system, an alternate bus system, so that their people wouldn't have to take public buses and be subjected to discrimination,

and to show that they had economic power. That's a sharing economy. Curious about this contradiction, we asked Doug Henwood, a U.S. American journalist and economic analyst, if he uses the term the sharing economy. Well, I use that because it's a term that people know, and it's kind of hard to make up your own terminology, given that language is a social thing. People like the idea of sharing. There's a certain appeal to that, and I think people who use this language understand that

there's an appeal to it, that people have a more utopian longing to get away from this atomized individual world we all live in and to have some connection with other people. So yeah, I use it, but I hope you can hear the air quotes when I do use it because it's a strange concept of sharing. We learned in kindergarten that sharing is a good thing, but the way that sharing operates in the Uber, Airbnb world isn't exactly the selfless thing that we all aspired to back in kindergarten. But yes, it's a term I use, but quickly go into an explanation of what it's all about.

I think sharing is a misnomer. I think sharing is a misnomer with most of these corporations. This is Dr. Keeley McBride, professor of politics and the chair of international studies at the University of San Francisco, who is currently conducting research about the sharing economy. We asked her what term she would use instead. I would say the gig economy, where you make yourself available for really specific gigs. And it's not any kind of extended employment. It's entirely precarious. I think the gig economy is a pretty good word for it. But many people, including David Korman,

are drawn to this economy precisely because it provides them with paid gigs. It gives them the flexibility and autonomy they want and helps them avoid 9-to-5 office culture. In this way, the sharing economy helps people live like micro-entrepreneurs. We asked Doug Henwood to give us some context about why this prospect is so alluring and why it can be potentially problematic. The reverence for entrepreneurship that grew up starting in the Reagan years

provided an ideological framework for people to embrace this sharing economy. You can be your own boss, run your own business, and most people who are involved in this world are not making a whole lot of money, but the appeal of entrepreneurship and self-control, self-reliance, all that sort of thing, runs deep in the American psyche. And putting a nice spin on insecurity, you can become an entrepreneur. You may not have a good, stable job, you may not have benefits, but you're an entrepreneur. And therefore, that gives it a glory that the reality of it is lacking. So did this economy come about to convenience workers,

to allow them to work autonomously and have flexible work schedules? Or behind this illusion of micro-entrepreneurship, is this an example of companies trying to take advantage of insecure workers who, because they're considered contractors instead of employees, are not guaranteed a minimum wage, health care, sick leave benefits, and are prohibited from unionizing. We asked Doug to describe the drivers that created this new economy. The early ventures in the Silicon Valley had a lot to do with coming out of the Great Recession. A lot of people who didn't have jobs or barely had jobs, a lot of insecurity around. That, I think, provided a ready labor force for the entrepreneurs who developed the sharing economy in its early days.

And, of course, then the iPhone was unleashed in, what, 2006, 2007. So that provided a technological basis for making connections that make the sharing economy possible. So I think the combination of the technology of the smartphone, smartphone, plus a large semi or unemployed labor force and growing precariousness among formerly middle-class people. But I think that was what provided a catalyst for the development of this. And then, of course, the venture capitalists got involved, and they tend to hurt a lot. So when one or two of these things become successful, they want to fund another 20 of them.

So I think all those things together really got it going. The technology, the pool of unemployed or under-employed labor, plus the willingness to finance on the part of the venture capitalists. So it seems like the sharing economy is both the solution to and the origin of less than full-time employment. Here's Dr. Keeley McBride's take. economy and also the context in which the sharing economy thrives. And that, in combination with the technological advances, it's sort of like this is, I think, a really important formation and reflection of what it means to live in 2015. Another key piece to understanding the context of the sharing economy is related to place. It's no accident that almost all of these companies were founded and have headquarters in the Bay Area. In their paper written in the

1990s, Richard Barbrook and Andy Cameron attributed this rise of networking technologies in Silicon Valley to what they called Californian ideology, which is a combination of hippie culture, neoliberalism, deregulation, and tech utopianism, all unique to California. Doug Henwood explains. A lot of what became the free market ideology of entrepreneurship in the 1980s has roots in hippie culture in the 70s and the Whole Earth Catalog, Stuart Brand. He went from being that kind of hippie

to being an apostle of entrepreneurship and self-reliance and high-tech culture. So there was that shift, and a lot of it centered in California, from hippiedom, which really had its own bit of self-reliance, but then it got all mixed up with the early tech culture in California in the 1980s that you could just develop some glorious machine in your garage or use one of those machines to develop a new way of doing business or whatever.

And that kind of technology plus self-reliance and a kind of attitude of revolution, we're going to overturn everything, overturn the existing order. And now you hear about it all the time with the venture capitalists who just love to disrupt everything.

They're all about disruption. And they often forget that that kind of disruption they're talking about is often somebody else's mode of existence. So we're seeing in the sharing economy, they talk about disrupting incumbent or legacy models like hotels, whether Airbnb or traditional cab driving with Uber and Lyft. with Airbnb or traditional cab driving with Uber and Lyft. But they're also undermining a lot of formally decent or half-decent jobs at the same time. So they celebrate the disruption and the innovation,

but often don't think of the consequences of who's being disrupted. So what is it about these companies that allows them to get so big and be so disruptive? Here's Keeley. What they're doing is they're capturing assets that are already in existence. So Airbnb has been able to scale up insanely quickly because they don't actually have to ever build any brick and mortar buildings like other hotel chains do. So they just need people to come to their platform and sign up. And what they just need people to come to their platform and sign up. And what they need to do is keep updating their platform and making sure it can handle the traffic and dealing with different issues as they arise and providing ways for hosts to connect and

really monitoring insurance issues. But Airbnb as a company does only a very small part of like what a hotel chain would do so that's why they're able to just expand as quickly as they've have yeah they don't have anyone anyone at the front desk they don't have anyone they're hiring to clean nope none of that yeah and and so that that was the a real aha moment for me when I started doing research on the sharing economy. And I'd actually, at the same time, been doing research on San Francisco and the tech industry and the way the tech industry has impacted the economy of San Francisco. So when I read that Uber, this was two years ago, when I read that Uber had been valued at $19 billion. Now it's over 50. I don't remember what the latest valuation was, but $19 billion, and they had fewer than 200

employees. And I thought, wow, this is the greatest wealth concentrating business model I've seen that's even more effective than finance, right? I mean, I'd kind of thought of finance and real estate as the pinnacle of wealth concentration, but the sharing economy trumps them. I mean, this notion of the sharing economy, I don't know who coined that phrase. I see money changing hands. I see middlemen taking fat cuts.

I don't see any sharing. It's just business. Call it whatever you want. It's just business. Call it whatever you want. It's just business. This is Dale Carlson. He worked on the Pacific Stock Exchange for over 12 years. Now he lives in San Francisco and works as a public accountant and business consultant. We asked him to tell us more about the business model of the sharing economy platforms.

asked him to tell us more about the business model of the sharing economy platforms. The general approach that a lot of these so-called sharing economy companies take is we're going to go out and get as big as we can as fast as we can. And we're going to ignore any laws or regulations or taxes that might apply to what we're doing. And we get to a certain size where we've got a devoted number of hosts or drivers in the case of Uber. We've got a devoted number of guests in the case of Airbnb or riders in the case of Uber. Those people will advocate for us, and those people will keep public officials from writing any new laws or regulations that might stifle our activity. Dale is intimately familiar with the sharing economy. He was the volunteer campaign manager of Proposition F, which was an initiative to

improve the regulation of short-term rentals, including those on Airbnb, that was defeated on the San Francisco ballot on November 3rd, 2015. Here's Dale with a little bit of context about the initiative and why he thinks it was so important. You know, it has always been a very expensive place to live. I think what's changed more than anything else is not only is it a very expensive place, it's hard to live here right now. If you're a tenant living in a rent-controlled unit, you live in absolute terror that you're going to come home from work and find an eviction notice pinned to your door. Because it doesn't mean you're being evicted from your home. Chances are you're being evicted from the city. Chances are you're not going to be able to find another place you can afford and remain in San Francisco. And it's particularly hard for people of low and moderate incomes. They're being forced out in increasing numbers, and it is changing

the complexion of the city. Not for the better. So can you describe Prop F and how it relates to these issues? Well, we put Proposition F on the ballot to deal with the proliferation of short-term residential rentals to tourists. We've lost, by our reckoning, somewhere between 10,000 and 12,000 units that have been illegally converted from residences for long-term occupants, long-term runners, to tourist accommodations. And these units are offered up by Airbnb and 60 other websites that are doing business in San Francisco. Tenants are being evicted, so landlords can rent units to tourists at a far higher rate.

Landlords are losing insurance coverage and mortgages when insurers and banks find out that, often without the landlord's knowledge, the units they own are being rented to tourists, sometimes by tenants. It's a significant problem. And we went to City Hall, we went to the Board of Supervisors, we went to the Mayor, we tried to find some reasonable set of regulations that would rein in this activity, and we weren't able to do so. City Hall instead opted to align itself with Airbnb, which doesn't want any regulatory responsibility and really doesn't want any controls at all on the activity because they're

making so much money. They make 12 to 15 percent commission on every booking. So in the face of not being able to get anything done at City Hall, in the face of independent experts looking at the existing law and saying this is never going to work and this is not enforceable because of this reason, this reason, and this reason, we put Proposition F on the ballot. And at its core, it did one thing that threatened Airbnb more than anything else, and that was to say, if somebody wants to rent an extra room in their house, or they want to rent the entire house while they're away for a little while, that's fine. They have to register with the city. They have to agree to collect and remit the hotel tax. That's fine. But Prop F said if the unit is not registered, Airbnb cannot list it, and neither can anybody else. It cannot be offered to tourists

as a short-term rental. As of this date, coming up on the end of December, we have 800 people registered. Airbnb has 7,900 hosts in San Francisco. That's just Airbnb. That's not HomeAway, VRBO, or the 60 other websites. That's just Airbnb. So Airbnb looked at that requirement and realized that 90% of their listings would be illegal and 90% of their business in San Francisco would go away. And that's why they fought so hard to defeat Proposition F. So what do you think of the argument that Prop F's restrictions and tougher enforcement mechanisms would hurt San Franciscans who are just trying to make ends meet? I mean, Airbnb in this campaign relied very heavily on those folks renting an extra room as a human shield, you know,

to hide what's truly going on with that company here. And they're taking the same approach in other cities all over the country, which is, you know, I am a little old lady and I rent the extra room to pay for my husband's medical expenses, to pay for my kid's college education, to cover my mortgage because my pension isn't sufficient. Those are very compelling stories. That's a third of their listings in San Francisco. That's a third of their listings in New York and Los Angeles and other cities around the country. Two-thirds of their listings are people who are doing this all the time with full units. They're running them as commercial operations. And in some cases, some of those people have 30, 40, 50 listings

or more. There was one guy in New York who had 242. If you're Airbnb, why would you allow that to go on? It's because that's where you're making your money. Somebody who's renting an extra room for 80 or 90 bucks a night, you're making 15% of that. Okay, that's nice, but I would rather make 15% off the guy who's renting the entire flat for $600 a night, $1,000 a night, or more. That's where their money is. You mentioned that there's already an existing law in place to regulate this industry. Can you explain what it is and why it's not working? The existing law in San Francisco says you can do a short-term rental in your primary residence and only your primary residence. Airbnb doesn't care if it's your primary residence or not.

The existing law says you have to be registered with the city. Airbnb doesn't care. The existing law says that any unit that has been built as an affordable housing unit with public dollars cannot be used as a short-term rental. If the unit has been subject to an Ellis Act eviction in the past five years, it can't be used as a short-term rental. Airbnb lists thousands of them. Property owners in San Francisco under the existing law are not required to provide written permission to tenants who want to do this. I can't tell you the number of landlords who called me in the course of the campaign saying, I've discovered that my tenants are doing this. And I've called Airbnb and told them, I need this to stop. I'm at risk. It's my liability. I need this to stop. Take down the

listing and cancel the bookings. And Airbnb says no. They don't even care if they have the residence permission. It's crazy. So they don't care if it's legal. They don't care if it's registered. They have the residence permission. It's crazy. So they don't care if it's legal. They don't care if it's registered. They don't care. They need to have a little skin in the regulatory game. They need to be responsible for what goes on on their platform. Airbnb could actually address this problem today.

This is San Francisco District Supervisor David Campos. By simply saying, you know what, we are only going to list units where the property owner or the property has registered with the city. They could end this problem. They could make this whole problem go away if they just said that. They haven't said that because they want to maximize profits. And so it is about corporate responsibility. At what point does a corporation that is making so much money, a corporation that is more valuable than the Hyatt and the Marriott combined, at what point do they have some responsibility in making sure that we're not losing housing. And I think that we are not saying no to this new economy, to the sharing economy. We're simply saying that the sharing economy

should be about sharing responsibility as well, not just maximizing profits. And that's the key here. What happened with Proposition F is that you had a failure on the part of the elected representatives of the city here at the Board of Supervisors and the mayor to actually put in place reasonable regulations of the short-term rental industry, Airbnb included. And so because of that failure, a broad coalition of folks felt, since our elected representatives are unwilling to do what is needed, we'll just ask the voters to do it. But whose responsibility is it to hold these corporations accountable?

Why can't the government do it? I mean, to be frank, I mean, the relationship that we've seen between Airbnb and city government until now has been that they have been running the show, that Airbnb has captured city government. And, you know, where we are right now is, you know, Prop F lost, but Prop F got 45% of the vote. And why is that significant? Because it got 45% against a campaign that was run by Airbnb that broke records in terms of the amount of money ever spent in a race, in a campaign in San Francisco. They broke records, spent more than $10 million. And even after spending all of that money, you know, this effort,

our campaign still got 45% of the vote. And quite frankly, we're going to use that as leverage as we go forward. We're going to try to do something to fix this issue once again at the Board of Supervisors. One of the things that happened in the election in November is that the composition of the Board of Supervisors switched, changed a little bit. We have now a progressive majority on the Board of Supervisors. And we're going to use that progressive majority to try to change the law at the Board of Supervisors. This is something that should be resolved legislatively, and we hope that happens. We asked Dale what it meant to move forward for him since Prop F was defeated. Well, you know, nobody likes to lose.

You know, that's never fun. You get involved in issues like this, and they don't end because a vote at the Board of Supervisors doesn't go your way. They don't end because a negotiating session with the mayor doesn't work out. They don't end with an election defeat. You know, these are struggles. These are not campaigns. These are struggles.

When's the struggle over? When you win. So we'll go back to the Board of Supervisors, and if it doesn't work, we'll go back to the ballot. If we lose, the issue is not going away. The problems are not going away. And the people who care about them are not going away. What's happening in San Francisco is a real soul-searching moment. There's a recognition that, in large part, because of the tech industry explosion here,

people can't afford to live here anymore. People are getting evicted. I think at this point, almost everyone knows someone who's been evicted. And so the question is, does Airbnb and Uber, does that allow middle class people who couldn't afford to live here the chance to stay? Or is this just an example of even greater wealth disparity? example of even greater wealth disparity. I mean, one of the things that you see is that middle class people are leaving San Francisco in droves. The people at the bottom of the spectrum are getting poor quite quickly. The people at the top end of the spectrum are getting wealthy really quickly too. So San Francisco has the fastest growing wage inequality in the country. And that's why I think the sharing economy thrives here. And it's not because it's allowing the middle class to survive, which is what Airbnb likes to argue.

situations, and you have a lot of people who have a pretty astonishing amount of disposable income, right? I mean, when you were growing up with your aunt or your parents or your grandparents thought, I want to pay someone else to go stand in line at the post office for me. No. So there's starting to be this whole new category of essentially servant that is really accessible and easy for people. And it implies no commitment or long-term relationship between the person contracting the service and the person providing the service. It's entirely impersonal. I'm really starting to think of it as the return of like pseudo aristaristocracy in some ways. People who just use their cell phones and order services and drivers and people that pick up their kids and do their cleaning. And in part, that's because we're living in a society that has such extreme wealth inequality.

San Francisco is one of the paradigmatic global cities that's emerged at this particular juncture in economic history. And I've started to understand that the sharing economy is only ever really going to thrive in places that Paducah, Kentucky, or even Airbnb. So to start to think about the particular geographies of this, and if you start to look at the cities that are fighting over how to regulate Airbnb, it's all global cities that are short in real estate, in part because real estate in these cities has become considered the safest investment. So we're starting to work on the geography of it, I think has helped me understand it being symptomatic of this moment in global capitalism, as opposed to a specific manifestation here in San Francisco. But like this moment in global capitalism, the structure is uneven. The problem is that there are places where there's too much money and there are places where there's very little money circulating at this point.

I was a TaskRabbit for a year or two, but I actually got off-boarded from TaskRabbit. But it wasn't working out anyway because I couldn't get paid. I wanted 20 bucks an hour for event work or any work, really. I found it really difficult to work for less than 20 bucks an hour for event work or any work, really. I found it really difficult to work for less than 20 bucks an hour. And a lot of people were just getting task rapid gigs by working for, you know, what seemed like below minimum wage. But that was just my perception. I don't know if that actually happened. That's not an accusation. But I guess that's supply and demand, right? But taking advantage of people is really not good for anyone. And if you do it enough, you create a principle where you're undervaluing people's time.

And really, I felt it was just disrespectful. It's disrespectful not to pay someone enough money to cover their bills for the day, you know, if they're working for a whole day for you. Yeah, there's actually a service in India that's called something like Red Pityan, so they make it really explicit over there. That's in India, where, I don't know, I guess people are ruder than they are. The Americans thought to be from this. But, yeah, the woman who started TaskRabbit, I remember the story. She came home one night after a day of work and was too lazy to call out for food or something

and said, wouldn't it be nice if I could just summon somebody to get food for me? It's like back in the 19th century when an aristocrat would ring a bell and summon his servant to bring him food. This is a high-tech way of doing that and democratizing it, I guess. So the people in the middle and upper middle class

can summon someone, blow them in a social ladder to do a task for them. And the founder of TaskRabbit used a lot of very nice language about neighborliness and sharing. This is one of the origins of the whole concept of the sharing economy. But in fact, you're looking for some desperate person who really has no stable employment to pay him a few bucks to come over and perform labor for you. There's no benefits, no assurance of stability, no assurance that they'll be at work tomorrow. It's just a very temporary servant relation. And there's nothing neighborly or sharing about it.

It's very anonymous, something you're never going to see again, probably. And there's really no sense of obligation, no sense of continuity. That has nothing to do with neighborliness or sharing, but it sounds nice that way. I don't know, it seems like a questioning of human relations to me. But are Tauskrabbit and GetMyPeon, which is what the app is called in India, new in this time in economic history? We asked Kili to give us a historical perspective of this type of work. At one point in the early industrial revolution, it began with piecework.

There was this idea that, well, you don't want women to work outside the home. So, and also factories who couldn't expand quickly enough to meet all their orders, they would just pass the pieces off to women and they would take them to their apartments and they would sew them off site and they would get paid per piece. I look at the sharing economy as something really similar to that, where we're not going to provide anything for you. Those women had to buy their own sewing machines. They had to maintain their sewing machines, transport the pieces to and from the factory themselves, right? So it's a way of offloading the risk and the capital needed

to maintain. And they're alone. They're working alone. Yes. In their houses. Yes. Eventually, people realized that they were getting less wages than they would if they were actually working in the factory. So there was a movement to push it back into the factory and regulate piecework. Before, it used to be like there was no minimum wage attached to it, right, because you just got paid per piece. Things like TaskRabbit, they're going straight back to that. Things like TaskRabbit, they're going straight back to that. The great innovation of capitalism was to sever people from their own means of production. If we look at whether it's farming, peasantry, even early America, where a lot of people grew their own food or had some sort of artisanal labor, blacksmiths or make soap makers or whatever. Then they got taken away from that means of production and ended up getting thrown into factory life, urban factory life. And that was, for a lot of people, a rude shock. They had gone from maybe not a glorious, prosperous existence,

but a certain degree of independence, then getting thrown into a factory life in personal, anonymous cities, and tried to get by. And then certainly with the growth of unions in the 1930s, the growth of a welfare state in the post-World War II years, there was a degree of insulation from the insecurity and anonymity of the factory life of the early 20th century that gave people broad growth in incomes,

broad prosperity for much of the population from roughly the early 50s into the mid-1970s. And then things started going badly awry in the mid-1970s. Things got less and less secure, and benefits got destroyed, and unions got broken. And that temporary period of broad prosperity and security ended, and since then it's been a huge polarization between the rich and everyone else. Another symptom of capitalism that you write about is that it encourages the move towards a commodification of everything as a way to get

ahead. Can you explain what you mean by this and how it relates to the sharing economy? Can you explain what you mean by this and how it relates to the sharing economy? Oh, yes, absolutely. It just leads to such distorted consciousness and such a terrible view of the world. The intensification of the capitalization of everything, the commodification of everything we've seen since the early 1980s, it's now pervasive that people just see everything as a commodity or a potential commodity. everything as a commodity or a potential commodity, and the commodifying nature to an unprecedented degree, and commodifying the air, the water, our emotional lives, our bedrooms. It's very depressing to think of that kind of monetization of social relations, the complete

monetization of social relations. We've been tending this way for centuries, and capitalism is many centuries old, and it's been just spreading that consciousness and that model into more and more areas of life. That pervasive commodification of everything has just become, to, I think, especially younger generations, is so normal now

that it's impossible to say, like, stop, there's something wrong with this. We're losing something. We're losing parts of our humanity by monetizing everything. And it's this so-called sharing economy, by commodifying sharing even, it's just a further brutalization of life. What this capitalization or commodification of everything looks like is looking around your life, searching for things that you can commodify

and capitalize off of, like renting out the parking space in front of your house on justpark.com or your dog on borrowmydoggy.com. Perhaps it's your extra bed on Airbnb. You can even rent out friendship for $10 an hour on rentafriend.com. This idea also connects to the rise of the precariat, people without security or predictability who, because they lack their own means of production, have to sell access to their things or their labor in the form of gigs in order to live. I asked Doug what he thought of the sharing economy creating a precarious class. Yeah, I think I'm a little uncomfortable with that term because it sort of overestimates the security that a lot of working-class people had in the past. There certainly has been an increase in insecurity, but sometimes the severity of that break is exaggerated.

Working-class jobs, going back decades, were no more secure than jobs are today. Benefits were rare. There was a tendency to normalize the period of the 1950s and 60s into the early 1970s when there were stable jobs with decent wages and good benefits. But that was really the exception in history. So in a lot of ways, we're just going back to the 19th and early 20th century model of the labor market. But that objection aside, there just really are a lot of people around who maybe expected more. Older cohorts expected more. Younger cohorts are maturing into a world

in which they expect basically nothing one of the big solutions is to have a better social welfare system, something closer to what the United States had in the 1950s and 60s, or maybe even something like a guaranteed minimum income, where anyone making below a certain amount receives an income up to the minimum level, or something like a universal basic income, where citizens receive an unconditional sum of money. Having a decent welfare state would make it in some ways easier for people to be entrepreneurs. If you knew that your health care was paid for, you might take an economic risk that you wouldn't otherwise.

So it's the social democracies of Scandinavia that Americans like to make fun of sometimes. Actually, they're extremely innovative. extremely innovative. It's because so much of the risks of economic life are insulated against by the provision of a decent welfare state that people can take entrepreneurial risks. So the American way of doing things in which basically nothing is provided for you and you're just entirely cast in your own resources doesn't actually serve entrepreneurship necessarily the way some of the professional ideologues would have you believe. I would say that being able to have a really decent framework of social welfare being provided for,

that would make it a lot easier for people to take adventures in life. to take adventures in life. If you had a basic income, that would also make it impossible for ruthless cost-cutters to impose their model on everyone. That's like, if they started driving wages down so low that it went below the basic income,

that would make it very hard to get workers in. So having some sort of floor under living standards, broad floor under living standards, broad floor under living standards, would also make it better for these kinds of Uber models. They just couldn't cut the wage below a certain subsistence level because people wouldn't have to be forced to take whatever was on offer. They would have other choices. And that would also make for a less brutal society than the one we live in. I see kind of the sharing economy as a band-aid that's emerged at this time. Workers are bleeding.

People are really suffering. And they're trying to figure out how to make ends meet. But what we need is a political answer to this, not an individual one. One of the political answers that Keeley is referring to is called the solidarity economy, or what some people call the true sharing economy. While the sharing economy is based on individual ownership, individual risk, and large corporate benefit, solidarity initiatives are based on shared ownership,

shared benefits, as well as shared risks. This economy includes worker cooperatives, housing cooperatives, community gardens, food co-ops, and renewable energy co-ops. This economy also, just like the sharing economy, emerged out of economic crisis. Although notions of this economy date back further, the contemporary concept of the solidarity economy can be traced to Latin America in the 1980s, when neoliberal economic policies caused significant economic dislocation and communities had to innovate and work together in order to find new ways to cope. We asked Keeley what she thought about the solidarity economy as an alternative. The sharing economy functions in such a way as you can share without having any sort of

interpersonal connection. And I would argue that the real strength of the conception of the solidarity economy is it's about connection. And this is another thing that I think is so important at this particular juncture. You have people for a long time, and when I was young, I used to think, oh, this is so oppressive. A corporation starts to own you. They take you on vacations, and you become a company person, you know, originally was a company man, but now you can also become a company woman where everything you do is identified with that corporation. And now I think, oh, how quaint and how sweet that would be, because at this point, more and more people's work is so disconnected from any sort of corporate umbrella, from any union, you know, so the nature of employment has become so increasingly alienated.

That that's one of the things I think is really, really important about the solidarity economy is that it's not about maximizing productivity or it's really about understanding that economic relations are embedded in social relations and reestablishing that link. And the social relations that the sharing economy reflect are ones of extreme alienation and absolute lack of interpersonal connection. That's why it's so easy for people. But that's why, in the end, it's a reflection of soullessness rather than the answer to the increased alienation of labor. So what would a solidarity economy alternative look like in practice? I recently met someone in San Francisco who was trying to have a worker-owned version of Uber. Why can't we have our own platform? At this point, Uber drivers give 20% of their receipts to Uber.

Why not have workers pay 5% in order to keep the platform going, and then they get to keep 95% of their wages? And the idea would be that the platform would be a nonprofit. If there was any excess generated through the platform, that it would be distributed to the drivers. So there's hope that particularly in a place like San Francisco, where people pride themselves on being more progressive, that if they can get the word out that here's the worker-owned Uber, people would rather get a ride with them. And their assumption is that, of course, all the drivers would rather drive for them as well. Co-op cab alternatives can already be seen around the United States. There's Union Taxi and Green Taxi in Denver and Union Cab of Madison in Wisconsin, to name a few. But what about the other companies like Airbnb? Janelle Orsi of the Sustainable Economies Law Center described how to

transition online companies into cooperatives in an article titled, Three Ways to Put Tech Platforms into the Commons. Here's what she wrote. Quote, CoB&B, as I'm calling it, could be an online marketplace owned and democratically controlled by the people who rent space to travelers. You can call it a freelancer-owned cooperative. space to travelers. You can call it a freelancer-owned cooperative. Soon, 40% of the U.S. workforce will consist of freelancers, many of whom will cobble together income from multiple sources. We can't allow companies like Airbnb, Uber, and TaskRabbit to take 5 to 20% of freelancer earnings. If those companies remain the gatekeepers of critical work opportunities, So why hasn't this happened on a larger scale already?

What's preventing the move to out-cooperate these companies, or better yet, to turn them into cooperatives? Marx argued that one of the things that was going to happen through having collective work sites is that workers would develop a collective consciousness. Rather than viewing each other as competition, they would start to form an affiliation with one another and understand that other workers were in a similar situation. So one of the things that happens with the sharing economy is that people who can't pay their bills, there was a study that just came out, actually Uber released it, interestingly enough, that most Uber drivers have other jobs. But clearly those other jobs don't give them clear working hours or sufficient wages in order to make ends meet. So they're looking at this as

an individual problem. And so they say, okay, well, I guess if I drive three hours for Uber in the morning or the afternoon when I haven't been scheduled and I can just decide at the moment that now I've got this time and I'll sign up to drive, that becomes a kind of enabling device that matches the precarious part-time work that they're being subject to. That employers can ask people to come in and then send them home. They can decide the night before, oh, we just cut that shift, sorry. Or they can say, you need to be available anytime from 9 a.m. until 9 p.m. And we'll let you know at 9 a.m. when we actually want you to come. So it's already a weakening of labor's relationship with capital that you're seeing in the structure of work. The sharing economy presents itself as, here's the answer.

Here's the empowerment of the worker. You get to set your own time. You get to decide how much you want to earn. But in a sense, it's just, it's not the answer to it. It's a further symptom, right? So now those workers can drive for Uber and they can have another insecure job without benefits to match their other job.

And it's hailed as the freedom of the worker. As long as we only think about individual solutions, like, oh, I'll just work over the weekend to keep my boss happy, or, oh, I'll just work over the weekend to keep my boss happy, or, oh, I'll just drive Uber for 20 hours a week on top of my other part-time job, then we'll never get anywhere. It's the collective solutions that need to happen.

And just like feminism had the personal is political, we need to have the economic is political. It's not personal, right? You experience it as a personal. You're the one that says, oh, I can't pay that bill. Oh, I can't pay my mortgage or my rent. So you feel it's personal, right? But there needs to be a kind of fight back against the market as something that no one can do anything about. And so I would argue what we need is something kind of akin to like a worldwide labor movement again.

One of the effects of neoliberalism over the last 30, 35 years has been to erode people's sense of political possibility. They tend to think in very individualized terms. And even their sense of doing good gets very individualized. It's just whatever consumption choices they make. You can see this with a lot of environmental things, for example. If you buy the right products or recycle or do these sorts of things, they will help, no doubt about it.

But what we really need to avoid environmental catastrophe is really large-scale efforts to come up with cleaner forms of energy and less destructive and wasteful ways of manufacturing and distributing commodities. Individual behavior is not going to do too much to change that, but people don't always think in those terms. They tend not to think about how we can get together in large groupings politically, as parties or organizations or whatever. They tend to think of smaller-scale individual actions, but we need to get beyond that and go against this neoliberal trend in which we're all just lowly individuals in this world making choices and think about more solidaristic models of organization and action.

That's what people need to think, rather than just what kind of good choices they can make when they shop. Theodore Adorno said, wrong life cannot be lived rightly. It's hard to do these things on your own as individuals. And in some places, if you need to get from point A to point B, sometimes you have no choice but to use an Uber. Or if you want to go on vacation, you might find it impossible to afford one without using Airbnb. Or if you are desperate for a little money and you might want to rent out your spare bedroom or your spare couch or whatever. So I wouldn't say that individuals who use these

things are being immoral or wrong. These are political questions. We need to have organizations like unions and cooperatives and then government regulation. We talked earlier about the benefits of a broader welfare state, of a universal basic income. These things are all political interventions that are going to make life better and more just and more stable and less brutal. But I don't really think that individuals on their own can do much to change things. We really need to get together on a collective level to change these things at the political realm and not just think that individual behavior

can change much of anything. I actually joke that I'm a servant sometimes, but it's because I work in the service industry. So maybe I am a servant. maybe I am a servant. But the second I see myself as a servant to rich people, or the 1%, I'm never going to define myself by that. I think it's going to take rich people calling us servants to really realize that that is poverty. That existing in this false sense of middle classness is success because it's false. If you have a ton of stress and you're only making enough money to pay your bills, you're dying a little bit more than a person with less stress every day. And that's no way to live. And that's no way to treat people. So you have a very macro level understanding of all of this stuff.

I'm wondering, like, what do you do with this energy, these emotions? I don't know. Clearly not enough because I'm, like, getting emotional right now. So if I had an outlet for them them I could talk about it without tearing up you know I'm wondering how did it feel to do this interview well it certainly went a lot deeper than I expected it to go but I shouldn't be surprised because I'm quick to just be myself and get vulnerable and say what I think. So it's fun to talk about the stuff that seems to really matter.

Oh, the reason I drive nights and weekends is because, well, the reason I drive nights is because there are just way less things to hit. There are less buses, there's less people crossing the street, there's less bicycles, there's less other drivers driving really badly. There's still the same percentage of people driving really badly. There's just less people driving. So less people driving badly. We've been in the car with David Corman. Lift sticker on the dash. The pink light-up mustache.

Tucked away. Thank you. That was a wild ride. Thank you for listening to Upstream. To check out more episodes, interviews, resources and events, please visit www.economicsfortransition.org. Thanks for listening. If you like what you heard and want to support this project, please visit economicsfortransition.org to contribute to our current fundraising campaign. Thank you.