Corporate wolves and the sharing economy

© Igor Zakowski – Fotolia

The new sharing economy masquerades as a people-to-people economy. That sounds friendlier than the corporate, profit-driven economy. Take a second look, thought, and this new sharing economy turns out to be the old corporate wolf in a new internet fleece.

Take “ride-sharing.” Drivers use their own cars and set their own hours. A smart phone app connects them with riders and collects fares. Riders get real-time tracking and credit card convenience. In theory, Uber (and Lyft and others) help drivers make money and give quicker, better service to people who need a ride. What’s not to like?

Writing in the Jacobin magazine, Avi Ascher Schapiro reports that Uber has slashed fares by more than half in Los Angeles, cutting the amount that drivers make from a living wage to barely minimum wage. Uber told Schapiro that drivers are actually making more at $1.10 per mile than they did at $2.75 a mile. Drivers say that’s not true.

What’s happening in the Twin Cities? Just three months ago, Uber listed a $1.67 pick-up charge and $1.90 per mile as the basic rate. By September 26, the pick-up charge had been slashed to 60 cents and the basic mileage rate was down to $1.65.

Schapiro concludes that all the talk about driver-partners is just “empty spin.” Uber gets to make the decisions about how much to charge and how much of the fare drivers get to keep.

“]D\rivers aren’t partners — they are laborers exploited by their company. They have no say in business decisions and can be fired at any time. Instead of paying its employees a wage, Uber just pockets a portion of their earnings. Drivers take all the risks and front all the costs — the car, the gas, the insurance — yet it is executives and investors who get rich.”

Uber is a corporate giant, valued at somewhere between $6 billion and $18 billion. TechCrunch values AirBnB, another sharing economy leader, at $10 billion. All those billions sound a long way from person-to-person sharing. The “sharing economy” talk reminds me of Sam the Sham singing in “Li’l Red Riding Hood,”

I’m gonna keep my sheep suit on
Until I’m sure that you’ve been shown
That I can be trusted walking with you alone….
You’re everything that a big bad wolf could want.

Uber or AirBnB may still be a good deal for some drivers and some customers. WalMart offers low-price bargains to consumers, too. But let’s not kid ourselves — the business models are all about control by and profit for corporations, and there’s nothing new about that.