Excerpt from The Sydney Morning Herald – Not So Caring: The Lie of the Sharing Economy

Read the complete article at The Age

“…Now New York academic and author Douglas Rushkoff’s forthcoming book Throwing Rocks at the Google Bus makes a related argument. He argues today’s tech titans might market themselves in a friendlier way, but they are doing the same thing Wall Street has always done best: extracting value for their investors.

Rushkoff argues there’s nothing “disruptive” about a start-up that finds a better way to monopolise a market then returns most of its vast growth to a few rich investors.

Last week, I asked him for his view of Uber.

“Today, a company can artificially disrupt an industry by using cash to make up for the inefficiencies of the business plan. If Uber has a big enough war chest, it can disrupt the taxi business by taking a loss on rides for several years. It does that to drive everyone else out of business and establish its monopoly. Is that disruption? Sure. It’s not a creative sort, because it does not have a sustainable marketplace on the other end. It’s just destructive destruction. Like what Amazon did to the book industry.

“So Uber can establish a monopoly in a taxi market without worrying about the long-term health of that market. It’s OK if the drivers can’t make a living, or the traffic patterns won’t work, or the roads break down, or people with special needs can’t get transportation. It’s OK because Uber doesn’t need the taxi market to stay viable; it simply needs a monopoly in order to leverage over to something else, like logistics, drone delivery, or robotic driving.

“Most of Uber’s drivers can’t make a living as an Uber driver. While taxi drivers and limo drivers could recoup enough money to keep themselves and their families alive, Uber drivers are not paid enough to do that. The platform keeps the money.” And then lists on the stock exchange, making its founders unimaginably rich.

But aren’t unemployed people now able to drive for Uber, or rent out the spare room to earn money? Yes, he says, but not in a sustainable way. The money, once the platform has taken its cut, is rarely enough to live on.

“It’s not some new form of evil or anything. It’s just simple, extractive economics – but now it’s occurring on a bigger scale and at a faster rate,” Rushkoff said.

This is what disruption looks like, and the winners and losers are only beginning to emerge.  It could spark a fundamental restructuring of the social contract.

Our new(ish) Prime Minister began his so-far, so-exciting term lecturing voters that “disruption driven by technology … is our friend”, introducing the term to the political mainstream in the determinedly sunny way a mother might present the new baby to her firstborn. Is it, though? – you can almost hear the older sibling think. Or is it the end of life as I know it?

A question yet to be addressed is whether the march of technology, under the guise of making our lives easier, freer, more connected, is actually beginning to wipe out secure livelihoods for the masses, and concentrating wealth in a new tech elite. It would not need to be this way, Rushkoff argues. His answer is to shift the digital economy away from extractive models to distributive ones. The cycle couriers could own the takeaway food despatch platform, say.

If you are wondering how much luck Professor Rushkoff is having in making this case in a country that thinks a healthcare safety net is a socialist abomination, I was too.

“Well, it takes more than a few minutes to completely unwind from the economic rule set we’ve been using for the past 500 years,” he said.

“I’m all for disruption. Let’s disrupt Facebook’s monopoly of social networks, or Google’s monopoly on search. Let’s disrupt Uber’s extractive monopoly platform with a driver-owned app that does the same thing.”

That really would be a sharing economy.

Read more: http://www.theage.com.au/comment/not-so-caring-the-lie-of-the-sharing-economy-20160408-go1lx7.html#ixzz46CE0l58E
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