Arun Sundararajan
The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism
Cambridge: MIT Press, 2016, 240 pp.
Arun Sundararajan’s The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism focuses on a new “sharing economy” that is defined in relation to sharing behaviors (such as renting a room in one’s house), self-employment, and community-based exchange mediated by digital platforms that extend individuals’ economic communities far beyond their family and friends. Throughout, Sundarajan contextualizes recent discussions about the future of labor by examining changes in work brought about by new platforms such as Uber and AirBNB. Like similar contributions to the end-of-work genre such as Martin Ford’s Rise of the Robots and Erik Brynjolfsson and Andrew McAfee’s The Second Machine Age, The Sharing Economy is an accessible read that presents a future in which technological change has the potential to influence the way we think about and perform work. However, unlike Ford, Brynjolfsson and McAfee, Sundarajan focuses not on how artificial intelligence and other technologies will replace human labor but on how new technologies allow people to rent out their capital (e.g., an asset such as a car or their own working hours) to a variety of individuals rather than selling their labor to a single employer as in the traditional labor model.
In tracing the history of the sharing economy, Sundarajan is quick to contextualize technological advances in relation to decreased job security and skepticism that the ideals of the sharing economy mean little in relation to firms’ duties to shareholders, especially considering the interest venture capital firms have taken in the sharing economy (with, for example, Uber raising over $8 billion in funding by the end of 2015). Indeed, Sundarajan’s term “crowd-based capitalism,” which he puts forward as a more accurate term than “sharing economy,” is defined in relation to the creation of markets and new opportunities for capital, with sharing only implicitly referenced in relation to the shift from centralized institutions to decentralized networks or crowds that facilitate peer to peer exchange. Within crowd-based capitalism, Sundarajan is careful to acknowledge a range of models, such that TimesFree, a babysitting app that allows users to trade childcare services, can be seen to be more in line with gift economies than, for example, TaskRabbit, which matches laborers with jobs. Elsewhere, he provides an analytic framework that can be used to evaluate whether platforms are hierarchy-like (meaning that organizations directly employ and organize individuals in order to produce goods), market-like (meaning that individuals buy and sell from other individuals, investing their own time and money), or hybrid. This and other other frameworks for categorizing platforms are among The Sharing Economy’s most useful aspects, as it provides researchers with valuable tools for segmenting and comparing platforms in future studies.
One of the advantages to focusing on analytic frameworks for thinking about platforms is the breadth of examples that Sundarajan is able discuss, with readers introduced to new ways to think about sharing services, many of which they are likely to have never heard of or considered in the context of crowd-based capitalism (e.g., La Ruche Qui Dit Oui, a French company that helps match local farmers with buyers, or Luxe, a personal parking valet). When the book does draw on focused, qualitative data, it is often not to look at specific platforms but to describe the broader motivations and shifts within the sharing economy. A particularly memorable example is Sundarajan’s description of the 2015 OuiShare Fest in Paris, an event depicted as in the process of shifting from its 2010 potlucks-and-Birkenstock roots toward an atmosphere of executives-and-high-heels, a pattern that Sundarajan associates with the tensions between the ideals of sharing and the reality of needing venture capital to launch a new product or service. Indeed, in addition the breadth of platforms considered, one of the strengths of The Sharing Economy is its engagement with developments in Europe, a region with distinct platforms and attitudes toward labor.
As it moves from a first half that looks to developments leading to the emergence of crowd-based capitalism to a second half that addresses potential consequences, The Sharing Economy presents a high level of nuance. A chapter on the economic impacts of crowd-based capitalism, for example, digs into the challenges of measuring economic health using aggregate measures such as GDP or quantifying the affective benefits (such as meeting new people from around the world or engaging in conversation with locals that one might otherwise never meet) that individuals receive from engaging in peer-to-peer sharing. Similarly, chapters on the future of work raise questions about how to measure not just the number of jobs but also their quality—as Sundarajan points out, a full-time job with a long commute may ultimately be less desirable than two part-time jobs performed at home. Other lingering questions concern the portability of benefits and other aspects of employment such as measures of performance and trust.
Concluding the book, Sundarajan notes several implications of crowd-based capitalism. Regarding the economy, Sundarajan predicts that crowd-based capitalism will increase the impact of capital, offer greater varieties of consumption (thereby increasing consumption as products and services are better tailored to needs), and democratize economic opportunity, as more people are able to profit from small-scale capital investments. In this last point, Sundarajan disagrees with more pessimistic perspectives on the future of work, which often envision increasing inequality. Whereas Erik Brynjolfsson and Andrew McAfee’s The Second Machine Age, for example, predicts a rough road ahead for workers without special skills, Sundarajan sees these individuals as potential small-scale business owners who can acquire and rent out capital from which they also benefit. Put forward in relation to Thomas Piketty’s Capital in the 21st Century, the argument is that a greater portion of the population can enjoy the higher returns of capital investment rather than just selling their labor.
Despite Sundarjan’s careful contextualization of the sharing economy, his argument about its universal benefits is difficult to buy, especially when considered in relation to platforms like Fiverr (which allow workers to offer services such as copy-editing and design, usually priced at five dollars) that do not involve capital ownership but only the selling of labor. Individuals who sell their own labor lack access to the higher returns on capital referenced by Picketty and are also threatened by the automation of work by artificial intelligence and robots. Indeed, a distinction among platforms that Sundarajan does not make is between those that sell access to underutilized capital such as vacation homes, camera equipment, and luxury watches and those that see individuals’ labor potential (e.g., as a house cleaner or errand runner) as underutilized. Such a distinction seems highly relevant to discussions of the future of employment and economic equality. While one of the advantages of The Sharing Economy is the detailed attention it pays to the specifics of platforms as drivers of labor change, the potential negative consequences of these platforms to human workers are ultimately underemphasized, as it becomes clear that not everyone will benefit from the changes Sundarajan discusses.