The Sharing Economy Needs Transparency and a Truthful Name.

Hiring someone to drive isn’t collaboration. It’s a job.

Fueled by venture-backed startups, the misleadingly labeled “sharing ” or “collaborative consumption” economy has blossomed into thousands of two-sided marketplaces, including one with an enormous valuation.

Not much information

No one knows the size of local P2P marketplaces in the US. The most referenced estimate was $110 billion by Rachel Botsman in 2011, and that was before the eruption of activity over the past three years. There’s no question more and more people are deriving income by providing services through these marketplaces.

It’s far easier to find information on Lyft’s ($82.5 million to date, with another $150 million on the way) or Uber’s VC funding ($307 million) than reliable data on what their drivers are making.

As private companies, they aren’t required to make their payouts public. It’s another reason why the “sharing” moniker rings hollow.

How much are contractors really making?

Postmates’ application page claims their couriers can “earn up to $30/hour,” but most of the reviews on Glassdoor place earnings near or less than minimum wage.

To Lyft’s credit, while earnings data isn’t publicly available, they give drivers seemingly data-driven hourly earning estimates within the driver portal.

While $15-20 per hour isn’t amazing money (especially in SF), it’s better than many jobs and well above minimum wage. Dropping the $35/hour marketing spin and in favor of showing what drivers typically make per hour by metro area would better serve drivers (both current and prospective) by aligning expectations.

It’s an economy, but not a “sharing” economy

Overall, these marketplaces are a good thing; they allow people to earn money from things they own/rent or services provided. But the labeling is all wrong.

There’s a pervasive effort to portray the independent contractors in these marketplaces as altruistic community-builders, rather than people motivated by a need to make a living (for more on this, read Tom Slee’s excellent piece for Jacobin or Andrew Leonard’s for Salon). If bike messengers are delivering packages for pure karma and sense of adventure, then why worry whether they’re earning minimum wage?

The answer, naturally, is that money is primary motivation for the contractors. Good vibrations are awesome, but they won’t buy beer.

Renting a room from someone is not “sharing.”
Hiring someone to drive is not “collaboration.”
They’re transactions.

These transactions are increasingly important for the US economy and the contractors relying on them. By 2020, 40% of the US workforce will be contractors. Unless trends reverse, many of these hundred million+ US contractors will generate some (if not most) of their income from peer-to-peer marketplaces. It’s a good thing if they can make ends meet.

What’s needed is actual sharing and collaboration

Unlike employees that work in a traditional office, there’s no water cooler for contractors to gather around. There’s no contractor directory or trade group. Few local P2P contractors add their work to their LinkedIn profiles (but some do). By in large, it’s hard to know who’s working for local P2P marketplaces.

Where there are forums, such as Lyft’s Driver Lounge, they’re controlled by the marketplaces. Indeed, one things that has made Lyft so successful is there ability to keep interaction tightly confined to their platform.

The contractors that power the collaborative consumption economy need to collaborate outside of the marketplace to improve the relationships they have with companies they work for.

Sharing and collaboration are wonderful things after all.


Do you earn money from a local P2P marketplace?
If so, what’s your experience?
Please leave a comment. I’d love to get a discussion going.

4 replies
    • Ras McCurdie
      Ras McCurdie says:

      We appreciate your readership Bill. Let us know if you would like for us to cover anything in particular in the future.

      Reply

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