Posted on August 1, 2017
There’s bound to be trouble when the word “friend” has become a verb.
Some people quiver at the sight of a dog. Others sleep with a light on or cower at the sound of thunder. For me, the ultimate dread has always been potluck suppers and all those murky casseroles of unknown provenance.
If the experts are correct, my future is grimmer than I had thought. That’s because the sharing economy that has taken the world by storm very much resembles a global potluck supper. A tech company sets up a trestle table and everyone gathers around to pop open their Tupperware containers.
The casual embrace of collaborative commerce has been sudden and swift, probably because it’s an economic extension of the broader, technology-driven social trend toward sharing. Social media has unleashed the age of faux familiarity and diminished the boundaries we once used to stratify our personal relationships. The word “friend” has become a verb—and an increasingly meaningless one at that.
Only a few years ago, we were warned to never accept rides from strangers, and never meet privately with people we knew only from the Internet. Now, we’re paying for the privilege of doing both.
Still, according to experts, there’s a lot more of this ahead.
As mobile digital technology propels us away from the traditional model where corporations accumulate resources and produce goods and services, we move toward a more deconstructed model. The platforms that support digital commerce may still be large companies, but they increasingly draw resources from a widely distributed and diverse crowd.
Sharing economies allow these individuals and groups to make money directly from their underutilized assets. As a result, we increasingly have an economy where physical assets are being shared as services. Put another way, people no longer need to accumulate things they don’t want. Instead, they can literally tap into a stream of services that the things provide.
For example, you want a hole in your wall, but you don’t own a power drill and you don’t want to own a power drill. Until fairly recently, the transaction cost of hiring a handy man or owing your brother-in-law
a favour, was higher than the cost of buying a drill. In the sharing economy, however, excess capacity—whether a good or
a service—can be monetized. A stranger can come over with a drill and do the job in their spare time for a fraction of the cost, or trade that service for another item or service.
Just as businesses like eBay and Amazon allow anyone to become
a retailer, the sharing economy and the abundant apps that now support it, can transform individuals into taxis, food delivery services or boutique hotels as and when it suits them.
However deep your aversion to the principle of potluck commerce, it’s tough to argue against the economic ef ciency of such a crystalline form of capitalism and its majestic balance of supply and demand.
That said, there are daunting challenges ahead.
Corporations, regulators and all levels of government have been left scrambling to catch up and to offset the revenue that is now leaking out of their clutches. For investors, that’s a red ag: There’s always heightened risk when regulation and process follow the creation of a market. The introduction of taxes, insurance requirements, labour codes and other operating standards invariably skew the business model by adding costs in ways that may not have been anticipated.
And that has a direct impact on the competitiveness of new and old paradigms.
For those who love a potluck supper, a big part of the charm is the variety and the element of surprise. Who knew that tomato juice could be turned into Jell-O?
But even potlucks are not immune to the sudden intervention of provincial health- care of cials. After at least one death and several cases of serious food poisoning, they were banned in some jurisdictions.
In others, like Manitoba, they must now adhere to the Community Dinner Guidelines published by public health officials.
We’ve all become hooked on the drama and the chronic upheaval that comes with perpetual technological innovation. And that suggests that as compelling as the sharing economy may be, the pendulum will eventually swing back to privacy and exclusivity.
As the sharing economy matures, it’s likely to be a lot less rowdy and a lot more regulated. But then again, no one will get sick from eating a bad devilled egg either.