The sharing economy is about much more than making money

Alex Stephany certainly knows his subject - the rapidly expanding global market for idle assets - but there's more to it than his book allows, says Benita Matofska

by Benita Matofska
Last Updated: 26 Nov 2015

From Lyft's billion-dollar moustaches to selling empty seats on private jets, in The Business of Sharing, Just Park CEO Alex Stephany takes us on a remarkable journey through the sharing economy, from the kibbutz to Sandhill Road in Silicon Valley via an artists 'dream studio' in NYC.

But this is no airbrushed version of the sharing economy. Stephany wants the reader to experience the half-mouldy pancakes, the congealed pizza and, unfortunately, barfing in the bedroom. Even as a sharing economy evangelist, that particular accommodation offering had little appeal for me.

I'd say that The Business of Sharing is one of the most comprehensive books I've read on the subject and, believe me, I've read them all. But before I shout 'Sharetastic, Alex! You've done the sharing economy proud,' I have to point out the book's only flaw.

Sensibly, Stephany starts with a definition: 'The sharing economy is the value in taking underused assets and making them accessible online to a community leading to a reduced need for ownership of those assets.' Or, as he likes to put it, 'getting slack to the pack'.

Therein lies the flaw of the book. If the sharing economy's value lies only in getting 'slack to the pack' via the internet, this very definition leaves out all the social and environmental capital generated by sharing and collaborative activities the world over.

Stephany explains that, in his version of the sharing economy, only profit-making businesses qualify - the book is, after all, about business. While he sees Macmillan's Team Up, a task-sharing platform that connects volunteers to run errands for people living with cancer, as 'a great philanthropic initiative', he'd dismiss it over a business marketplace such as Task Rabbit, where people get paid for doing errands.

For me, this misses the point. My company Compare and Share worked with Macmillan Cancer Support to build Team Up. Macmillan is one of the UK's largest charities and generates millions in revenue. If we're defining a business by its contribution to the economy, then these charitable monoliths shouldn't be overlooked.

And some businesses in the sharing economy are not about 'getting slack to the pack' at all, but bringing people together. Take Tablecrowd, which connects strangers to share a meal (for a fee) in a restaurant. There's no 'slack' in Tablecrowd, yet it's a business based on people sharing time and food with one another.

And what of crowdfunding? Where's the slack there? I'd say it democratises finance, helps start-ups get access to capital, validates ideas and attracts a network of champions, but it's hard to argue that's really about idle capacity.

Despite this very narrow definition, the book does look at different models such as open source and partnering with corporates: think crowdsourcing deliveries with Walmart and tool-rental services with Home Depot, the US's answer to B&Q.

Stephany takes us on a colourful journey through this brave new economy. He introduces us to marketplace veteran VCs such as Fred Wilson, social entrepreneurs such as Adam Werbach (founder of gifting platform Yerdle) and top academic Arun Sundararajan of NYU Stern business school fame. He tells us of the triumphs of overturning outdated regulations, referring to a particular JustPark coup in 2014, which resulted in abolishing an antiquated law so homeowners could rent out parking spaces without planning permission. And he explores whether sharing economy companies can go as mainstream as McDonald's and 'lose their humanity in standardisation'.

Sharing, he warns, won't be without casualties. While some social value is created, some of it also gets destroyed. The sharing economy takes acts previously done for free and puts a price on them. The consequence? Fewer families will give old clothes to charity, when they could make a few quid selling them. I am not convinced and the research agrees. As we elevate the status of sharing, making it 'cool' or 'smart' to buy pre-owned goods and make the best use of our idle assets, the pie gets bigger. The old adage 'the more you share, the more you have' rings true. More people have an experience of sharing, more of us feel connected to a wider community - and the contagion spreads. To share is to be human and there's plenty of sharing going on without a single penny being exchanged.

Benita Matofska is the author of the What We Know About the Global Sharing Economy report and founder of Compare and Share

The Business of Sharing: Making it in the New Sharing Economy by Alex Stephany is published by Palgrave Macmillan at £16.99.

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