In today’s economy, the most sought-after real estate is your phone screen. Our economy is rapidly transforming into a shared economy where assets are rented or borrowed rather than owned. Many modern tech companies are essential to the shared economy movement. On the surface, this movement is seen as representing a more collaborative society and being focused on improving quality of life. For companies like Uber, Spotify, and Facebook to be profitable, all they have to do is obtain space on your screen. While these companies may improve our lives on the individual level, we must question what impact they have on society as a whole. As the nature of our economy evolves, we must occasionally stop and ask: who wins and who loses because of each change?
Facebook is the prime example to illustrate just how valuable space is for an app. Facebook has a higher valuation than Amazon, JP Morgan Chase & Co., and Chevron, yet it produces no content. It is dependent upon its users to create the content. In many ways, Facebook gives us the illusion that we have some control. We don’t pay to use Facebook, which makes it easy to feel like we are not contributing to the greater capitalist system each time we log in to check our news feed. In reality, Facebook is just another corporation fulfilling a need. The site capitalizes on our use of its platform to communicate and generates revenue by flooding the website with advertisements.
As college students, many of us try to seek the cheapest option, so naturally we are excited by the possibilities of a more robust sharing economy. Uber, for example, is cheap and convenient but we need to ask why. What is it about Uber that allows them to offer low-cost transportation? Uber has achieved exceptional profitability by minimizing risk. Uber is just the middleman. It is a driving company, yet it does not own any cars. Uber doesn’t pay overtime or medical leave, nor does it cover the cost of car insurance or gas. The car insurance, toll fees, car payments, and other factors associated with driving for Uber can take away up to half of a driver’s income. All that Uber pays for is the R&D and advertising necessary to attract your business. By claiming that its drivers are just contractors, Uber doesn’t have to give them the same rights as employees. Uber gives these “contractors” iPhones enabling them to do their job, yet shies away from the responsibility that comes with being an employer. This begs the question: how much of Uber’s success is due to its efficiency? And how much is due to its exploitation? Uber is expected to generate $10 billion in revenue this year, yet it allegedly employs no drivers. Uber offers just a glimpse of the new frontier in the struggle for worker’s rights, and I fear that many of us are on the wrong side. We support Uber almost blindly, ignoring the fact that it is bypassing all of the workers’ rights legislation that has been passed in the past century by labeling drivers as contractors. Many of us claim to be conscious when it comes to social activism, but what are we doing?
Spotify and similar companies have changed the face of the music industry. You may come across some eccentric people who have comprehensive CD collections or an odd compilation of vinyl, but they are few and far between. Spotify streams music for free or makes it available to download for a monthly fee, but it doesn’t own any music. Artists make somewhere between $.30 and $1.00 per CD sold depending upon the royalty deal that they have negotiated. In contrast, artists make approximately $.00029 per play on Spotify. Of course artists make money in other ways, but this displays a significant shift in how musicians make money. Musicians are now forced to try to make money by selling themselves, not their music. T-shirts and merchandise generate significantly more revenue for artists than music sales. If artists relied solely on revenue generated from Spotify, they would need to have their songs streamed 4,053,110 times per month just to make minimum wage. It is no wonder that artists such as Taylor Swift, Bob Seger, and Jason Aldean have either refused to put their music on Spotify or had it removed. Spotify is a particularly interesting example because the creators of the content lost a source of revenue, whereas Facebook monetized content that only existed on a more limited scale.
The sharing economy makes individuals feel empowered, as if they have more control because they have more choice. However, we often fail to realize that we are still being exploited. The sharing economy allows us to feel like we are dealing with real people instead of corporations, yet the middlemen are the real winners here. Even in today’s technology mediated sharing economy, we are still cogs in the capitalist machine, and we must actively think about what our response should be. Facebook proves that our activity leads to massive revenue. Spotify has made it so that musicians have to rely on sources other than music for a livelihood. Uber has, thus far, eluded all labor standards enacted over the past century. It is time we learn that a shared economy doesn’t equate to a more equitable one.
