The collaborative economy’s poster children, Uber and Airbnb, are megastars right now. There are so many start-ups describing themselves as “an Uber, but for X” that it’s become a cliche. But even Rachel Botsman, the guru/thought leader of the collaborative economy, can see the fundamental flaw at the heart of the system that she spruiks. She’ll even admit it, if she’s pushed.
Botsman gave the closing keynote at the ADMA Global Forum in Sydney on Wednesday. ADMA is the Association for Data-driven Marketing and Advertising, but you might know it by its old name, the Australian Direct Marketing Association. Its annual conference is chock full of techniques for squeezing big data for profit.
The collaborative economy is big with this crowd. Nearly 80% of those in the keynote room had been an Airbnb guest at least once. Nearly everyone had used Uber. Most had used the low-cost UberX, where anyone with a car can tout for rides.
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You may have well have heard all this referred to as the “sharing economy”, but Botsman doesn’t like that term any more. I’ve never liked it. Sharing is a noble thing. We share our toys. We share a pint. Sharing isn’t about charging people’s credit cards when they borrow your stuff. No, “collaborative economy” it is now, and it’s based on trust. So much so, in fact, that it’s sometimes referred to as the “trust economy”. Indeed, Wired laid it on thick last year in a feature titled “How Airbnb and [Uber competitor] Lyft Finally Got Americans to Trust Each Other”.
In most of these services, the “trust” is based on a ratings system. Customers rate Uber drivers and Airbnb hosts, and the drivers and hosts rate their customers. Both customers and service providers get to choose with whom they do business.
Botsman’s keynote was the usual sort of thing. Endless positivity about success stories. About Uber’s $50 billion valuation putting it among the top 150 companies globally. About how the head of France’s high-speed train network says his biggest worry is now the Uber-but-for-long-distance-rides BlaBlaCar.
To get a flavour of Wednesday’s keynote, watch Botsman’s 2012 TED talk, “The currency of the new economy is trust” — every thought leader must have a TED talk, right? Or listen to her 2014 interview with the BBC World Service program Global Business. What we heard this week was essentially that same standard message, but with different examples plugged in.
One of those examples was about how Botsman let her father “borrow” her Uber account, because he hadn’t used Uber before, and he hadn’t built up a trust rating. The BBC interview had a different example, about how she’d let her husband “borrow” her Airbnb account, because he couldn’t get a booking accepted using his own.
In both instances the story was met with amused chuckling — but hang on. Even the guru of the trust economy can see that newcomers won’t be “trusted” and won’t get service, and she happily admits to casually committing identity fraud to subvert that trust system.
When service providers can choose whether to accept a customer or not based on nothing more than a photo and a star rating, it can lead to all manner of discrimination.
WNYC’s On the Media has discussed situations where black and Hispanic passengers were rejected by Uber drivers. Drivers can be rejected via this instant racial profiling, too. Uber has faced lawsuits claiming bias against blind riders. And last year, a Harvard Business School study of New York Airbnb listings found that non-black hosts could charge around 12% more than black hosts for equivalent rentals in the same suburb and with the same amenities.
So how do we stop these rate-the-customer processes producing a world where the only people who get served are attractive and likeable white middle-class extroverts? I put that question to Botsman: “I can say that companies like Airbnb are really concerned about this. Like, how do these profiles not start a whole new era of discrimination? I don’t know that Uber would say that, but this is the big question,” she said.
“We have to figure out how, because it is one of those things that isn’t going to go back. But I think about it a lot, and it’s interesting, because I was teaching this MBA, and I had people from all over the world, and the number of times they challenged my bias because I am a middle-aged Western woman was absolutely fascinating. This isn’t a system of empowerment to many people, this is a system of discrimination.”
Fascinating, yes, but what’s the answer? I suspect it’ll be something that the cyber-libertarians of Silicon Valley won’t like: government regulation. If for no other reason than ideology, they’ll fight that hard. Uber, for its part, has made it very clear that they won’t play nice with governments.
As I wrote last year, enjoy your Ubergasm, but don’t expect respect in the morning.
*Stilgherrian will be in debate against Uber at the ACCAN National Conference in Sydney on September 2.