The Hogging Economy

Like many I am drawn to the sharing economy, it feels liberating and likely adds variety to our lives (where choice and variety are not the same thing). It challenges the big corporations and vested interests with their blandness and beigeness. AirBnB is of particular interest, I must confess I loath the corporate sleep factories masquerading as hotels that I stay in on business trips.

Most corporate sectors are protected by barriers to entry, regulation, “the knowledge” and so on.  The sharing economy breaks those barriers down and disrupts cosy industries. How refreshing.

But then most of us work for those same corporations. As a result we get to be sick, grow old and have kids with some security. Perhaps that is a deal we might not wish to throw away too hastily.  I am not sure that singing for our supper (and breakfast and lunch, every day) is really what we have in mind.

Try this excellent interview with Jaron Lanier for a deeper perspective http://www.salon.com/2013/05/12/jaron_lanier_the_internet_destroyed_the_middle_class/

Then we must also remember that pioneers of the sharing economy are global. Let’s take AirBnB, like many other web plays that kick off with a whiff of libertarianism, it looks like pulling off the global winner takes all trick, yet again controlling a huge share of the entire global supply of some commodity, in this case shared accommodation for travellers.  See also Uber et al.  In each case the market does actully contain a handful of players, but it is a tiny handful sucking in supply globally.

I don’t think that is really what we have in mind either is it? 

Well done AirBnB and Uber, you’ve created a new market, based on new de facto standards that you have brilliantly realised.  But you can’t have it all, sorry. It is time to take those standards and make them open.

Amazon, the same goes for you, come on, hand over the Kindle, the content standards and the market platform. Well done, but that’s enough thank you.

And so on.

What do you think ?

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12 thoughts on “The Hogging Economy

  1. One of the best things to come out of the Internet era are open standards. In fact, the open source movement which allows individuals, and even large companies, to open their doors not just to their software but to the entire source code has become so large that the principles are being applied in places never thought imaginable. Then there’s crown-funding (Kickstarter, Indiegogo et al), the ability to seek funding, or offer your own funding, to almost anything – software, gadgets, even film scripts.

    So, we’re not short of sharing on the Internet. And when I say “sharing” I don’t mean sharing photos of Uncle Clive having a wee, I mean sharing for some sort of mutual commercial gain. And so we come onto companies like AirBnB or Uber. Personally I don’t see this as a sharing conversation. Yes, their businesses could not have existed before the Internet but are they not simply the next generation of business using the Internet as a medium for conveying their services or products ? Is this any different to ANY new business ? Mobile phones didn’t exist when I was a kid but they’re now a multi-billion dollar business. Should they give their business away too ? Or PC manufacturers ?

    I think the fact that they are woven into the fabric of the Internet is where the confusion lies. Amazon is no different to a supermarket – huge, dominating, selling stuff – but just happens to use the Internet as its store front. Why should that make a difference ? I think if you’re about to force Internet businesses to give away their business you’re basically challenging the principles of the free market economy where anyone can set up any business doing anything. Granted, there are many people who think free market economics are not entirely a good thing but it shouldn’t have the word “Internet” at the front to make it valid.

    Right, off to upload some pictures of a rather large bee I saw in the garden to see if anyone wants to buy them.

    • In principle I think AirBnB a brilliant business. I wish I had the guts to get a flat or a house in one if the places I go to, only to stay in some dreadful and stiflingly safe chain hotel. A villa in a side street in Bangalore in my next trip? Brilliant. Bring it on.

      I’m also a pretty committed capitalist. One if those who seeks to take and be in control of my life and responsible for it.

      I’m also fully signed up to change driven by technology. The demise of small book shops is a bit of a shame but then I’m sure if have felt the same about horses and carts for a while.

      But the winner takes all trend apparent in web businesses seems wrong to me as does the idea of business models so transactional that they carry no security at all for people bound to sing for breakfast, lunch and supper every day. Except when they’re ill, old, having children or even being children.

      You raise mobiles and wonder if those who run those businesses should give them away.  GSM is an open standard. In the UK there are four operators and any number of MVNOs overlaid on them (Tesco, Giff Gaff etc.). Globally, while a few big companies tend to dominate, markets are regulated to ensure some competition.  It is not perfect but there is some choice and something approaching a market. That many MVNOs can leverage the infrastructure of the few carriers seems to work quite well.

      Supermarkets are another monopsony. There too a very few have a strangle hold primarily on supply, their strengths being in sourcing and logistics. That squeezes the little guy out, increasing apparent choice but eliminating variety.

      The web tends to lead to extreme winner takes all outcomes. 

      Technology enabled businesses like supermarkets also have the same effect, albeit instead of winner taking all, a few take all but the resulting reduction in variety and competition is much the same.

      I think a little disruption would be healthy.  It might be interesting if Amazon licensed some of its technology, as IBM did with the PC standard. 

      Finally, how about a , “VS”, like an MVNO but a virtual shop, which uses the supply chain of a supermarket chain but for odd shaped carrots or whatever. I suppose like amazon market place but bricks and mortar if you prefer. That might be very interesting indeed!

      Cheers,

      Anthony 

      • Ahh…I knew it wouldn’t be too long before we got to net neutrality. You raise an interesting point about the comparison with telecoms companies and the fact that they are forced to play nice by Uncle OFCOM. You could extend that principle quite a bit wider and probably create a much more even playing field. Imagine a similar regulator for grocery retail (OFMARKET ?) which outlawed monopsonic behaviour in favour of the little guy. No more worrying about the local butcher / baker / candlestick maker going bump because of the monsterously beige supermarket down the road.

        But you then run into the question about open standards and the web again and, dare I say it, the debate on net neutrality. I suspect the winner takes all attitude simply stems from the fact that, on the whole, there is zero regulation when it comes to web businesses, especially those that are highly transactional. The internet has very loose boundaries whichever way you look at it. I’ve bought gadget tat from China just as easily – and much cheaper – than I could ever do buying from a UK retailer. Is that a good thing ? It’s certainly not a new thing, when you consider the origins of the plastic tat we have always got inside Christmas crackers. The only difference now is that we have much easier access to it via the Internet than we ever had. So imagine if TBL threw a few more toys out of his pram and the Government caved in, introducing internet retailer regulation online in the UK. Amazon’s response ? We’ll pack up and go elsewhere thank you very much.

        I quite like the idea of open standards and open sharing so I totally agree this all appears a bit wonky. Kickstarter is wonderful. Indiegogo is genius. That’s what it all looks like when we get it right. Inventors come out of nowhere and the world benefits far better, and often quicker, than in the history of humankind. The same could probably be said of knowledge-sharing. I feel I know more about more than ever before simply because I have access to the Internet. The Hitchhikers Guide to the Galaxy really has become a reality.

        So it is all a bit of a shame that we have to endure monopolistic behaviour at the same time. I’m just not sure there’s a whole lot we can do about it unfortunately.

        (Cue: picture of a half-empty glass.)

      • Andrew

        You analogy with net neutrality is spot on and has really got me thinking. That is all about equal opportunity and keeping barriers to entry low.

        Instead of banging on here I think this one worth a whole post about variety, equal opportunity, I think that post might be called The Internet of People or maybe, “Yes, we all individuals!”

        Net neutrality is part of the design of the internet for the carriage of data. Perhaps the fulfilment of key services should be neutral too, and not owned. Then we can get innovation with diversity.

        Anyway, it takes all sorts.

        Anthony

  2. I’m right on the fence on this one. If I was clever enough to have a brilliant idea, and self-motivated and passionate enough to make it happen, I wouldn’t want anyone else having a slice of my fois gras pie, thank you very much. But then the demon Amazon is mentioned….I buy many books and much music from this demon, but am beginning to rethink my usage as I love to browse in book shops and music vendors and Amazon is doing a good job of crushing them into the dust. But the floodgates are open and most of us would rather have a bargain than consider the future. Perhaps our children and our childrens’ children won’t even know what a bookshop is! Aren’t policemen looking young these days?

    • Just out of interest, if Oxfam were to offer the same online experience for buying DVDs or books as Amazon, would you buy from them instead ? Is this a lack of an alternative ethical choice or simply a convenience thing ?

      • Amazon does a great job. But I occasionally decide to stop using them to encourage variety and I care quite a lot about this subject.Even I can’t tear myself away.

        Choice and variety are not the same thing.

        All my coffee cups are different. I like random things in some part so of my life and order in others. Variety gets me thinking and makes my life interesting.

        Choice is good too but not the same thing. I equate that with freedom. But too much and I end up buying and often being steered to buy the same old stuff or variations on it.

        I can feel another post coming on.

      • You’re missing one vital ingredient in this – habit. All your coffee cups may be different but I bet there’s one that you choose more often than the others because it feels nicer, the coffee tastes nicer, or its the one with the least amount of stains on the inside. Same goes for Amazon. It’s just easier largely through force of habit to go to Amazon than go (say) to Waterstones online, or play.com. There’s plenty of studies that show that even price elasticity can’t break the habitual commitments exhibited by shoppers.

        Arguably, choice and variety are devalued by habit and other aspects of human behaviour that lean towards rituals and routines. There’s a squillion pubs in London but you and I tend to only meet in perhaps 2 or 3 of the same ones. There’s a squillion restaurants but I tend to only eat in a handful of my favourites. And most menus have a squillion options but I tend to lean towards the same choices each time.

        Amazon, Tescoburys, et al benefit from this greatly because it’s just easier going there than anywhere else. People put convenience and habit above other, more altruistic values such as ethics and morals. Sad, but true.

        Which brings me back to Oxfam. If they offered variety in the sense of giving you somewhere else to go other than Amazon, and choice insofar as the range of goods they sell are broadly equivalent to Amazon, would people STILL go to Amazon out of habit even though they’d get the same experience with Oxfam AND be able to tick the ethics box ?

      • I am ashamed to admit that it is a combination of habit and convenience. I would like to think that I am ethical in lots of ways – I recycle my rubbish for goodness sake – but when I analyse the detail, I am as unethical as the next person!

    • Habit is one of the great accelerators. Trust is another. The choices of people I trust are often the ones I then follow too. I recently bought some fleecy jumpers. I asked the two people I trust most in the world, outside my immediate family, to recommend some. They did. I went and bought them. I am more than happy with the results.

      Being able to do things quickly though is not the same as finding ourselves in a position where we almost have to.

      I like access to variety even if I choose very often to choose the same things. That may even be to create time to make other new choices, meet new people and learn new things.

      This is one of the best comment streams for a while. Thanks both.

      PS It also being read all over the world, 7 countries to date, just today. That is amazing.

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