The Swarm Economy Is Not Silicon Valley's "Sharing Economy"

When we talk about the end of workplaces and lifetime employment, please don’t get the wrong idea. This has nothing to do with what Silicon Valley and venture capitalists are now calling the “sharing economy.” It was once the darling of open source advocates and socially-conscious entrepreneurs, but I now consider the term “sharing economy” to be co-opted by predatory business models. Here’s how it happened.

Whenever technological or social change threatens a power structure, that power structure always tries to reassert itself. In the age of the Internet, we already see how monopolists are trying to keep the institution of copyright alive with DRM, and nonsense rhetoric about “buying,” “selling,” and “stealing” thin air. Now, as the industrial model gives way to a more distributed way of life, the people at the top of last century’s food chain aren’t just trying to stay there. They’re trying to make sure that the food chain itself doesn’t get devoured by the swarm.

Here’s an example. The same way we can talk about Bitcoin to not necessarily mean Bitcoin but rather decentralized money in general, I’m going to give the co-opted “sharing economy” a mascot. A big, fuzzy rabbit. Specifically, TaskRabbit.

TaskRabbit is a website where people can post jobs that they need done — running an errand, fixing a broken table, painting a wall, whatever — and other people can bid to do the job for a certain price. So far, so Craigslist. But TaskRabbit also does a background check on anyone they allow to accept a job. In return for this, they take a 15% cut out of all payments. Oh, and as you do enough tasks to “level up,” you get rewards like a T-shirt, or even business cards because you’re a “real professional.”

So, the sharing economy is a temp agency crossed with a Zynga game. Wonderful.

TaskRabbit often uses the rhetoric that they help people run their own business — they’re “micro-entrepreneurs” — and they claim “some” people make over $5000 a month. These are just two things the service has in common with countless multi-level marketing scams. When you dive into TaskRabbit’s race-to-the-bottom auction platform, where desperate workers climb over one another to accept as little pay as they can, it doesn’t matter whether you’re in the few who scrape by enough to live on, or the many who barely manage to afford a phone bill. TaskRabbit still gets their 15%, not just from you but from thousands of people.

Its investors are now talking about how TaskRabbit can be a “people-powered API” that major retailers can use to exploit people. Why use an expensive delivery company when you can outsource it to a bunch of poor shmucks who don’t benefit from minimum wage or labor protection laws? Oh, excuse me. Not poor shmucks. “Micro-entrepreneurs.”

Needless to say, this is not the kind of crap we’re talking about when advocating for the swarm economy. As pirates, we’re not exactly fans of rent-seeking snakes extracting more wealth than they deserve from the (lack of) work they’re doing. That’s what happens with patent and copyright monopolies, after all. So naturally, the rest of this exploitation needs to stop too.

“Sharing economy” startups do a lot of potentially nice things. The ability to pull out your phone and see if anyone needs something in your vicinity? Wonderful. Making your own hours and only taking the jobs you want? Fantastic. How about we have those nice things, but without the system that incentivizes hideously low pay, the profiteering platform holder skimming money off the top, and the obnoxious gamification? (I mean, honestly, that gamification. There’s a reason I picked TaskRabbit to beat up on instead of one of its competitors. Oh my god is that gamification ridiculous.)

See, here’s where the swarming part of the swarm economy comes in. The idea is that people swarm around various trades and services, and create an environment for them that doesn’t look like that.

It makes absolutely no sense that these job-finding platforms are not — at the very least — cooperatively-owned enterprises controlled by the workers. I mean, come on, last year was the International Year of Cooperatives for chrissakes; have we really still not heard of this type of business structure? A cooperative — or perhaps a network of local cooperatives — could maintain an online platform for fulfilling jobs, and distribute the proceeds from the 15% cut as dividends to each member. Its members might even ditch the competitive bidding model entirely, to avoid the race-to-the-bottom problem.

Or the whole thing could operate on a LETS instead of with money, so the community can base the economy on its needs. Instead of just the workers being a part of the swarm, this could be an entire local community swarming around all of the economic activity it needs done. Build an open-source platform that lets any community have a pretty, functional interface to manage all this, and voilà: a new economy that’s actually, in reality, based on some semblance of actual sharing.

A universal basic income might make the race-to-the-bottom less of an issue. These jobs would then genuinely be just “extra money,” because at the end of the day, everyone has a living no matter what. But a UBI alone isn’t enough to get rid of rent-seeking. If you’re making the minimum amount to afford an apartment, but you’re still paying your rent to a landlord who doesn’t even live there — well, that’s just silly.

If these exploitative business models still exist, then a government-provided UBI essentially just becomes more corporate welfare in the same vein as bank bailouts and industrial subsidies. Faced with a gutted middle class and a population too poor to spend, corporations wouldn’t be able to make as much profit. So they’d welcome the government’s efforts to hand out money that would then, inevitably, end up in their hands.

If we really want a new economy, we’re going to need to hit some reset buttons and shake up some social institutions. That’s something not even the Internet, not even Bitcoin, not even 3D printing can make happen automatically. If the surveillance state has taught us anything, it’s that we need to stop blindly trusting technological progress to lead to better outcomes and make that better world happen. We need to fight for an equitable economic order. One that’s not just rhetorically based on sharing and mutual benefit, but actually.


  1. Anonymous

    We do need to do work to get a different economy.

    The government isn’t going to “create jobs” for you.

    Go make them yourselves, and settle for breaking even being good enough sometimes.

  2. nick

    you write really well in English Rick, I encourage you to continue to give us the good advice.

    1. Rick Falkvinge

      Uhm, thanks, except this is Zacqary writing. He lives in Long Island, New York. 🙂

  3. frank87

    The race to the bottum is what most politicians want: It saves 36 EUR/household in the Netherlands (the anti-trust-agency proudly published this).

  4. steelweaver

    The combination of UBI and some form of land tax would go some way to avoiding the ‘rent trap’ you describe – if landlords try to gouge renters for their UBI money, renters can live at a higher density in fewer spaces and wait for the cost of the land tax to push property-owners into offloading their housing stock.

  5. James O'Keefe

    Check out – which comes at it from a gift economy perspective. Mark Boyle’s book is good, though the no money life he led is not for everyone.

  6. Yorkshire Tyke

    Here in Northern England I think this kind of economy is already well established. While the UK government rants about clamping down on the “Black Economy” my experience is somewhat different.

    Just recently I rewired ( I am an electrician) a kitchen as repayment for someone who did a most excellent tiling job for me.
    Lately I have wired a shower for a young lady who lives near me (someone else did the plumbing) in exchange for a kiss and my front garden being weeded and generally sorted.
    I repaired a cooker and had a wall in my living room re-plastered.

    This kind of thing is commonplace where I live.

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  8. Max Pont

    True indeed. But then do it. Where is the group of open source developers who can start a non-profit cooperative web site for reputation/trust and managing temp jobs, holiday apartment swapping, private car rental/car pool sharing, etc.?

    By the way, when I look for plumbers, cleaners, movers etc. I would never base my decision on price only. Even when there are “review-sites”, they are often too corrupt. I prefer to call around. In that way I get a better impression of the person. Even when I buy stuff online, I usually don’t look for the dirt cheapest as these sellers often are unreliable, fraudulent, or very slow. Race-to-the-bottom business models will most likely not make it. Good.

    1. Jesse

      This is the best comment of the lot, Max. Thank you, especially for your first point. There are SO many platforms to be created that are not as profitable as some of these first sharing economy models, but which would benefit neighborhoods and communities tremendously. E.g. a child-care sharing site where grandparents sign up and parents drop their kids off. Any developers interested? I’ve got loads more.

      @Zacqary, I agree that we need to be vigilant about what is considered “sharing” and what is not – one of the major reasons why definitions for this new distributed economic paradigm are so important. We’re working on those definitions, regulatory policies, and worker protections, but these things take time. Don’t lose hope so quickly. You might be surprised at how things evolve in the coming years.

      Great article, but don’t hate on TaskRabbit too much. 🙂 Leah and her company definitely do not represent the epitome of the corporations who keep so much wealth locked up.

  9. Shane

    thanks, good article, the corporate profit making structures have always co-opt any progress made by social change maker movements… those movements haven’t managed to trigger the big transition many think is needed but now we see that the new tech and information innovations are making a massive transition inevitable but where the chips fall is still undecided and whether we just end up with a more networked version of the current profit driven exploitative system is still undecided.

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  11. Nathan Schneider

    It’s good to see you bring up cooperatives here, but what would cooperatives look like in a swarm economy? Often the value of coops is in their stability, their security — not so much their ability to turn on a dime and gather around whatever the next good idea is that comes down the pike.

    Also, what would democracy mean in a swarm economy? Would it be tantamount to virality? Are we comfortable trading more institutional forms of democracy for this?

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