Learners are prompted to consider the political, social, and technical aspects of a peer-to-peer sharing economy application. Learners engage a design activity that involves both technical and policy design. The learning aims are to:
1. Introduce some of the political, social and technical aspects of the “Sharing Economy”
2. Develop skills for writing value scenarios while exploring the implications and considerations of policy design and technology implementation
3. Explore the viewpoints of entrepreneurs and policy makers related to innovation, business models, and community-based regulations
4. Explore how policy considerations and human factors can influence technology design and business models.
The Sharing Economy is a term that encompasses communities and businesses that use information technology—social media platforms, dedicated online sites, mobile apps—to facilitate the exchange of goods and services for money, for barter, or for free, within a “gift economy.”
Sharing Economy projects range in purpose, stakeholders, and impact. Some projects, such as the Buy Nothing Project (Clark, 2013), are free. Free and small-market exchanges are typically strongly situated in neighborhoods and are intended to foster community and limited commerce. Other projects are global and facilitate perhaps millions of transactions a day. Examples include car services, such as Lyft and Uber, and accommodation rental services, such as AirBnb.
The diversity of interpretations of what constitutes the “sharing economy” has given rise to several alternate terms, including “Collaborative Consumption” (Belk, 2014), the “Gig Economy” (Sundararajan, 2016), the “Peer-to-Peer Sharing Economy,” and sometimes, “Goods as a Service” (Botsman & Rogers, 2010). To differentiate them from low or no-cost exchanges and to acknowledge the central profit objective, some commentators refer to the large market exchanges, such as Uber, as “pseudo-sharing” (Belk, 2014). All of these terms and the projects associated with them raise questions about the future of work. For a fundamental critique of the “sharing economy” and potential policy remedies see Calo & Rosenblat (2017).
Ride sharing services. In many U.S. cities, taxi regulation also sets uniform fares and limits the number of authorized taxis to ensure that pricing is transparent for riders and that there is enough business for the drivers and their companies. When the app-powered car services such as Uber and Lyft entered the car service business sector, they operated largely without seeking to meet preexisting regulations for taxis and limousines.
Traditional taxi companies, for example, typically must invest in special taxi licensing (e.g., taxi “medallions”), and are required to charge metered rates set by local government. In addition, they are subject to regulatory scrutiny in many aspects of their businesses. By contrast, Uber and Lyft contract directly with drivers (who use their own cars), charge customers a variable rate based on demand, and conduct all transactions electronically—out of view of regulators (Soper, 2014). Despite the novelty of these arrangements, taxi companies have argued that “ride-hailing” services are, in fact, taxi companies operating outside the law and engaging in unfair competition with the more regulated companies. Adding to the controversy, there have been tragic car accidents and physical assaults on passengers involving ride-hailing service drivers. However, due to the “contractor” status of the drivers and other quirks of these on-demand business models, the legal responsibilities of the companies and drivers have been unclear and are often contested (Badger, 2013).
Peer-to-peer rentals. Similarly, AirBnb began its operations by enabling potential “hosts” to post room and home rentals on the AirBnb site without concerning themselves with local laws or licensing requirements (Law, 2014). Before long, neighbors were complaining about strangers and noise involving AirBnb rentals (Walker, 2016). Licensed hotels and inns claimed that AirBnb enabled their hosts to engage in unlicensed business operations without having to assume the regulatory burdens or meet the health and safety standards required of traditional establishments. In addition to neighborhood nuisance issues, there have been thefts, assaults, injuries, and even deaths involving AirBnb-brokered accommodations (Lieber, 2015). As with the ride-hailing services, determining liability when things go wrong is not always clear.
Government response. State and local governments have responded to these conundrums and legal ambiguities in many different ways. The City of Portland, Oregon responded to AirBnb and Uber by initially prohibiting their operations outright, but eventually created regulatory schemes that were acceptable to city government. In Seattle, the City Council—to the dismay of ride-hailing companies—has sought to ensure that drivers can unionize if they desire. In France, the Parisian authorities banned a more informal version of Uber, called “UberX,” and have challenged the company with aggressive enforcement actions on the streets and in the courts (Alderman, 2015). In Spain, AirBnb received large fines for failing to coordinate their listings with an official tourism board. In Madrid, AirBnb rentals cannot be transacted for fewer than 5 days, leaving the shorter-term market to the hotel industry (Frayer, n.d.). In a sharp contrast, in Reno, NV, AirBnb has been welcomed without complaint by local industry, and mostly ignored by government (Snyder, 2014).
From these examples, we can make several observations.
- Sharing economy services, enabled by mobile phones, are popular with consumers.
- Sharing economy services are disruptive businesses, which challenge existing business and economic models and hold very high profit potential. Uber and AirBnb, for example, have been valued at $51 billion and $25 billion, respectively (O’Brien, 2015a, O’Brien, 2015b).
- Local communities are often unprepared for the introduction of peer-to-peer exchange companies; yet, local politicians and policymakers are often forced to respond quickly when, for example, Uber enters their community. Accordingly, their responses have varied and basic policy questions are far from settled. It seems likely that governments and incumbent businesses will be dealing with new sharing-economy models for the foreseeable future.
- Technological and legal changes are occurring rapidly in the sharing economy, as businesses innovate and as societies respond to new developments and as new practices and norms develop.
The sharing economy is much more than just AirBnb, Uber, and Lyft. Yet these companies have garnered a large amount of attention in the press and among such stakeholders as local and state governments, taxi/hotel industry groups, business advocates, and concerned citizens. The ensuing controversies illustrate some of the value tensions that have emerged in what was, until recently, a fairly banal marketplace of familiar commercial services and low-impact personal exchanges.
Imagine NeighborSpin, a peer-to-peer platform that enables people to share laundry facilities. The idea is that underutilized clothes washers and dryers can be scheduled. Stakeholders get their clothes washed and get to know their neighbors. The root idea is to enable people to more fully utilize a durable good—laundry facilitates.
Is such an idea feasible? If so, in what social context and under conditions? If not, why not?
Explore sociotechnical solutions. Consider several different social contexts—for example, an urban neighborhood, rural community—and explore different technical solutions in those social contexts. Consider your ideas in terms of technical solutions and the social context, and explore these questions:
- Social context. Would some social contexts be more suitable for NeighborSpin than others? What kind of social context might enable NeighborSpin to succeed?
- Technical features. What technical features would need be developed to match people to laundry facilities? How would the technical design features ensure quality standards for the practices of laundry owners and good behavior on the part of the laundry users?
- User experience. What will the user experience be like for the laundry owners and laundry users?
- Potential benefits and harms. What potential benefits and harms might laundry owners and users experience? How, if at all, might the benefits be maximized and harms be minimized?
Follow this 5-step design process:
- Decide on a root concept. Based on your explorations of social contexts, technical features, user experiences, and the potential benefits and harms decide on a root concept. The root concept is the central, focusing idea for your version of NeighborSpin.
- Identity the direct and indirect stakeholders of NeighborSpin. Direct stakeholders would interact with the NeighborSpin whereas indirect stakeholders would potentially be impacted by it but would not interact with it. In your analysis also consider non-targeted stakeholders — for example, stakeholders who might want to subvert or abuse the NeighborSpin or somehow engage in fraudulent behavior.
- Value source analysis. Your design is likely to support some values—perhaps, for example, environmental sustainability—and depend on others—perhaps, for example, trust between neighbors. Identify as many human values as you can that might be implicated by your design. Be sure to consider your own values as designers and the values that your stakeholders might hold.
- Develop working definitions of key values. Of the many values that you have listed, select the three most important values and develop working definitions for them.
- Write a value scenario. Given your stakeholder analysis and your analysis of the potential values implicated by your design, write a 150-word value scenario. A value scenario focuses on stakeholder values, widespread use, indirect impacts, longer-term use, and similar systemic effects. Write a set of bullet points on the most important elements of your value scenario—that is, what are the key things that you are seeking to convey in your value scenario?
Document the results of your process on a single sheet of poster paper. Cover the following topics:
- Root concept
- Key direct and indirect stakeholders
- Key values.
Introduce your poster and your value scenario in a 5-minute presentation. After your presentation allow for 5-10 minutes for discussing your design solution.
- In what ways do the technical features of your solution to NeighborSpin implicate human values. What human values come into consideration?
- What values and value tensions are implicated in your value scenario? How will the stakeholders be affected or changed by your design?
- What are the possible impacts of your design on the community? Will the government get involved? Will business concerns rise up in protest? Will neighbors complain? What might you do about these potential impacts? What are the societal benefits you can tout?
- Do you see the need for policies to regulate your design solution? Or, relatedly, do you see the opportunity for policies to help create the conditions that will improve the likelihood of success?
- Reflect on the four-step process for analyzing the technical and social conditions for NeighborSpin. How did the process unfold? What seemed to work? What seemed to be missing?
- In your value scenario, what time frames did you consider (very soon, a year or two, several years from now, etc.) ? How do you think the time frame influenced your value scenario?
- Do you think your solution to NeighborSpin is feasible from an business standpoint? Do you think that people would invest in your idea? Why or why not?
This case study has been successfully adapted for use in a 50-minute classroom session, comprising mostly first and second year undergraduates in Informatics. In addition, it has also been used in a 10-15 hour project, spanning two in-class studio sessions, and worth 15% of the overall grade in an advanced undergraduate Informatics class.
In a 110-minute undergraduate class, the activity might be structured as follows:
- Read the section “Sharing Economies and Other Economies” (10 min)
- Working in groups of three or four, explore the design prompt and follow the design process (45 min)
- Develop and write the value scenario (20 min)
- Presentations and consider the discussion questions (35 min).
Reflective Writing Prompts and Exercises
- Typically, different stakeholders value different things. Furthermore, sometimes a single stakeholder may be uncertain or conflicted about the importance of a value or set of values. In these cases, value tensions can arise. Beginning with your value stakeholder analysis (step #2) and value analysis (step #3 and #4), identify and discuss two key value tensions of your design solution.
- Write a 500-word reflective statement on your process, focused on how your policy and technical design explorations worked together and how they played out in your value scenarios.
- In this design activity, you pursued a four-step process. Propose a 10-15 hour feasibility study that builds on this short design activity. How might you develop and elaborate the methods that you employed? What new methods would go into your study?
- Is your design solution feasible? Prepare a three-page report that supports your view and makes a recommendation for either moving the project forward or not.
Alternative Design Prompt
Suppose you are the mayor of a mountain town that relies on seasonal tourism as a major economic driver. There are a handful of locally-owned hotels and inns that are well-established, but business is up and down. One business recently failed. You have learned that several townspeople have started advertising rooms for rent in private homes through the “home-sharing” service, AirBnb.
AirBnb rentals tend to be cheaper than accommodations at the established businesses. All transactions take place online, so it’s not clear how much business is taking place, but the management of the incumbent hotels and inns report that they are losing revenue. AirBnb has not contacted local authorities to seek permission, and they have not offered to pay any fees or taxes.
Opinions among townspeople are mixed. Some think AirBnb will provide needed income to renters. Others, including the owners of local hotels and inns, argue that the competition is unfair, and that quality standards can’t be assured at the AirBnb rentals, potentially creating problems for visitors. The town council is looking to you to lead the way in deciding how to proceed. Consider all of the potential benefits for the townspeople, as well as the “disruption” that might occur in the business environment and economy. Propose some possible approaches that will provide the best outcomes, taking into account the interests of the direct and indirect stakeholders. If the town decides to regulate home-sharing, you’ll have to figure out how to enforce whatever rules are put in place and monitor the transactions.
- Policy Design. What sort of home-sharing regulations make sense for your town?
⁃ Prohibit AirBnb (and the like)?
⁃ Do nothing and let the market work it out?
⁃ Regulate home sharing?
⁃ If new policies are put in place, how will they be enforced?
- Technical Design. How might new/repurposed technology play a role? Can you think of a technical artifact that could support the interests of the businesses? How about one that would provide transparency in regulating home-sharing?
- Write a value scenario. Develop a narrative that incorporates your design solutions. Imagine stakeholders interacting with your policy and technical solution. What would happen next? Consider the short, medium and long term effects. Consider how your approach, if it became the ‘norm’ for other towns, would impact other stakeholders. Think about consequences, including unexpected ones.
Alderman, L. (2015, June 3). Uber’s French Resistance. The New York Times. Retrieved from http://www.nytimes.com/2015/06/07/magazine/ubers-french-resistance.html
Badger, E. (2013, September 10). The Strange Tale of an Uber Car Crash and What It Means for the Future of Auto Insurance. Retrieved September 2, 2015, from http://www.theatlanticcities.com/commute/2013/09/real-future-ride-sharing-may-all-come-down-insurance/6832/
Belk, R. (2014). You are what you can access: Sharing and collaborative consumption online. Journal of Business Research, 67(8), 1595–1600. http://doi.org/10.1016/j.jbusres.2013.10.001
Botsman, R., & Rogers, R. (2010). Beyond Zipcar: Collaborative Consumption. Harvard Business Review, 88(10), 30–30.
Calo, R. and Rosenblat, A. (2017). The taking economy: Uber, information, and Power. Columbia Law Review, 117, 68 pages. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2929643
Clark, L. (2013). Buy Nothing Project. Retrieved March 10, 2016, from http://buynothingproject.org/blog-2/
Frayer, L. (n.d.). Uber, Airbnb Under Attack In Spain As Old And New Economies Clash. Retrieved March 2, 2016, from http://www.npr.org/sections/parallels/2014/07/29/327796899/uber-airbnb-under-attack-in-spain-as-old-and-new-economy-clash
Law, S. (2014, June 24). Portland to embrace Airbnb-type short-term rentals but not in apartments and condos. Retrieved September 1, 2015, from http://portlandtribune.com/pt/9-news/225147-87529-portland-to-embrace-airbnb-type-short-term-rentals-but-not-in-apartments-and-condos
Lieber, R. (2015, November 13). Death in Airbnb Rental Raises Liability Questions. The New York Times. Retrieved from http://www.nytimes.com/2015/11/14/your-money/death-in-airbnb-rental-raises-liability-questions.html
O’Brien, S. A. (2015a, June 27). “Crazy money” – Airbnb valued at over $25 billion. Retrieved February 19, 2016, from http://money.cnn.com/2015/06/27/technology/airbnb-funding-valuation-update/index.html
O’Brien, S. A. (2015b, July 31). Uber is the most valuable startup in the world. Retrieved February 20, 2016, from http://money.cnn.com/2015/07/31/technology/uber-50-billion-valuation/index.html
Snyder, R. (2014, June 5). Despite national concerns, Airbnb welcome in Reno. Reno Gazette Journal. Retrieved from http://www.rgj.com/story/news/2014/05/19/despite-national-concerns-airbnb-welcome-reno/9269343/
Soper, T. (2014, December 8). Portland files lawsuit against Uber, asks company to stop operating illegally. Retrieved from http://www.geekwire.com/2014/portland-files-lawsuit-uber-asks-company-stop-operating-illegally/
Sundararajan, A. (2016). The Sharing Economy: The End of Employment and the Rise of Crowd-based Capitalism. MIT Press, Cambridge, MA.
Walker, R. (2016, March 5). Airbnb Pits Neighbor Against Neighbor in Tourist-Friendly New Orleans. The New York Times. Retrieved from http://www.nytimes.com/2016/03/06/business/airbnb-pits-neighbor-against-neighbor-in-tourist-friendly-new-orleans.html