Why I want Rachel Botsman to be right

by | Mar 30, 2015

Rachel Botsman  - guru for the collaborative economy

HR Tech Europe - Day 2 - Image by Dan Taylor - dan@heisenbergmedia.com-203

Rachel Botsman

I was delighted to be invited to interview Rachel Botsman at the #HRTechEurope conference in London last week.  Co-author, with Roo Rogers, of the book What's Mine Is Yours: The Rise of Collaborative Consumption, she writes and speaks on the power of collaboration and sharing, through network technologies, and on how it will transform business, consumerism and the way we live. She is an impactful and engaging presenter, with a self-deprecating sense of humour.  She told us that 50% of her book sales (5) were courtesy of her grandmother and how her dad was able to nix her Uber rating.

Gracious and charming, she has had a glittering career, kick started at Oxford and Harvard. She references serendipitous encounters in airport lounges with White House aides and working for the Clintons, as casually as we might mention our first supervisor or networking event.  Two of the women who have inspired her are Hillary and Chelsea Clinton.

Why I want Rachel Botsman to be right

Rachel knew before the interview that I am conflicted about the notion of the collaborative economy. She had seen my LinkedIn Pulse post "Let's not kid ourselves, the collaborative economy is about survival" Today, technology has given our ability to procure goods and services we can't, or don't want to supply ourselves, an unparalleled propulsion, with the growth of online P2P (Peer to Peer) marketplaces.

The idealist in me would really like to believe that there are successful alternatives to our current business models. Organisations are failing (and flailing) to meet the needs of employees and other stakeholders at many levels. We are seeing huge income gaps between highest and lowest paid, as well as falling net incomes for large sections of the population, high levels of employee disengagement and burnout, a disconnect between business and our education systems and under-utilisation of the skills of significant demographics.

At the same time there is both a declining and ageing population in advanced economies, topped by skill set shortages in certain sectors.

[Tweet "You don't need to be in a think tank to realise that we are wide open for new approaches."]

Collaborative  business practises are taking off because old business models are not adapting fast enough to changes in our wider culture. They are firing a warning shot to traditional business that people want something different.

"If the rate of change on the outside exceeds the rate of change on the inside, the end is near.” Jack Welch

So it would be great if Rachel was right about these very basic shifts in human and economic behaviour. What we both agree on is that there is a need for change and the time is right.

Relationship building

Provider motivations

The notion of a collaborative economy based on relationship building and trust is appealing.  The idea of people being in control of their own destiny, feeling fulfilled and receiving recognition is powerful. If this means that individuals can generate revenue and have their needs met quickly, effectively bypassing the monolithic and frequently inflexible organisations that dominate our commercial landscapes, this will be a step forward. I also like the idea that both the service provider and end-user are publically assessed.  That is especially helpful in B2C online marketplaces where this works really well.

[Tweet "In general, opening up markets for small vendors is an excellent development."]

New currency is trust

Rachel's new focus is on trust and reputation capital, gained via collaborative economy endorsements forging working relationships between people whose only interaction is virtual.  I would love that to work.  Currently there is a general scepticism, which has prompted TaskRabbit  to add insurance options, to cement that elusive "trust between strangers." Could that change?  It will mean persuading people that if I am reliable in one activity, for example if I serve a great English breakfast to my guests (AirBnb) or provide water in my cab (Uber,)  I am defacto trustworthy in other areas.

Collaborative Finance

As an additional element, Rachel predicts the growth of collaborative finance, peer-to-peer, non-profit borrowing and lending which will operate differently to today's banks and finance houses. They don't sound too dissimilar to the co-operative banks set up at the end of the 19th century. With a widespread disillusionment in our existing financial institutions who wouldn't want viable alternatives? We are all too familiar with attempts to bypass existing legislation by individuals and major organisations, so if these new organisations will make a difference, I hope they work. Add on too crowd funding companies such as CrowdCube offering new opportunities for investors and start-ups to flourish. This will give small businesses access to capital which has been denied over the last years.

 Why I have concerns

The area of greatest concern is less the provision of goods, but of services.

My fear is that a high number of e-billionaires will be created and the lives of the contractors will remain unchanged and as financially precarious as ever. Many of the practises of a sharing economy have been around since we lived in caves, so this evangelism is to some extent, about a turning back of collective clocks and re-branding of old and existing commercial practises.

Bartering, piece and seasonal work, moonlighting, taking in lodgers, laundry or kids, are well established practises in all historical business models, for people wanting to earn extra money. There have even been calls to go back to the days of the wet nurse. Now that is one app that can legitimately called "Boober."

So I can see the appeal for any demographic which is time rich and cash poor and struggles for different reasons, for suitable economic integration. But people need to be able to generate sufficient revenue to survive in a way that is not exploitive.

Ethics

Many of these transactions rely on the ethics and integrity of all players, especially the platform founders. Exactly as they do in other business models. Uber CEO Travis Kalanick, is constantly under fire for creating and generating a top down "asshole culture."  There will always be the good guys and those that don't give a damn. "Like" buttons don't change that. The proliferation of fake profiles on every platform also undermines the currency of trust and the efforts of the few. But what has also accompanied the growth of the micro-entrepreneur sector is a tsunami of unregulated commercial activity.

The downside is the degree of exploitation on both sides of the equation that is starting to be widely reported. I have long railed against unpaid internships (since 2010) the rise of permatemps and zero hour contracts as large pools of labour were on the market at a time of global job reductions, became open to abuse. Now we are seeing elements of the collaborative economy in need of regulation. This is no different to other historical trends. But whether these platforms will replace companies and become the new bosses, time only time will tell.

Flexible can be a euphemism for vulnerable.  This is nothing new either.

Regulation exists for a reason

As any historian will tell you, regulation of many areas of society has come about to protect people from abuse and exploitation. There is an assumption that those involved in the collaborative economy will be immune from what Oscar Wilde describes as "the rich making slaves of the poor"   TUC boss Frances O’Grady suggests that flexibility is "just a way of employing staff on the cheap"  At the moment we are seeing a fragmented group of freelancers, who in many instances are being preyed on by organisations who have laid off employees, with rates being driven downwards.

Some of these P2P platforms in the so-called "gig" economy are also starting to self-regulate as complaints from both disgruntled contractors and end users pour in. So whether it's the AirBnB host whose guests turned into squatters, the Uber passenger who was raped by the driver, or the Tasker who absconds with the lawnmower.

It is clear that in this Utopian world, all is not plain sailing.

 Data driven

I would also like to see some concrete data driven research about people's experiences based on meaningful samples. It's nice to hear about people who find purpose and job satisfaction, but there are also questions that are not asked. Do they pay taxes,  can they live off the revenue after deductions, what are the costs, how many hours do they need to work to pay their bills?  And how is the self actualisation described in this model different from Maslow's Hierarchy of Needs?

Currently there seems to be reliance on anecdotal evidence. My own anecdotes are generally mixed, from people who use the platforms as contractors as an interim measure, because they need the money while job seeking, rather than as a long-term economic activity. This is also visible in the public domain for both Uber and Task Rabbit. Others  from my experience are working mothers who create lifestyle businesses (monetization of hobbies or skills) and have partners who provide the main revenue stream.

 Lasting message

As I perched on my lime green, plastic stool at #HRTechEurope, wishing I'd worn heels to prevent an indecorous slide to the floor, I so wanted to be persuaded that I was wrong and being unnecessarily cynical.

I struggled.

But what I do recognise is the absolute need for these optimistic, counter intuitive Utopian thinkers to make us really re-examine the way we view and live in our societies and to contemplate  serious alternatives. There have been many examples throughout history of people who led movements who wanted to live their lives differently.

Rachel was keen to impress upon me that the concept of a collaborative economy is a "baby" and as governments play catch up to impose some protection on P2P platforms and their users, all involved, she maintains will be empowered to make meaningful connections.  These connections will enable us:

 "to rediscover a humanness that we've lost somewhere along the way, by engaging in marketplaces like Airbnb, like Kickstarter, like Etsy, that are built on personal relationships versus empty transactions."

If the growth of the collaborative economy forces the regular economy and organisations to re-examine the basic tenets of the way they operate and their corporate values, I wish Rachel Botsman every success.

I really do hope she will change the world.

Dorothy Dalton Administrator
Dorothy Dalton is CEO of 3Plus International. A specialist in diversity and bias conscious executive search, she joins the dots between organisations, individuals, opportunity and success.
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