THE BLOG
07/31/2014 01:56 pm ET Updated Sep 30, 2014

The Sharing Economy at a Crossroads

Why buy a car or stay at a hotel when Zipcar and Airbnb can do? These two services demonstrate the power of the sharing economy, which has taken off with the simple, seductive promise of liberating people from the hassles and costs of ownership and overpriced commercial services. The sharing economy promises much practical and economic good for those who utilize it. The largely unexplored cultural consequences of the sharing economy, however, are decidedly mixed. On one trajectory, the sharing economy offers a chance to break free from the worst impulses of our consumerist society. But it could just as easily reinforce the worst impulses of the Millennial generation. Which will win out?

Consumerism subverts the principle that our actions reveal our fundamental identity by elevating what we buy as our most important decision in life. Because the sharing economy decouples ownership of an asset from its use, it could appear to inspire a breaking away from the consumerist mindset that demands the accumulation of ever more goods. With the sharing economy, we can have the middle-class benefits of a car when we need it without feeling the obligation of owning a car to feel middle class. And without a car to own, we can sidestep entirely the social considerations of what kind of car to buy and what it does or doesn't say about our identity and status.

Consider too the important good the sharing economy does by continually reaffirming human trust. The success of the sharing economy rests on our innate desire to trust others -- and owes a great deal of thanks to the earliest pioneers of internet commerce. But the sharing economy goes one step further because, unlike Amazon, our physical engagement demands more than a mere exchange of credit card numbers for a package in our mailbox. With each Uber passenger safely transported or Airbnb door opened, the sharing economy rewards and affirms our trust in others. In an age where trust is repeatedly violated by traditional institutions, the sharing economy is a vital reminder of the goodness of people.

For all this, there is a very real downside to the sharing economy, one that reinforces the worst impulses of the Millennial generation which champions it. For many users, the rational conveniences of the sharing economy are a mere cover for forgoing the personal responsibility and discipline that comes with ownership and true independence. No longer having to worry about filling up a car or maintenance and leaving it to a class of Uber drivers is undoubtedly an alluring prospect. Taken too far, these frictionless transactions indulge a broader societal craving to disentangle ourselves from the responsibility of our actions. It reinforces a mindset of instant gratification without an appreciation of the work required to realize it.

The sense of community that the sharing economy fosters is a complicated one. Whatever Adam Smith may say about it not being from the "benevolence of the butcher, the brewer, or the baker that we expect our dinner," but their own interest, hopping into an Uber blurs that distinction from the moment of the driver's cheery introductory call. Hopping into an ordinary car feels like catching a ride home from practice in high school, and so I do what I wouldn't think about in a normal cab: I hop in the front seat. Many Airbnb users especially enjoy the chance to meet and interact with their host. A hotel manager could be no less interesting, but being in a private home changes our conception of the relationship with the host. There is something here that comes uncomfortably close to the logic of hookup culture. The interactions give the semblance of the personal, masking what is fundamentally still an anonymous, fleeting exchange. It satisfies a base desire for human engagement without the demands of a true relationship.

A few instances of trashed Airbnb homes aside, the fact that users of sharing economy services are also typically subject to reviews alongside the providers does much to counter the most basic tragedies of the commons. Indeed, most users feel a heightened sense of respect for an individual's property than they do for a corporation. But, if many of us give up ownership of property thanks to the sharing economy, will vital questions of citizenship get lost along the way? It is unlikely that an Uber user is as invested in the questions of public transit and infrastructure as either a traditional car driver or metro user? Even subscription services such as Spotify have a muddling effect because of how it distorts the flow of compensation. When we no longer actively buy goods but merely consume them, we lose the accompanying signal and vote in the marketplace. More curiously, does the democratic veneer of the sharing economy mark an inversion of economic history, in which those now condemned to own assets work for those wealthy enough to wash their hands of them?

For most Millennials saddled with debt and still mediocre economic prospects, the sharing economy is a strictly practical consideration. On this count, it can be judged on its utilitarian benefits alone. But the sharing economy, like any idea, carries with it real cultural consequences. To the extent that its rise is associated with a mindset of breaking free from the worst impulses of our consumer culture, it should be celebrated. But we must also acknowledge that for a generation overwhelmed by choice and raised in an anxious age, the sharing economy indulges our desire to avoid making decisions that demand long-term commitment. If the mindset of the sharing economy is one that decouples our society from the responsibility and inevitability of choice, it risks cultivating a generation of individuals content to be in the passenger seat of their own lives.