I spent this a good part of last week at one of my favorite conferences of the year — Fortune’s BrainstormTech conference. The conference brings together executives from the Media, Technology and Information Services sectors to discuss the state of the industry and various tech trends. Every year I feel like I come away with new ideas, realizations and my head spinning.
During the event, a striking contradiction hit me square in the face. It wasn’t explicitly stated and I’m not sure if others are talking about it. But, it has my wheels turning.
The shared economy is likely to widen the divide between the uber (pun intended) wealthy and everyone else.
As I listened to John Zimmer, President of Lyft, talk about the shared economy, pointing out that the average individual in the US spends $9000 per year to own a car and only uses it 4% of the time and promoting Lyft’s new subscription service, my wheels began to spin. This lack of efficiency, he claimed, provides Lyft with an enormous opportunity to lower the cost of transportation for the individual.
That sounds wonderful, on the surface. And, in many ways, noble. Making transportation more affordable and convenient is a good thing.
The lack of efficiency in personally owned goods – whether cars, homes or bikes – is the driving force behind the shared economy and the absolutely HUGE valuations that these software driven ecosystems are creating. The concept goes that instead of owning your own vehicle, bike, or whatever other asset is natively “inefficient”, you should be able to “micro lease” access to someone else’s (and, increasingly, some business’s) instead.
As we have all learned, whether in economics class or from reading Rich Dad Poor Dad, asset ownership is key to growing wealth. In fact, applied personally, while our family may not use either one of my cars more than 4% of the time, the fact that I own it outright puts me in a camp of paying far less than the $9000/year referenced.
Yet, as a society – and especially within the tech industry – we are generally disturbed by the widening gap between the haves and the have nots. Rightly so. There is something about extreme and greedy capitalism that we need to get into check. Yet, I also wonder if we’ve even begun to think through the ramifications of our infatuation with the shared economy. Here we are promoting this new business model that at first blush seems to me that it will only widen the wealth gap in America.
What is the Tech industry’s responsibility? Should we sponsor a study on the potential impact? Should we take a step back from our wildly successful business ideas? Should we push forward and find new ways to gain efficiency that also share the wealth with the consumer? Perhaps we should prefer business models that allow technology companies to act as a broker, but, leave asset ownership in the hands of various consumers. Perhaps we should even promote and asset efforts for these very consumers to acquire assets.
I don’t know. And, I don’t even know whether my initial gut is right. I have a lot of thinking to do about this new found realization. But, what I do know is that in a world where Tech is wrestling with the ethics that surround artificial intelligence, privacy, security, and so many other issues, it may be time to add one more potential dilemma to the stack. Let’s think about it before it becomes another “techlash”.