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Rajan: The ‘Sharing Economy’ Is Here to Stay (Opinion)

CALinnovates chief evangelist Kish Rajan, former director of the Governor's Office of Business and Economic Development (GO-Biz), explains why growth in the personal enterprise sector is a good thing.

I recently was a guest on a cable news show to discuss politicians’ attitudes toward companies like Uber, Airbnb and TaskRabbit. On this occasion, MSNBC’s Chris Hayes got particularly heated when I brought up the “sharing economy.” He shot back, insisting the name is misleading: “No one’s sharing anything. People are just selling things a different way,” he said.

Hayes isn’t the first person to make this claim, and I don’t completely disagree with his semantics. But I prefer to use the term “personal enterprise economy” to describe the new paradigm. Why? The substantive criticism is that rideshare drivers and home share hosts aren’t sharing their assets; in reality, they’re selling them. Point conceded, happily.

It’s called entrepreneurship, and that’s why this new personal enterprise economy is so exciting. Powerful new technology platforms are empowering regular people to become the CEOs of their own enterprises — marketing and selling their assets and talents to a global marketplace heretofore out of reach to the average person. Until now, global markets were the exclusive domain of companies with the resources and capacity to reach those markets. Technology is transforming that, opening up a new world of opportunity to everyday people. See the marketing consultant in Los Angeles using video conferencing to sell her services in Beijing. Consider the baker in Fresno selling his cookies to the customer in Brazil.

The realities of work have changed, and to pretend that we can go backward to a more nostalgic time is fanciful thinking. We need to change the way we think about work and how we can empower individuals to define it for themselves. Think of the Uber driver in Sacramento, converting her idling car and idle time into far more than spare change. Rather than suffering through a debilitating slog to land that increasingly scarce, full-time job at a big company — only then to be confined to a cubicle — she is instead taking charge of her own value and selling it on her schedule and as part of her personal work plan. Uber says 51 percent of its drivers spend fewer than 15 hours per week behind the wheel. The remaining hours might involve other ventures and pursuits, both professional and personal. And that’s the point: It’s up to them.

Not to be outdone by rideshare companies like Sidecar and Lyft, Airbnb’s hosts are sharing and selling. There are stories all over the world about people who have made lifelong new friends by sharing — as in, inhabiting at the same time — someone’s home through the use of an online platform. In addition to the social impact, there’s a huge economic impact as tourism dollars stay local. For instance, in San Francisco, 72 percent of all Airbnb properties are outside the core hotel district and 85 cents out of every dollar stays local, according to Airbnb. That means tourist spending occurs at small businesses in neighborhoods that otherwise might never get to share in the tourism economy. Here again, technology is spreading the wealth beyond the hands of the fortunate few.

This new paradigm, of course, raises valid policy questions about wages, benefits, and employee and consumer protections. How do we ensure fairness and equity? How do we avoid exploitation? What’s government’s role? All important matters that the Legislature should explore. But the bottom line is that the personal enterprise economy is creating new opportunities for entrepreneurial individuals who want their share of the dream under their own terms. Semantics aside, we are on the brink of an exciting new era of economic growth, and that is excitement we should all share.

This commentary is published in the Winter 2015 issue of Techwire magazine.

Kish Rajan is chief evangelist for CALinnovates, a nonprofit technology advocacy coalition.