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<nettime> mrteacup: The Cult of Sharing
nettime's_oversharer on Mon, 11 Aug 2014 04:01:12 +0200 (CEST)

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<nettime> mrteacup: The Cult of Sharing


   August 5, 2014

The Cult of Sharing

   8,028 words -- thanks in advance for your endurance

   The sharing economy's marquee startup Airbnb recently unveiled a new
   brand identity and positioning to help propel its international
   expansion. Airbnb's new wordmark and logo nicknamed "the Bélo" is said
   to have been the culmination of a year-long process, including a
   cross-cultural analysis to ensure their identity would be understood
   around the world.

   Exhaustive branding efforts are unusual among pre-IPO Silicon Valley
   companies. For years they've leaned on primary colors, gradients and
   rounded fonts, default signifiers of fun and friendliness that negate
   the staid formality of the more conventionally-minded business world,
   attempting no greater meaning than "this is not your father's
   corporation." Even Google only starting taking its brand semi-seriously
   in 2010, six years after it went public.

   In keeping with their self-identity as midwives of emancipation and
   utopia, the industry has historically relied on the form of the
   manifesto over the logo as its preferred vehicle for communicating with
   the public. In works like A Declaration of the Independence of
   Cyberspace, The Cluetrain Manifesto, The Wealth of Networks and Here
   Comes Everybody, writers have found success marketing Silicon Valley in
   populist terms. By conflating political action and market transaction,
   they are able to claim that their products are no mere trifling gadgets
   or mundane information processors, but serve a higher purpose.

   Apple's classic ad 1984 from the same year exemplifies this strategy.
   Its competitor IBM is represented as a repressive authoritarian
   government against whom we could strike a blow by purchasing Apple
   products. This idea has been endlessly imitated with only minor changes
   required to support the industry's later reliance on user-generated
   content and ad-supported business models. Instead of purchasing, the
   new demand that we participate carries even stronger political sounding

   Whatever the benefits to these companies' bottom lines, such a framing
   directs us away from politics. It misrepresents consumer choice as a
   form of empowerment, and turns the market into a field for social
   change. It tells us that public, democratic decision-making is clumsy,
   slow, a boondoggle, incapable of innovation, or an intractable deadlock
   that is best ignored while tech entrepreneurs get on with the business
   of changing the world through capitalism.

   Believing that their work is more significant and important than the
   work of government allows software developers to feel a profound sense
   of agency exceeding that of the president. One software developer at
   Facebook declined to hear Obama speak at his workplace, reportedly
   saying "I'm making more of a difference than anybody in government
   could possibly make."

   But in the last few years, the tide has shifted. Tech companies have
   taken a new interest in advocating for their policy preferences in
   Washington, forming lobbying organizations like FWD.us and The Internet
   Association. The latter bills itself as "the unified voice of the
   Internet economy" and claims to represent both the industry--counting
   Google, Amazon, eBay, Facebook and many others among its
   membership--and their "global community of users." Few trade
   associations are so bold as to claim to have unified the pursuit of
   their financial interests with the values and beliefs of its customers.
   Silicon Valley's unique marketing strategy linking their products with
   a higher purpose makes it sound plausible.

   One such higher purpose often invoked by technology marketing is the
   promise of community. We're told that technology can restore a sense of
   community that modern people have lost, and this can be achieved
   through greater connectivity, collaboration, communication and
   participation brought by digital networks. Such dreams predate the
   internet. Half a century ago, Marshall McLuhan declared that the
   expansion of communication networks would overcome the fragmentation of
   our world and remove the obstacles of time and space that separate
   people from each other. His term global village suggests a sense of
   connection, belonging and intimacy that we presume to be abundant in
   village life but absent in the anonymous modern city or suburb.

   Despite an apparently exhaustive branding exercise, Airbnb's new brand
   positioning doesn't stray far from this basic formula. CEO Brian
   Chesky's announcement of their new strategy carries a clear influence
   from McLuhan:

     Cities used to be villages. Everyone knew each other, and everyone
     knew they had a place to call home. But after the mechanization and
     Industrial Revolution of the last century, those feelings of trust
     and belonging were displaced by mass-produced and impersonal travel
     experiences. We also stopped trusting each other. And in doing so,
     we lost something essential about what it means to be a community.
     [...] At a time when new technologies have made it easier to keep
     each other at a distance, [Airbnb users are] using them to bring
     people together. And you're tapping into the universal human
     yearning to belong--the desire to feel welcomed, respected, and
     appreciated for who you are, no matter where you might be.

   Chesky claims that these communitarian values define Airbnb, and that
   may well be true, but they also define a large number of other sharing
   economy startups. TaskRabbit says its about neighbors helping
   neighbors, not just providing temporary labor, and Lyft wants us to
   think their drivers are just a friend with a car.

   Peers bills itself as a member-driven organization dedicated to
   "promoting and defending the sharing economy" and adorns itself in
   similar slogans and stories from its members about the social benefits
   of the services it represents.

   These services need to be defended because some of the activities they
   facilitate are regulated by city governments, who quite sensibly
   require proper licensing, insurance and permits to run a taxi service
   or hotel. Peers addresses this problem by mobilizing its network of
   consumers and workers to attend city council meetings, sign petitions
   and write to local government officials in support of regulatory

   Peers represents itself as a grassroots organization, but given its
   close ties to startups with billion dollar valuations, its worth
   considering whether it is an astroturf organization? According to its
   executive director, the idea and initial funding for Peers came from
   Airbnb and has received money from other "mission-aligned" executives
   and investors. But on the other hand, real people are signing petitions
   and contacting their elected officials--by all accounts acting like
   citizens. Are we to suppose that all these people have been manipulated
   to act as corporate stooges? If Peers was manipulating its supporters,
   how would it do it? How would it mobilize a global community to
   dedicate itself to this corporate cause?

   What role does marketing play in the construction of communities around
   a business? For a new breed of advertisers like Chuck Brymer, CEO of
   leading agency DDB Worldwide, the answer is a great deal. Brymer
   believes that with the rise of the internet, advertising is moving away
   from the traditional propaganda model of influenced rooted in broadcast
   media, and becoming a dialogue with consumers and among consumers.
   Generating buzz, facilitating interactions among consumers, reaching
   influencers and turning them into brand ambassadors becomes key to
   successful marketing. Their Twitter bio says it all: "Connecting people
   with people, not just people with brands." In the end, says Brymer, the
   Chief Marketing Officer role will evolve into Chief Community Officer.

   Aligning with this philosophy is a book published in 2004 titled The
   Culting of Brands: Turn Your Customers Into True Believers. It was
   written by a former advertising executive who studied how real cults
   recruit and maintain members hoping to teach the tricks to marketers to
   inspire the same kind of fierce loyalty, religious devotion and vibrant
   community around their brands. The book is a manual for achieving
   corporate goals by exploiting consumers' emotions and need for
   belonging, meaning and purpose.

   It achieved only modest reach, but the book is important to
   understanding sharing economy marketing strategies because the author
   is Douglas Atkin. Since 2013, Atkin has been Global Head of Community
   and Mobilization at Airbnb, and Co-Founder and Board Chairman at Peers.
   Already in 2009, Atkin began to apply his cult-branding techniques to
   the political problems facing his clients, co-founding Purpose, a
   consultancy which uses the viral tools of digital marketing to launch
   social and political movements on behalf of paying clients.

   If we want to understand the ideas and strategy behind Airbnb's and
   Peers' marketing, there's no better place to start than by reading the
   book written by the mastermind behind it all. And it is vital that we
   do understand it, because Atkin's method is a dangerous new tool that
   can be used by elites to undermine democracy and manufacture public
   support for their interests.

   The book begins in a defense posture. Atkin, well aware that his
   premise is highly contentious and potentially unethical, asks "Aren't
   cults manipulative, evil organizations intent on exploiting the
   gullible? Should they be a source of insight for commercial gain?"

   His book aims to show that brands satisfy important human desires in
   the same way that cults and religions do, meeting needs of belonging,
   making meaning and making sense of the world. But he sidesteps the
   ethical question in troubling ways. His position is that cults are a
   good thing. They're normal and people join for good reasons, and that
   we should suspend our prejudice. The popular stereotype of cults as
   manipulative, dangerous and even suicidal is true to a certain extent,
   says Atkin, but that's only because only the dangerous ones get all the
   press. All religions began as cults, and contrary to popular belief,
   most cult members are normal, psychologically healthy, intelligent
   well-educated and socially adjusted individuals.

   This is the full extent of Atkin's confrontation with the ethics of
   applying cult techniques, breezing past the most troubling aspects of
   the thesis in less than two pages. His point, such that it is, is
   well-taken. Mainstream society unfairly stigmatizes former and current
   cult members, treating them as damaged goods. But the truth of this
   insight obscures a subtle deflection of our concerns about cults. We
   worry about authoritarian tendencies, manipulation and exploitation by
   the cult leader, his ability to persuade his members to act against
   their best interests. Atkin reframes this as a prejudice against cult
   members, waving away legitimate ethical concerns as if they are all
   simply narrow-mindedness about how unorthodox people choose to live
   their lives.

   We don't need to claim that all cults are bad to ask if it is wise to
   use them as a model for corporate marketing. Cults may be harmless in
   many cases, but when they aren't, the results can be catastrophic. They
   seem to be uniquely vulnerable to corrupt and exploitative people who
   put themselves in leadership positions.

   Atkin is fascinated by why people join cults and what inspires their
   intense loyalty. "Why do they throw time, money, sometimes their
   careers, the regard of their peers, and even their families on the cult
   of belonging?" He interviews a fanatical Apple fan who often couldn't
   afford lunch but always upgraded to their latest computer model because
   he wanted to support the company.

   In the popular imagination, cult members are believed to be mindless
   conformists, but Atkins says nothing could be further from the truth.
   The real key to creating a cult (and a cult brand) begins with
   individuals who feel a sense of alienation. The feeling that they don't
   fit in with society leads them to seek alternatives, a place that they
   can truly call home, until they stumble upon a welcoming group that
   understands them, supports them and celebrates their difference instead
   of rejecting it. This sets the stage for the cult member's
   self-actualization. Interviewing cult members and brand devotees alike,
   Atkin found they express the same feeling of becoming more coherent and
   whole as individuals, true to who they really are and more in touch
   with themselves.

     Cults will flatter you. They will make you feel special and
     individual in a way that you are unlikely to have felt before. They
     will celebrate the very things that make you feel different from
     everyone else; the members will get to know you deep down, and they
     will love you for what they find you. And you will love them.

   So the key to attracting cult-like devotion is healing potential
   recruits' sense of alienation. Although cults are often perceived to be
   taking from their members while giving little in return, cult members
   do receive something of value from the cult, meeting some of their
   deepest desires to become their authentic selves.

   Having determined what motivates cult members, Atkin delivers a
   strategy for brand managers. To attract people who feel different, cult
   brands also have to be different. It's a four step process.

   First, determine your brand's sense of difference. The motorcycle brand
   Harley Davidson cultivates an image of individualism, rebelliousness,
   adventure and a willingness to throw off the constraints of
   conventional suburban life. The brand's official guidelines state:
   "Harley Truth#1: Harley is not for everyone."

   Second, declare your difference, the belief system that set you apart.
   "Framing a clear system of ideas that depart from cultural norms
   provides the sharpest delineation between the organization and the rest
   of the world. And it provides a beacon for the disenfranchised," says
   Atkin. At the same time, cult members must feel a sense of ownership
   over the ideology, it can't just come from the top down.

   Third, demarcate the cult from the status quo by creating symbols,
   rituals, jargon, texts, clothing--a tangible way for cult members to
   live their difference, to mark themselves as apart from the mainstream.
   For Harley Davidson, there is the uniform of the riders, the leather
   jacker; slang; the brand's and Hell's Angels logos; and so on. For
   Atkin, this is the same as Hare Krishnas who avoid eating meat and
   chant mantras, or Mormons who have exclusive access to parts of their
   temple and wear spiritual garments underneath their clothes.

   The final step is demonize the other. For Steve Jobs and the Apple
   cult, it was Microsoft and IBM. For Richard Branson's Virgin Airlines,
   it was British Airways and American Airlines.

   But according to Atkin, establishing a cult brand's beliefs and
   sensibility are not enough. People don't really buy into the ideology
   anyway. As much as brand managers think that projecting a compelling
   system of values to consumers, human interaction is what really gets
   people in the door and makes them stick around. One cult brand,
   JetBlue, obsesses over every interaction that customers have with gate
   agents, check-in personnel, telephone agents and flight attendants,
   ensuring that the brand values of bringing humanity, caring and fun
   back into air travel are reinforced at every point of contact.

   Atkin cites academic studies that support his point of view.
   Sociologists who study the Unification Church discovered that most
   people were brought into the church by forming relationships with
   individuals in the church. New recruits first buy into those
   relationships--the ideology comes later. Research into the Mormon
   church confirms this pattern, showing that individuals with more
   in-group ties to individual church members become more devoted to the
   church and its belief system.

   If a cult is first a community, and then an ideology, it follows that
   fostering social interactions and the formation of ties among members
   of a cult brands is crucial. To build cult brands, businesses should
   build community, and Atkin thinks businesses are well-suited to
   building just the kinds of communities that modern people want: looser,
   more ad hoc communities that require less commitment and where members
   are bound together less because of a shared geography, and more because
   of common interests and ideas.

   Atkin views the practices and structure of the Mormon as exemplifying
   important attributes of corporate brands. To bind the community
   together, the church has created a home visit program that ensures a
   high degree of interpersonal contact between members and is especially
   aimed at new recruits who are most at risk of leaving. They maintain an
   extensive database of contact information to guarantee that no one is

   These home visits are framed as fellow church members coming to see how
   you are, offering to help with any material needs, invite you to social
   events and to share a religious teaching once in awhile. Members are
   visited by fellow community members, not official agents of the church
   coming to preach the doctrine. But nonetheless, the church's true
   motivation is to reinforce its members' belief, knowing that
   ideological commitment comes not from being convinced of the truth of
   certain ideas, but through a sense of belonging to a community that we
   presume does believe.

   Atkin advises brand managers to strengthen the community by instilling
   a sense of mutual dependence and responsibility among cult members.
   It's the key to the success of religions like Christianity, with its
   emphasis on charity; the U.S. Marine Corps, with its doctrine of never
   leave a man behind on the battlefield; and brands like the cosmetics
   company Mary Kay. These have all written the ideals of mutual love and
   caring into their founding texts. Most often we assume that business is
   driven from a sense of individual achievement and competition, but Mary
   Kay abstains from these values, stressing that support and helpfulness
   are its core. According to the founder, Mary Kay Ash:

     everything anyone in our sales organization does to succeed is based
     upon helping others. As beauty consultants, we must help our
     customers; and as sales directors, we must help our people to
     succeed. The company structure requires each person to help others
     in order to succeed. The individual who thinks `What's in it for
     me?' will never make it in our company.

   Community comes first in cult branding, but ideology follows close
   behind. The need to make meaning is part of human nature, says Atkin,
   and the profit motive demands that businesses turn this need into a
   source of profit. And this means creating "values-led" businesses.

     Today's most successful brands don't just provide marks of
     distinction (identity) for products. Cult brands are beliefs. They
     have morals--embody values. Cult brands stand up for things. They
     work hard; they fight for what is right. Cult brands supply our
     modern metaphysics, imbuing the world with significance. We wear
     their meanings when we buy Benneton. We eat their meaning when we
     spoon Ben & Jerry's into our mouths. We get inside a company's
     worldview when we step onto a Virgin plane, we shop their meaning
     when we check out at Whole Foods. Driving a Mini is becoming as
     political as fighting gas-guzzling SUVs via the Sierra Club. Brands
     function as complete meaning systems. They are venues for the
     consumer (and employee) to publicly enact a distinctive set of
     beliefs and values.


   It's a strange kind of logic that claims that we have nothing to fear
   from cult brands because they tap into consumers' real desires for
   connection and community. In fact, that's precisely why we should be
   afraid. Isn't it terrifying to think that brands can reach us at such
   an intimate level?

   What if a corporation went beyond merely providing a product, but tried
   to meet our deepest psychological needs for intimacy, self-esteem and
   love? What if a brand could heal our deepest wounds? Whatever they were
   charging, we'd probably be getting our money's worth. But viewing the
   situation through the lens of consumer rights fails to consider what
   customers would be willing to do for an organization that could provide
   a product that met a need so fundamental.

   In his book, Atkin profiles Anita Roddick, a pioneer of so-called
   ethical consumption. Her cosmetics company The Body Shop was one the
   first socially responsible companies, promising consumers that shopping
   in her stores was an effective way of protecting the environment and
   supporting fair trade labor practices, charity and human rights across
   the world. The company also has the dubious distinction of being one of
   the first companies to have the term greenwashing applied to it. In
   1994, Business Ethics published an expose titled "Shattered Image: Is
   The Body Shop Too Good to Be True?", revealing that virtually none of
   this marketing was true.

   Atkin relates this story as a warning to those who might be tempted to
   deceive the public with feel good marketing slogans that lack any
   underlying commitment. After The Body Shop debacle, Atkin claims that
   consumers are wise to these tricks. He says, "In today's world, the
   faintest smell of hypocrisy from a commitment-based organization will
   surely become a PR debacle overnight." And now with access to the
   internet, it's impossible for consumers to be taken in by deceptive

   But the author of the controversial report, Jon Entine, found that many
   progressives and environmental activists defended Roddick despite
   knowing the truth. Many knew it even before he published his article.
   Entine says "they had willfully overlooked the hypocrisy... because
   they believed her message of social justice was inspiring." This logic
   should strike us as deeply mysterious. How could someone continue to
   believe in The Body Shop brand knowing it is a fraud?

   Slavoj Zizek often recounts a joke that illustrates the strange nature
   of belief: a man believes that he is a kernel of corn and, after
   visiting a psychiatrist, he is eventually cured of his delusion. After
   leaving the psychiatrist's office, he encounters a chicken and runs
   back inside, terrified of being eaten. The psychiatrist asks, "But why
   are you afraid? You know you aren't a kernel of corn!" The man replies,
   "Yes, I know that. But does the chicken know?"

   The joke tells us that it's not necessary for us to directly believe in
   an idea for it to have effects. It is enough that we assume that
   someone else believes. The delusional man in the joke imputed belief on
   to the chicken, and so reacted in the same way as if he himself
   believed. The former Israeli prime minister Golda Meir confirmed this
   principle when, asked if she believed in God, replied "I believe in the
   Jewish people, and they believe in God."

   The true formula of a cult brand is similar: "I believe in the
   community and the community believes in the brand." That's what allows
   you to be inspired by a figure who you know is a fraud: the community
   believes in her, and you don't want to shatter their delusions.

   Atkin claims that the internet solves the hypocrisy problem because the
   truth is readily available. But as he himself notes, cult members
   attachment to the abstract ideology is secondary. Their first
   commitment is to very real, tangible bonds of community, the
   affirmation and sense of belonging that they receive from it. But the
   community is sustained by the mythos of the cult, so a threat to the
   belief system is a threat to the community, which is in turn a threat
   to the cult members' sense of belonging and psychological well-being.

   Cult brand turn out to be remarkably resilient even when its members
   know that it doesn't live up to the ideals. They're not naive, they may
   know the truth perfectly well. But they disavow it, paraphrasing Golda
   Meir to say "I know the brand is a lie. But I believe in the community,
   and the community believes in the brand."

   When marketing executives at "values-led" companies try to cultivate
   communities around ethical consumerism, it creates a new class of
   problems. Much like religious cults, cult brands manipulate their
   customers' emotional and psychological needs and encourage them to
   construct their identities and lives around the brand. The collapse of
   the ideal would be felt as a personal catastrophe for its community, so
   the brand becomes practically immune to criticism.

   We're familiar with the archtype of the brand fanatic who is devoted to
   the company to excessive degree. They go on pilgrimages to the
   corporate headquarters, line up for hours in front of stores to be the
   first to own a ne product, and inhabit online forums where they connect
   with fellow fans and vigorously defend the company against criticism.
   Outsiders might feel vaguely discomfited by such intimate associations
   between customers and a brand, but who are to criticize how someone
   chooses to spend their free time?

   The marketing profession has long coveted word of mouth marketing as
   one of the most effective forms of advertising, and are surely
   delighted by an enthusiastic fan base who are readily converted to an
   amateur sales team. But what if their ambitions went beyond increasing
   sales? The community can be relied on to defend the company against
   competitors, and even bad PR. Could a devoted fan base be convinced to
   lobby their political representatives, perhaps to help remove
   regulations that stand in the way of the company's goals?

   With Atkin behind it, it's no surprise that Peers closely follows the
   cult brand formula laid out in his book. The voice-over in their
   promotional video tells us that "as peers, we're building the sharing
   economy, a new economy with humanity at its center and community at its
   core." The brand's difference is rooted in the notion of sharing, a
   concept that has become increasing vague as its definition has been
   expanded, departing from our common understanding of the term and now
   comes into include fairly conventional financial transactions between

   Promoters of the sharing economy apply the term to a wide range of
   transactions: renting out your clothes, electronic devices, kitchen
   appliances, household tools is considered sharing. So is selling your
   time to strangers to do their laundry, clean their houses, drop them
   off at the airport, cook them a meal, watch their kids, help them with
   their homework or teach them a new skill. Startups that allow users to
   lend their money with interest to other users are also included in
   lists of sharing economy companies.

   Much of what counts as sharing turns out to be nothing more than
   ordinary economic transactions between individuals arranged through
   digital platforms owned by venture-funded companies that act as
   middlemen, enabling them to take a percentage off the top.

   But digital platforms that enabled community members to connect and
   share existed before venture capital arrived on the scene. Websites
   like Couchsurfing allowed people to open up their homes and couches to
   travelers from around the world. But no money changed hands. The
   benefits were strictly non-economic: meeting new people, experiencing
   new cultures and so on--true sharing in the conventional sense of the

   It's tempting to conclude that the transformation of "sharing" is a
   corruption of this early ideal, that startups are trying to pull the
   wool over our eyes by misrepresenting the interactions on their
   platforms as non-economic. But I believe this conclusion is mistaken,
   and also misses something quite important.

   None of the users of the new profit-driven services are under any
   delusion that they are transacting with others--the term sharing
   economy even highlights this fact. What's crucial to realize is that
   proponents of "sharing" are reinventing our understanding of economic
   relations between individuals so that they no longer imply
   individualism, greed or self-interest. Instead, we're led to believe
   that commerce conducted on their platforms is ultimately about
   generosity, helpfulness, community-building, and love.

   It's what enables TaskRabbit to claim that hiring a stranger to do your
   laundry, perhaps for less than minimum wage, is really about "neighbors
   helping neighbors," as they put it. The company's mission is to
   "revolutionize the way people work -- by redefining what it means to be

   It's also why Etsy is often included in lists of sharing economy
   startups. Unlike non-sharing economy companies like eBay and Amazon who
   provide essentially identical ecommerce services to sellers, Etsy
   qualifies because, according to its promotional material, "[the
   company] is more than a marketplace: we're a community of artists,
   creators, collectors, thinkers and doers." Their mission is "to
   re-imagine commerce in ways that build a more fulfilling and lasting
   world... a new kind of company that uses the power of business to solve
   social and environmental problems."

   The marketing of almost every startup in this space is saturated with
   this mood. Lyft's "Community" video features wistful riders and drivers
   expounding on the benefits of the ridesharing service over the sound of
   a dreamy glo-fi beat. "Instead of just having a company come and pick
   you up, you're having a person come pick you up," says one rider.
   "There's something about getting a Lyft that just puts you at
   ease--because this is a person that's just like you," says another.
   "You're not just driving them around, you're a friend first" agrees a
   third. "I love being someone they can depend on. I'm basically a buddy
   with a car," and "It's a great way for people to get to know each other
   in a way that they can help each other as well."

   Sharing economy investor and author Rachel Botsman says "At its core,
   it's about empowerment. It's about empowering people to make meaningful
   connections, connections that are enabling 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."

   Chip Conley, Airbnb's new Head of Hospitality and founder of the
   boutique hotel chain Joie de Vivre, has a similar vision. At speaking
   engagements like TED and Whole Foods CEO John Mackey's Conscious
   Capitalism conference, he promotes the idea that businesses can profit
   by becoming venues for self-actualization and emotional connection for
   employees and customers.

   Atkin himself claims that the sharing economy "is about much more than
   just making ends meet. At Airbnb, we are creating a door to an open
   world--where everyone's at home and can belong, anywhere." What
   motivates hosts to open their homes to strangers? The company produced
   a video called Airbnb Hosts: Living a Richer Life where we learn that
   yes, it's about money--but not greed. The extra income helps hosts
   pursue very relatable goals: to follow a passion, save for their
   wedding, free up time to spend with their children and secure their
   retirement. But there are also non-monetary rewards like seeing the joy
   in their guests' faces and helping them realize their travel dreams.
   Nalin, an Airbnb host from New Dehli explains "Nothing gives you joy
   like making someone happy. That is, I think, the reason that motivates
   me to be a host... The presence of a guest here is that you treat them
   like your family."

   In June 2013 at a technology conference in London focused on the
   sharing economy, Atkin announced the formation of Peers to a hall
   filled with fellow executives and investors, asking for their support
   and funding but not letting on that he was anything but an observer.
   Atkin repeats the standard line about community and connection, but
   also claims that the sharing economy has a redistributive function:

     We literally stand on the brink of a new, better kind of economic
     system that delivers social as well as economic benefits. The old
     system centralizes production, wealth and control... the peer
     sharing economy is a new model that distributes wealth, power and
     control to everyone else. Best of all, the very things that have
     become the casualties of the old economy--things like economic
     independence, entrepreneurialism, community, individuality,
     happiness--it's actually built into the very structure of this new

   The various startups, investment funds, media outlets and nonprofit
   advocacy organizations shout from the rooftops that their new, improved
   version of communitarian capitalism will heal what ails us. Although
   they couch the message in terms designed to appeal to political
   progressives, there's nothing about the services themselves that
   prevents them from being attached to a completely different set of
   values. For example, John Stossel, a noted libertarian and TV host on
   Fox News, has championed Airbnb's fight against what he believes is big
   government regulation keeping the little guy down.

   The conservative news sites Human Events published a column praising
   the sharing economy for relieving the burden of following employment

     it's an end-run around the increasingly expensive, heavily mandated
     and regulated business of hiring employees. As the burden on labor
     increases, creative fee-for-service arrangements become appealing
     alternatives to expensive, traditional "jobs." It's the next logical
     step after the large-scale transition of the American workforce to
     part-time status.

   A senior fellow at the right-wing Cato Institute voiced his support for
   Airbnb in their battle to roll back New York City hotel tax, rent
   control and zoning laws:

     New York State Attorney General Eric Schneiderman, however, is
     challenging the entrepreneurial innovation--probably under pressure
     from special interests who would like the government to stifle their
     competition. This is crony capitalism as usual... Cato has long
     supported free markets, entrepreneurship, and innovations to make
     goods and services more affordable. Government overreach like
     [Attorney] General Schneiderman's campaign punishes not only AirBnB
     hosts and travelers, but also the New York economy...

   Another senior fellow at Cato argued that the sharing economy's use of
   reviews to control service quality means that the rationale for
   government regulation disappears. The following comment was made in the
   context of the limo service Uber, but could apply to many other

     "The app's review system makes it easy for the company to monitor
     driver quality without demanding too much effort from passengers...
     Which means the question isn't whether the regulations need to be
     updated to accommodate a new kind of cab service: It's why this kind
     of service needs a regulator at all.

   The well-known Republican operative and future Burning Man attendee
   Grover Norquist recently weighed in, arguing that progressive's
   ideological confusion over the regulatory issues facing the sharing
   economy is an opportunity for Republicans to take back control over
   major cities which are traditional Democratic strongholds.

   The existing sharing economy values are designed to appeal to
   progressive liberals. It seems that there are very few "values-led"
   businesses which are designed to appeal to conservative values,
   suggesting that progressives are uniquely seduced by the view that
   capitalism is an effective tool for promoting their values and
   effecting political change. But it wouldn't be difficult to invent a
   much more Republican-friendly brand for the sharing economy. In his
   speech at LeWeb before a group of investors and internet entrepreneurs
   quoted above, Atkin leaned in that direction, departing just slightly
   from the values of caring and connection that usually dominates and
   also stressing the values of autonomy: independence, individualism and

   We could move even further in this direction, rebranding the sharing
   economy as new movement that liberates individuals from the tyranny of
   the collectivism found in regular work, freeing them to become captains
   of their own destiny so they can pursue their self-interest by becoming
   small-scale entrepreneurs all while thumbing their nose at big
   government regulation. Brian Chesky, CEO of Airbnb alluded to this
   potential when he said to a group of Airbnb hosts, "There are laws for
   people and laws for business, but you are new category: people as

   But beyond the marketing, if people like Douglas Atkin, Brian Chesky
   and Rachel Botsman get their way, and the sharing economy as it is
   currently constituted expands dramatically to where a significant
   fraction of services are delivered using their business models, it will
   have serious negative long-term consequences for the people in their
   communities, and for all workers.

   Sharing economy companies most often classify the people who provide
   services on their platforms as independent contractors--they are
   considered to be self-employed, not regular employees. At the end of
   each year, thousands of these contractors receive a 1099 form and their
   income is reported to the IRS. Since navigating the rules for filing
   self-employment taxes is not very straightforward, Rachel Botsman's
   Collaborative Fund created 1099.is to help contractors understand their
   obligations. They say that the purpose of the site is "to try and help
   you to understand your taxes in the Sharing Economy."

   It turns out that employee classification is an important issue, and
   has some significant implications for both employers and employees.

   The Department of Labor runs a program to go after companies who
   practice employee misclassification, a term used to describe companies
   who misrepresent their full-time employees as self-employed independent
   contractors. Because companies must pay more taxes for employees than
   contractors, the IRS and state tax agencies crack down aggressively on
   employee misclassification, treating it as a form of corporate tax
   evasion. To get a sense of the scale of the problem, the Government
   Accountability Office estimated that in 2006, $2.72 billion in federal
   taxes was lost by misclassifying employees.

   The Department of Labor is also involved in investigating these cases
   because some employers try to avoid compliance with the provisions of
   the Fair Labor Standards Act and the National Labor Relations Act by
   misclassifying their workers. These laws give workers a host of
   benefits: the right to be covered by minimum wage laws, the right to
   overtime pay, the right to have employers pay social security,
   disability and unemployment insurance taxes, the right to family and
   medical leave, workers' compensation protection, sick pay, retirement
   benefits, profit sharing plans, protection from discrimination on the
   basis of race, color, religion, sex, age or national origin, or
   wrongful termination for becoming pregnant, or reporting sexual
   harassment or other types of employer wrongdoing.

   Workers classified as independent contractors are entitled to none of
   these benefits.

   On it's website, the Department of Labor says that "Business models
   that attempt to change or obscure the employment relationship through
   the use of independent contractors are not inherently illegal, but they
   may not be used to evade compliance with federal labor law." That could
   mean that sharing economy startups are legal, but one former Lyft
   driver has filed a class action lawsuit against the company charging
   them with employee misclassification.

   Whether the suit succeeds or not, the phenomenon of employee
   misclassification indicates that employers have strong financial
   incentives to use independent contractors, even when it is illegal. A
   study showed that on average, misclassification allows employers to
   save $3,710 in taxes for workers who earn $40,000 a year, and witnesses
   testified to Congress that the labor savings of misclassification have
   allowed federal contractors to lower their bids by 20-30%.

   The Obama Whitehouse has moved aggressively to combat this form of
   corporate misconduct, endorsing the Fair Playing Field Act and the
   Employee Misclassification Prevention Act, laws that require employers
   to inform independent contractors that they have the right to contact
   the IRS to have their status reviewed if they believe they have been
   misclassified, increase penalties for violators, closes a tax loophole
   that allowed FedEx to dodge a $319 million bill for back-taxes owed
   when the IRS determined it had improperly classified some of its
   drivers, and makes infringement into a federal violation of labor laws.
   Obamacare also increases penalties for businesses who misclassify their
   employees to avoid triggering the requirement to provide health
   insurance if they have more than 50 employees.

   When Human Events says that the sharing economy allows employers to do
   an "end-run around the increasingly expensive, heavily mandated and
   regulated business of hiring employees," this is what they're talking
   about. Silicon Valley entrepreneurs have created businesses that
   provide contract labor not covered by the federal regulations that
   employers find so burdensome. As Uber general manager Ilya Abyzov put
   it, "A driver contracting with Uber is not a bona fide employee." The
   sharing economy is really the 1099 economy.

   What would happen if the dreams of the investors and executives at
   these startups came true, and large parts of the economy became
   dominated by their business models? Employers that hire full- or
   part-time workers today--paying them minimum wage, overtime and
   unemployment, disability and social security taxes, and unable to
   discriminate against them--would switch to a cheaper, less regulated
   and more vulnerable workforce to do those same jobs. Having lowered
   their labor costs, they're able to offer lower prices to consumers,
   forcing their slower competitors who rely on regular wage labor to
   adopt the same practices or go out of business.

   Today, its illegal to misclassify your employees as independent
   contractors. Companies risk fines, penalties and lawsuits if the IRS
   and Department of Labor find out. But in a few years, with a little
   Silicon Valley internet magic and a politically mobilized community
   bound together with the ideology of sharing, it will soon be possible.

   So it won't come as a shock to learn that venture capitalists have
   poured $600 million into sharing economy startups--the potential for
   profit is truly massive. Nor should we be surprised that taxi unions
   and hotel unions are on the streets protesting against these companies,
   and right wing thinks tanks, pundits and media outlets are lending them
   their support.

   This makes sense--it fits with our understanding of whose interests are
   served by these new business models.

   The only people who are confused about where they stand are sincere and
   well-meaning progressives. Many of the young leaders of Peers have
   impeccable credentials, having previously worked for liberal
   organizations like MoveOn.org, Organizing For America, the Sierra Club,
   the Democratic National Committee, Obama's re-election campaigns, the
   Obama Whitehouse, and a host of other community, environment and
   sustainability organizations.

   These progressives are unconcerned that investors stand to profit
   immensely because they're convinced that capitalism, especially one
   with a friendly human face, can be a force for good. They delight in
   the warm community spirit of neighbors who do each others' laundry,
   drive each other to the airport and take care of each others' children.
   If propagating these peer-to-peer interactions between workers and
   consumers requires lining the pockets of billionaires and weakening
   protections for workers, the promoters of the sharing economy feel that
   it's a reasonable tradeoff.

   That's because they've adopted a kind of cultural critique of
   capitalism. For them, the problem with capitalism is not the system
   itself, but rather depraved contemporary Western culture, which is
   greedy, individualistic, selfish and acquisitive, and rewards greedy,
   corrupt, ill-intentioned individuals. The opponents of the so-called
   culture of greed see the behavior of Black Friday shoppers and Wall
   Street bankers as equal manifestations of the same general phenomenon,
   and perhaps believing that we get the leaders we deserve, conclude that
   the public's moral flaws makes them in some way responsible for the
   greed of Wall Street.

   The sharing economy is clearly not the kind of economy where wealth and
   prosperity is shared between rich and poor. On the contrary, it worsens
   income inequality and concentrates wealth in the hands of those who
   need it the least. Progressive advocates are well aware of this, but
   they also see an upside: these startups teach their workers moral
   lessons about sharing, community, giving and service with a smile.

   Ariane Conrad represented this side of the sharing economy movement in
   her talk at TEDxBerlin "Zombies into Neighbors". She played for the
   audience disturbing footage of an incident in 2011 when a toddler who
   was run over twice and then ignored by 18 passers-by as she lay by the
   side of the road, and claimed that this tragedy is a symptom a
   dysfunctional lack of community spirit and mutual caring in society, a
   logical extension of less extreme acts like failing to pick up litter
   in a public place, give money to a homeless man or help an elderly
   woman board a bus.

   In Conrad's view, we justify our lack of civic virtue in two ways:
   either we don't have the time or money to help, or we don't think we
   have the responsibility. She calls these two attitudes scarcity and
   greed, and finds their roots in the today's cut-throat economic system.
   This is a reasonable connection, but Conrad somehow concludes that the
   sharing economy offers a solution, saying "To me, the great potential
   in this new economic model is that it rewards the better parts of human
   nature--not the greed, the self-centeredness, the selfishness, but the
   kindness, the empathy, the generosity... To me, the most exciting part
   is sharing responsibility for each other and for these places in which
   we live."

   If we accept the highly dubious notion that paying a stranger to drive
   you to the airport is a profound gesture of empathy and responsibility,
   maybe this is true. But only if we consider the users of these
   platforms. If we turn our attention to the owners, we find tremendous

   In The Culting of Brands, Atkin provides four steps for creating a cult
   brand. Peers and the sharing economy in general have followed that
   formula perfectly. A cult brand must determine their difference with a
   distinctive ideology, then declare it to the world. As we have seen,
   the tireless efforts of its thought leaders in books and TED talks,
   sharing economy leaders promote a new compassionate capitalist ideology
   that promises to cure us of our feeling of alienation and reconnect us
   with our friends and neighbors, often depending on nostaglic images of
   an imagined past before the existence of big, impersonal corporations.

   The third step is demarcating the cult from outsiders, marking its
   difference through symbols and rituals. When riders get into a car
   driven by a Lyft driver, they fistbump, an authentic gesture of
   friendship that enhances the feeling of belonging, so naturally Lyft
   makes it a part of driver training. Airbnb offers its hosts hospitality
   training to teach them how to add a personal touch to their
   interactions with guests so that they feel like family.

   Peers has created the Dinner With Peers program, a potluck dinner that
   brings together fans and participants of the service to connect with
   each other. The emphasis on interpersonal connection reinforces the
   communitarian brand values, but it also serves to recruit more people
   into the cult. Atkin advises following the strategy of the Mormon
   church: the key to creating devoted membership is social contact with
   other members--the deeper the relationships with others, the greater
   the devotion to the cult. Keeping tabs on all the members, which Peers
   does through its petitions and membership drives, is also important,
   and members run the program, just as Atkin suggests. Their marketing
   materials constantly stress that "Peers is a member-driven

   Atkin's fourth step is demonize the Other. For Apple fans, the Other is
   Microsoft, jetBlue fans demonize older airlines like United and Delta,
   and we don't have to look far to see who this Other is for fans of the
   sharing economy. It's the "old economy," the bad kind of capitalism
   that emphasizes consumerism, selfishness and enjoying ourselves over
   the supposedly good kind of capitalism that embraces virtues of work
   (figured as a kind of love and self-sacrifice), giving, sharing and

   The fact that this is an intangible Other is even better. Atkin tells
   us "Intangible demons can allow a cult or brand to dramatize threats
   that have no time limit on them." But in its more politically-minded
   mood, the cult of compassionate capitalism has more tangible enemies:
   what they call "entrenched interests" like the hotel and taxi
   industries who supposedly threaten their community.

   What Atkin has achieved with Peers is remarkable. He's captured the
   imagination of his target audience, joining the ranks of other
   successful cult brands like Apple, Harley Davidson, Saturn, jetBlue and
   Snapple, and also tapped into his members' need for meaning and purpose
   in their lives, creating for them a values-based brand like Ben &
   Jerry's, The Body Shop and Whole Foods.

   The question that's usually posed about values-led brands is about
   greenwashing: whether they walk the walk, or like The Body Shop, just
   talk the talk. But the consequences of this kind of hypocrisy are
   rarely very serious. Consumers who spend their money with companies
   that rely on false eco-friendly marketing may feel defrauded, but the
   impact on the environment is probably no worse than if the brand didn't
   exist at all.

   The marketing of the sharing economy reveals a more serious threat.
   Using consultancies like Purpose, a company can create and build a
   community around a values-based brand that is much more than just a
   marketing strategy--the community can also be mobilized into a
   "grassroots" political force that will advocate for corporate

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