This week, we speak with Arun Sundararajan, professor at NYU’s Stern School of Business, and author of The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism.
Sundararajan is fascinated by how digital technologies shape the economy and is in the process of transforming employment. We discuss how early companies such as eBay, craigslist, Amazon and Wikipedia have “digitized trust” – early reviews of people and services were the predecessor to modern sharing platforms, and the Infrastructure/Digitization of Trust.
These have now become enormous economic factors: AirBNB has three times as many listings as Marriot has rooms; more than a million people stayed at an AirBNB last night, up from 150,000 a few years ago. We talk about how the complacency of the entrenched taxi industry led to the success of Uber and Lyft.
Crowd-based capitalism and crowdfunding are supplementing traditional financing models. Between 2009 and 2015, nine million people pledged $2 billion for hundreds of thousands of projects on Kickstarter.
We also discuss “underutilized capacity and shareability” — there are 80 million power drills in the US and each power drill is used on average a total of 13 minutes over its lifetime. Cars spend most of their time parked, doing nothing. Spare rooms sit empty, couture dresses hang forlornly in closets, etc.
Sundararajan discusses the Gig Economy: The 53 million freelance workers in America have one in four working part-time to supplement income from their regular jobs. Sharing economy will see greatest gains going to lower income households disproportionately as consumers switch from owning to renting. These and other services (Getaround, Zip Car, Drivy, Rent-the-runway, StyleLend, etc.) raise interesting questions about ownership of goods and property in the future.
You can hear the full interview, including our podcast extras, at iTunes, Soundcloud + Bloomberg. All of our earlier podcasts can be found at iTunes, Soundcloud and Bloomberg. (Please send your suggestions for future topics to MIBPodcast at Bloomberg dot net).
All of Sundararajan recommended books discussed can be found after the jump.
Next week, we speak with William McNabb, CEO and Chairman of the Vanguard Group.
Books recommended by Arun Sundararajan