08/09/2015 5:36 AM AEST | Updated 15/07/2016 12:51 PM AEST

Sharing Is Not Caring

The train wreck I see coming if you take the shared economy to the max will be people competing in a saturated market place with ever-more-diminishing returns.

Aurelien Meunier via Getty Images
PARIS, FRANCE - JUNE 26: French taxis drivers on strike for the second day protest against the UberPOP application on June 26, 2015 in Paris, France. The taxi drivers ask for the removal of the application and the shutdown of the Uber drivers in France. (Photo by Aurelien Meunier/Getty Images)

I have driven a taxi cab for three decades now, not that it did me any favours. Note 'driven', not 'owned' or 'operated'. I loved my passengers and having my finger on the pulse but at this stage of the game I am not able to earn a sustainable wage from driving anymore.

Then I hear the criticism of the service delivered by far too many punters sitting on my back seat bemoaning the meter ticking away. Their solution is easy, comes via a smartphone and is called Uber. It's the shared economy, a buzzword that has become the darling of politicians who look for a new "wow" factor whilst enduring the frustration of being in opposition.

When I look back on other economic ideas that have popped up over the years, being pursued and practised in the name of "being good for the consumer", my bullshit detector honing in on the shared economy is rising to a dizzy height.

Demutualisation of companies was endorsed by bringing better prices to consumers. Many company directors and shareholders cashed in big on this trend but what about the cheaper prices all of us were looking forward to? Have you seen your insurance premiums or utility bills lately?

The next piece of economic progress was Globalisation. The benefits for us were that manufacturing was to be outsourced to emerging countries so that we live the life of Riley specialising in intellectual property and the service economy. So how has that worked out for us? All I've noticed was the loss of industry and jobs. When I then see my money spent on a cheap television finding its way back into the country to buy hard assets I am not too sure if this concept has fulfilled its promise.

So now we have the shared economy, but what does that actually mean? Uber and Airbnb are only the start with many more smart concepts finding their way into the market place via technology. Why go to a licensed mechanic when a person next to you is handy with a tool set. Dry cleaning needs to be done? Someone in your street will do it for you. My brother in law is handy with a wrench and a pipe if you need a plumber.

The list is endless, private parties offering their services at the cost of established operators to scratch out a living. What Uber and Airbnb have shown is that legality, insurance or regulation is an obstacle we are prepared to overlook in the name of a cheaper price.

But what about the end result, the flooding of a market place with competing parties?

The train wreck I see coming if you take the shared economy to the max will be people competing in a saturated market place with ever-more-diminishing returns. This will lead to even more untrained operators taking the place of the disillusioned, whilst accredited and established businesses have gone bust.

Service levels will be substandard, the only winners being the go between in the transaction who are the technology companies. The one thing they will certainly deny is the adequacy for services delivered since it's not their responsibility.

The question I ask is why are we so happy to engage in a race to the bottom when quality or a guarantee of anything never came with a cheap price tag attached. Good services or products never competed on that principle because it can't be done.

Maybe that is the debate we should have with the politicians who think of the shared economy as the best thing since sliced bread.