The Power of Peers Inc: a Q&A with Robin Chase

Robin Chase is a collaborative consumption pioneer whose work in the field predates even the term “sharing economy.” As co-founder and the first CEO of Zipcar, the largest car sharing platform in the world, Chase helped usher in the era of putting idle assets to work. Her continued work in the transportation field includes co-founding Buzzcar, a peer to peer carsharing service in France (now merged with Drivy), and GoLoco, an online ridesharing community. Currently she is on the boards of Veniam, the World Resources Institute, and Tucows.

Her new book, Peers Inc, is an overview of the collaborative economy and the transformative effect it has on capitalism and life as we know it. In the book, Chase argues the importance of combining people power (Peers) and corporate power (Inc) to release a “potent creative force.” With its optimistic, big picture approach and insider’s perspective, it has been described as the first great book about the sharing economy.

Shareable spoke with Chase about the future of the collaborative economy, what sharing giants such as Uber and Airbnb need to do now that they’re well-established, the importance of utilizing commons of all kinds, and how taking the Peers Inc approach to climate change is our best chance for survival.

Shareable: There’s a lot of talk about the real sharing economy—how companies and organizations are, or are not, concerning themselves with social justice and economic equality. In Peers Inc, you pull back and give a broader view of a unified movement to put excess capacity to work, in whatever form that might be.

Robin Chase: I’d like to take out the word sharing. People are getting really caught up on the meaning of that particular word: Is it sharing or is it not sharing? The meaning of the word sharing takes on a new angle if we realize that whenever we are using excess capacity, we are in fact sharing, because you are not in control of the asset. In effect, every time we leverage the excess capacity found in an asset, or time of day, or networks, or data, we are sharing something.

We have an opportunity to convince business and government that sharing—with its resource and financial efficiency—adds value. I like this from both a physical resource perspective—using few things more efficiently is much more sustainable—but also from an innovation perspective. When we open up assets and invite lots of people to participate and think about how to use them, we’re getting many more ideas about how to find value. By opening up assets like patents and copyrights, we let innovators uncover new ideas, new markets, and new value. So many new ideas we haven’t ever thought of before!

We feel scarcity today because we insist on owning assets that we don't use well, and closing ideas and opportunity down. We’re leaving so much value on the table. The more assets we put into common pools, the less scarce they become.

You write about commons pioneer Elinor Ostrom in Peers Inc. How has her work affected you and your work?

I downloaded her Nobel prize acceptance speech. She said the last 30 years of her career had been researching and studying successful commons that did not experience the tragedy of overuse and abuse. Elinor described common pool resources—huge swaths of pastureland and watering holes—as places where it was difficult to exclude people and in which the participants depended on the resource for their economic livelihood. Today, we see that Google, Twitter, Airbnb, Lyft—all of these platforms—are in fact common pooled resources. I found that the Eight Principles for long-lived healthy commons that Elinor developed apply well to these new platforms. Key among her principles is that the individuals that are reaping the economic benefits are the ones that get to make the rules that govern the commons (and thus the platform).

There is a time and a place for everything. In the book, Peers Inc, I talk about when a company has developed a widely adopted, successful platform, it’s time for them to share power with the Peers if they want to keep their ecosystem healthy.

You write about these mature platforms ideally reaching power parity, a balance between institutional and distributed power. The imbalance of power with some of the sharing giants (en route to becoming monopolies) is big news these days. Do you see mega, Peers Inc companies surviving, or do you think it’s essential for them to shift more power to users in order to survive?

As discussed in the previous question, Elinor Ostrom would predict that companies that don't share power with their collaborating peers won't survive in the long term. But, that doesn't mean that in the near term, monopoly power won't be felt and exercised. Lots of people wish that platforms could be created "by the people."

This is a laudable idea, but it feels naive to me. It costs a lot of money to build a successful platform. How much money was spent before Uber and Airbnb broke even? It is not just in the millions of dollars. It is in the tens of millions, or hundreds of millions of dollars.

Can coops do this? For me, it comes down to the earliest stage. When you’re in the early stage, before you have been proven to be successful, coops don’t have the money, and they spend a lot of time discussing process and rules. Democracy in the early days slows it all down. Successful platforms are not democratic in their early days. The founders make and guide the decisions and move forward quickly, and, in the case of many for-profit startups, they have significant resources to play with.

People talk about Mondragon and the [Seikatsu Club] Japanese food buying club. If you go back to their earliest incarnations, they weren’t democratic. They were built by one man or one woman who built it and financed it as a traditional business, and later turned them into employee-owned cooperatives.

There’s a lot of legislative jostling going on right now as cities take on Airbnb and Uber, with very real concerns. How do you see this playing out in the long run?

If we look at the laws that exist at the city, state and federal levels, some of them are fantastic and we agree with them: protect public health; owners of cars should be well-insured and cars should be safe to drive; we don’t want people trapped by fire in buildings. So one appropriate category of laws are those that protect the public good. But there are many other regulations that are outdated, and many laws are created to protect the incumbents. Those laws don’t make any sense.

In most states, we require that cars be inspected yearly. No one is driving around in an unsafe car. Why do we need a new certification for cars using peer-to-peer platforms?

However, if we talk about employment on these platforms, we do need a whole new set of rules to apply to workers who are not full-time employees and who earn their income in a shifting variety of ways. Governments have spent the last hundred years making our social safety net and our workplace rules and our tax codes align with one full-time job. But that is not where the future of employment lies.

I like the idea of creating a third path for new economy workers, in addition to W2 employees and 1099 workers. What I like about the third path is that we can avoid arguing about whether the future holds more W2 (full-time) or 1099 (part-time) work. Those distinctions and employment that conforms to those ideas can keep going on. Let’s also create a new path, a third way that protects people working several jobs simultaneously on the common pool platforms. We need to make sure to bring workplace rules about safety and hours of work, as well as health care, workers compensation, [and that] retirement funds also are available to workers who are opt-in and not formally anointed as employees.

Even though we know that people are voluntarily agreeing to work in this new way, we need this third path. We know that humans are just not wired to do difficult calculations or consider the very long term. Basically, it is a rare person that does the math. For instance, Uber and Lyft drivers aren’t thinking about the cost of wear and tear on their car. They’re not thinking about expenses other than fuel. They think, right here, right now, "It’s great. I make $22 per hour!" But what about the car, sick days, insurance, and retirement?

What are your thoughts on cities and public entities creating platforms for sharing?

Cities have two roles that I’m interested in: protecting the public good and the public commons, and being creators of platforms for all of us to make our own economic and social livelihood on. When the government purchases goods, they should be thinking, how can we make this purchase to maximize its potential to be repurposed and built upon by others.

Why are we building these assets (for example, closed auditoriums, and playgrounds that are closed outside of school hours) in such a way that they can’t ever be opened up to the public? How can our expenditures create more opportunity? Finding value in not just what we bought, but in enabling more opportunity. In San Francisco, they put out a challenge asking, what do we have that is underused? They identified a number of parks and buildings and asked, what might we do with these?

We need to think about public assets and how they might be opened up. The whole open data movement has been working on opening up public data What other valuable underused assets do cities have? What can cities do so that the community can reap the benefits? In what ways can we make all things more open?

Cities, instead of giving sole source contracts, should make an open, very short term bidding process and not choose just one company. Instead of saying we’re going to allocate these 300 parking spaces to one carsharing company, ask instead "here are some parking spaces, which ones do you want, and how much will you pay?" This way, the city can maximize revenue and it isn’t locking-in one provider long-term. The city should be trying to maximize who can participate and not give a five and 10 year contract. Long-term contracts diminish opportunity and reduce the opportunity for innovation. At every point government should be thinking, how can we maximize participation, and make efficient use of the asset, and find new uses we haven't thought of yet?

Cities that do this will minimize the number of bad choices and bad contracts, because lots of people can compete and the best ones will have the chance to grow.

You’ve said that chapter 10, the chapter on climate change and Peers Inc, is the reason you wrote the book. Please tell me more about that.

If I think about the transition to the Peers Inc organizational structure, it’s an economic transition that’s happening around the world. For good or for bad, with values we like or values we don’t like, it’s happening and we’re not going to stop it. But there are some amazing attributes that come with this new organizational structure: exponential growth, exponential learning, the ability to adapt quickly to very local conditions. Let’s leverage those to address our enormous global climate crisis.

Climate is bearing down on us at a pace that is much more close and terrifying than people understand. We have no time to turn this around. Introducing alternative fuels, or building high speed rail across the country, will take 15 to 20 years before we feel their CO2 reduction benefits. That’s too late. We have to do things that happen fast, that happen worldwide, and that you can localize and adapt very rapidly. Those are the attributes of Peers Inc.

The most successful Peers Inc platforms can scale at exponential speeds because they leverage existing excess capacity. They can learn at exponential speeds because the platforms are paying attention to all the experimentation and iteration that’s going on, analyzing these iterations, and elevating the best practices and putting a stop to the failed ones. These platforms enable the right person, or hyper localized solutions to appear because the platform aggregates effort but also leaves a wide space open for variation. I look at those three things and think, this is exactly, precisely what we need to address this big problem. We don’t have the time and luxury of doing it any other way.

With Peers Inc, we can iterate, adapt, and evolve quickly. With Peers Inc, we’ll survive.

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Top photo: Andrew Elliott. Follow @CatJohnson on Twitter

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