If there’s a better social and political analyst than Thomas Friedman, I’ve yet to meet him or her. It’s not just the depth of his pieces (see his New York Times interview, this week-end with President Obama for helping us see the guy we knew was always in there) – it’s the breadth too. The World Is Flat remains a brilliant wide-angle view of globalisation, but I was a little surprised to see that ‘disintermediation’ was missing from his list of 10 forces driving these tectonic shifts.
Disintermediation (simply stated, it’s the process of cutting out the middle-men) is perhaps the biggest social, economic and (soon) political force re-casting how we live. I had another reminder of it a few weeks ago. On a family trip, four of us were stuck in Paddington station in London where multiple signal failures had turned the place into a hot, sticky, hell-hole. The train we wanted (to Slough) was not likely to leave for 2 hours. So, we looked for a taxi – as did thousands of others. My son then took out his phone, registered us with Uber (the sharing economy’s paid-for lift service), put in our location and before we knew it, Mohammed had turned up in his very comfortable Audi to take us to Slough for less than half the quoted black-cab price. The whole thing took less than five minutes.
Friedman recently interviewed Airbnb’s co-founder, Brian Chesky, in the New York Times. The exponential growth of the sharing economy can be seen in Airbnb’s ascent: on July 5th 2014, 330,000 stayed in a house/castle/apartment/yurt courtesy of the company. On July 5th 2012, that number was 4,000.
Although Friedman’s article was entitled “And now for a bit of good news” that isn’t the whole story, of course. Disintermediation is connecting us but it’s also cutting jobs at a tremendous rate – which partly explains why New York hotel chains and London taxi drivers have tried to get Airbnb and Uber blocked. Brian Chesky see this as not losing jobs, just re-distributing labour:
“you may have many jobs and many different kinds of income, and you will accumulate different reputations, based on peer reviews, across multiple platforms of people. … You may start by delivering food, but as an aspiring chef you may start cooking your own food and delivering that and eventually you do home-cooked meals and offer a dining experience in your own home.”
Thomas Friedman (via possumgolightly.com)
Whether this future scenario of sharing entrepreneurs delights or horrifies you, there’s no denying we’re going to see more of it. Mohammed has a nice car, and likes driving it and meeting people – why shouldn’t he accumulate a little spending money by doing a few hours Uber-work a week?
Friedman highlights the key to the sharing economy’s success, and the source of good news: our rediscovery of trust:
“Airbnb understood that the world was becoming hyperconnected — meaning the technology was there to connect any renter to any tourist or businessperson anywhere on the planet. And if someone created the trust platform to bring them together, huge value could be created for both parties. That was Airbnb’s real innovation.”
In my book ‘OPEN’ I describe the logic chain which is allowing the world to go SOFT:
1. Because we now can, we SHARE. We used to share what we saw (lolcats, etc), then we started to share what we knew, then we started to share what we owned, now we’re starting to share what we do;
2. If we want to share we need to be OPEN – this applies as much to big corporations leveraging ‘radical transparency’ as it does to individuals communicating socially;
3. In order to share openly, we inevitably prioritise FREE: freedom to reproduce, re-mix and re-purpose, freedom to apply our skills in contexts previously denied to us, and freedom to communicate and collaborate directly – without the need for intermediaries;
4. And all of the above fall apart without TRUST. ‘Reputational capital’ (feed-back ratings) has become the new social currency, and we work hard to accumulate it and safeguard it. To paraphrase St Paul, these are four values that have emerged, and endured in the technological age – but the greatest of these is trust.
Strictly speaking, ‘disintermediation’ is something of a misnomer. We haven’t eliminated intermediaries (like travel agents, hoteliers and taxi companies). We’re merely replacing them with ‘digimediaries’ – digital platforms that give us the power in transactions.
The coming battle will be fought by the protectors of the old system’s vested interests, and, well, we the people. But we’ll see SOFT values spreading, and we’re only at the start of exploring what might be possible when we trust each other more. And this is why the ‘flattening’ of the world, as Friedman sees it, has taken place: because we’re winning the trust argument.For decades, our most established institutions have said we mustn’t trust each other. Pillars of society like investment companies, mortgage lenders,banks, the clergy, police and politicians. They said ‘trust us, and we’ll protect you from the untrustworthy ones’. And then they abused that trust, spectacularly. Thanks to technology, however, we began to trust ourselves, against all their advice. And we found it exhilarating. So, now we think nothing of transferring money to a complete stranger’s account on eBay, or sleeping on a strangers couch, or paying a stranger to drive us somewhere (so long as their positive feedback rating is 99% or better).
Which brings me back to Mohammed. As we were speeding along the M4, I asked what safeguards Uber had in place. He told me that he could not operate if his customer feedback dropped below an agreed level. “But that also applies to you – I’ll rate you as a customer after this ride. And if your passenger rating slips, no-one will want to collect you!”
You see, we’ve even disintermediated trust