The Political Economy of The Sharing Economy


Today, getting a lift to the store is as easy as loading an application on a digital device and summoning a roving car to one’s door. It is fast, cheap and, many argue, less onerous than ownership. The so-called sharing economy is on the radar of interests representing business, various governments in Canada and, to a seemingly lesser extent, academics and critics. I contend that the largely unregulated sharing economy in Ontario is already exacerbating unstable forms of employment in the province. I further contend that even with government regulation, which arguably serves to normalize the sector, the sharing economy shifts economic risk from capital, which can more easily absorb it as a cost of doing business, to individuals who cannot.

To explore these contentions, the first section of this paper will theoretically examine the role of the state vis-à-vis capital and the role technology plays in determining how social relations manifest into power, through a Marxian lens. The second section will attempt to locate the sharing economy in the appropriate political and economic context: that is, that the sharing economy appears during the current neoliberal political policy-making paradigm which is contemporaneous with a post-Fordist economy that features increasingly prevalent non-standard employment relationships and precarious work. The third section will discuss the size and impact of the sharing economy, closely examining general trends in North America with a special focus on Ontario — specifically, that province’s capital city, Toronto. In the fourth section, I will assess several arguments in favour of the sharing economy and how that sector is being positioned as healthy for the economy, the environment and the progressive ethos generally. The fifth section will look at views in opposition to the sharing economy, which predominantly focus on the sector’s record on safety, its tendency to shift risk to the individual from the firm and its role in a more general intensification of a race to the bottom characterized by downward pressure on wages and precarity. The sixth section will investigate tactics by subnational and municipal governments to deal with the sharing economy, be it regulation and/or prohibition. Finally, in the seventh section, I will analyze these socio-political and economic trends and the arguments for and against the sharing economy.

I. Theoretical Framework

The role of governing authority vis-à-vis economic activity is a major issue taken up in the study of political economy. This investigation concentrates on the institutions through which modern governance is exercised such as municipal councils, sub-national authorities including Canadian provinces/territories and states of the United States, and also national governments. Various political economy analyses locate the governing authority differently in relation to the economy and establish ideal roles and/or limits for that authority. These roles can range from one extreme of government merely ensuring a fertile environment for unchecked economic activity to flourish all the way to direct ownership and/or control of the entire economic apparatus, with many variations in between.

The Marxian view of the government during a capitalist economy is that it is a by-product of warfare between classes and that it is controlled by the most economically dominant group. In the case of a government operating during a capitalist mode of production, Karl Marx and Friedrich Engels point to those who own the non-human implements by which economic production is realized (the bourgeoisie) as the group sitting atop the socio-economic hierarchy. “The executive of the modern State is but a committee for managing the common affairs of the whole bourgeoisie,” they tell us in a particularly polemical passage.[1] While this notion of class tension helpfully guides any Marxian analysis, whether Marx and Engels intended such an apparently reductionist position regarding state-capital relations to be their legacy is muddied by later writings. In Capital: Volume Three, Bob Jessop notes that Marx writes:

The specific economic form, in which unpaid surplus-labour is pumped out of direct  producers, determines the relationship of rulers and ruled, as it grows directly out of production itself and, in turn, reacts upon it as a determining element. Upon this, however, is founded the entire formation of the economic community which grows up out of the production relations themselves, thereby simultaneously its specific political form. It is always the direct relationship of the owners of the conditions of production to the direct producers — a relation always naturally corresponding to a definite stage in the development of the methods of labour and thereby its social productivity — which reveals the innermost secret, the hidden basis of the entire social structure and with it the    political form of the relation of sovereignty and dependence, in short, the corresponding specific form of the state.[2]

Here, Jessop provides us a warning to read Marx’s words closely and carefully. Marx does not claim that a clear line can be drawn between individual policies enacted by the government and the prevailing economic indicators, he notes. Instead, “Marx argues that the ‘form of political organization’ corresponds to the ‘form of economic organization’.”[3] That is, where the economy is organized to privilege private property, waged labour and profit-driven exchange it will easily mesh with a politics that places importance on “the rule of law, equality before the law and a unified sovereign state.”[4]

It is arguably important to note that it is not only the Marxians who insist that when capital and the state are considered, they must be considered simultaneously. This ideological current has found a home in other heterodox analyses, such as those proposed by some Institutionalists. It is the degree to which the state and capital are enmeshed and/or operating in different silos that is helpful in differentiating among the various heterodox schools.  For example, Jonathan Nitzan and Shimshon Bichler assert that neither capital nor the state can be considered either as antagonistic towards one another or, alternatively, working in harmony. They argue that the limiting concepts between the two structures, the borders that separate capital and the state, have wholly collapsed and birthed a new power. “[W]e argue that capital and state do not stand against or function together with each other. They do not complement or undermine one another. They neither interact nor interplay. And the reason is simple: they are no longer separate. Capital itself has become an emergent form of state: the state of capital.”[5] Regardless, the place of government in relation to business is particularly important in the current socio-political-economic climate (which will be discussed further in the next section); in which government often functions to alleviate regulatory and confiscatory burdens on the flow of capital and the operation of the business sector in general.

The state, however, is not the only structure relevant to an adequate theoretical discussion underpinning an interrogation of the technology-driven sharing economy in late capitalism. The role of technology as an organizing force has long dominated Marxian analyses. In a footnote to Capital: Volume One, Marx remarks on the need for an extensive history of technology as he viewed its forces to be potentially correlated with social organization. “Technology discloses man’s mode of dealing with Nature, the process of production by which he sustains his life, and thereby also lays bare the mode of formation of social relations, and of the mental conceptions that flow from them,” he writes.[6] Some Marxian theorists argue a system of technology within a society develops into an organizational structure. For example, Nikolai Bukharin states:

In speaking of the social technology, we of course meant not a certain tool, or the aggregate of different tools, but the whole system of these tools in society. We must imagine that in a given society, in various places, but in a certain order, there are distributed looms and motors, instruments and apparatus, simple and complicated tools. In some places they are crowded close together (for instance, in the great industrial centers), in other places, other tools are scattered. But at any given moment, if people are connected by a labour relation, if we have a society, all these instruments of production-tools and machines, large and small, simple and complicated, manual or power-driven-are united into a single system.[7]

In turn, Bukharin suggests to us that the division of labour ─ that which separates the worker from the owner ─ flows from the individual’s relationship to the social technology structure. “The modern division of labor is determined by the modern instruments of labour, by the character, description, and combination of machines and tools, i.e., by the technical apparatus of capitalist society,” he notes.[8] Taken to a highly literal conclusion, this division of labour based on a relationship to social technology offers one theory for why individuals find themselves located where they do vis-à-vis the economically dominant class (either workers or those in ownership/control of the means of production). This is, admittedly, a technologically deterministic reading of Bukharin’s writing. The influence of the social technology structure in regards to the sharing economy is particularly relevant given the inherent risk associated to economic activity ─ a subject which will be investigated further in Section V.

II. Context

Following a period of economic growth, driven by mass production, and increased government spending on social programs after the Second World War, capitalism faced one of its first major crises since the Great Depression of the 1930s. Stagnant economic growth combined with high inflation (dubbed “stagflation”) in the 1970s confounded economic analysts.[9] The crisis gave increased credibility in many eyes to emerging proponents of market-based solutions who were clearly inspired by classical political economy theories that emphasized economic liberalism. Theorists affiliated with these approaches can be described as neoclassical and the associated socio-political-economic paradigm as neoliberal. “Economic neoliberals attributed the crises to the distortion of the market mechanism brought about by powerful trade union monopolists and unsustainable and irresponsible demands on the economic system by governments, transmitted through the competitive system in representative democracy,” Geoffrey Ingham tells us.[10] The stagnated economy could be corrected by a reduction in government expenditures, which would in turn lead to increased savings and revived encouragement “for both capitalists and workers to work harder and longer without having their rewards confiscated by profligate governments,” the neoliberal economists argued.[11] This neoliberal approach, which arguably became structural by the early 1980s, and can be additionally characterized by the privatization of state-owned economic assets, liberalized trade regimes and the deregulation of industry and labour markets, has been a dominant socio-economic paradigm in advanced capitalist nations such as Canada and the United States for more than 30 years. “Neoliberalism should be understood as a particular form of class rule and state power that intensifies competitive imperatives for both firms and workers, increases dependence on the market in daily life and reinforces the dominant hierarchies of the world market with the U.S. at its apex,” Greg Albo, Sam Gindin and Leo Panitch tell us.[12]

The consequences of the neoliberal era, which continues today in Canada and the United States, are significant. Economically, the neoliberal/neoclassical era is correlated with a preference by employers for non-standard employment relationships marked by part-time, contingent and other types of self-employment,[13] as well as “precariousness in job tenure,”[14] according to Mark P. Thomas. Meanwhile, Rosemary Hennessy tells us that “less government’, ‘privatization’ and ‘free trade’ have meant tax breaks and more profits for businesses at the expense of those most in need,” and draws specific attention to  “[c]uts in food, health and education programs that most affect the poor, the disabled, and the elderly”[15]

Rosemary Hennessy
Rosemary Hennessy

as characteristically neoliberal. Concurrently, global free trade accords, such as the North American Free Trade Agreement, have amplified Western capital’s search for regions in which it can lower labour costs produce goods and “massive layoffs have occurred at almost every major corporation since the early nineties.”[16] One of the arguably higher-profile characteristics correlated with the recent neoliberal age is widening income inequality. In Canada, almost half (46.9 percent) of the total household wealth in the country was held by the top 20 percent of income earners in 2012, according to Statistics Canada. That concentration has increased from 45 percent in 1999. On the other hand, the 20 percent of Canadians earning the least held only 3.9 percent of the country’s total wealth in 2012 ─ even less than the 5 percent they held in 1999.[17]

III. The Sharing Economy

To assess the so-called sharing economy, it is helpful to begin with a definition. This analysis proceeds from the idea that the sharing economy can be defined as the provision of one individual’s/group’s private property to another individual/group (also known as Peer-to-Peer) who wish access to that property but do not wish to own it. This analysis assumes this provision is monetized, given that the sharing economy is a sub-section of the larger capitalist economy. Sharing economy sectors often included in various analyses typically include: transportation (such as ride-sharing), lodging (such as home-sharing), retail, labour and services (such as running errands) and finance. Ride-sharing, home-sharing and errand-running will be the focus of this assessment because those services often involve privately-owned property and labour in Ontario. Often, sharing economy transactions are facilitated online through smart device apps or websites, which in many cases are operated by multinational companies.

Knowing the exact size of the sharing economy is less a science than an art at this stage. A 2015 report PricewaterhouseCoopers estimates that global revenues from the sharing economy are currently approximately $15 billion.[18] That firm expects global revenues from the sharing economy will hover around $335 billion by 2025[19] ─ an increase of about 2133 percent. In Ontario, the size of the sharing economy is even less defined. A 2015 report by the Ontario Chamber of Commerce describes the sharing economy as being “in its nascent stages in Canada and Ontario,” and there being “a lack of concrete data on the economic impact of this new and burgeoning sector.”[20] While the 2015 Ontario budget indicates its intention to “support” the sharing economy and acknowledges the impact businesses involved in that section are having on labour markets, it provides no assessment of the size of the sector, either.[21] Despite this ambiguity, the Ontario Chamber of Commerce estimates that the average Ontarian who shares a home through Airbnb, a multinational company in the lodging subsector of the sharing economy, can earn an average of $450 per month.[22] That report also estimates that more than 400,000 people in Toronto have engaged in ride-sharing through Uber, a multinational company involved in the transportation economic subsector. Twenty percent of residents in the Greater Toronto Area, the urban agglomeration surrounding the City of Toronto, have used Uber’s services, the chamber’s report states.[23]

IV: Pros

Proponents of the sharing economy often coalesce around an ethos that privileges access over ownership, Juliet B. Schor, et al tell us.[24] Drilling down further, some advocates view the sharing economy as a more sustainable model of use than ownership, according to PricewaterhouseCoopers. More than 75 percent of people surveyed by the company during one 2014 study said they believe the sharing economy to be “better for the environment.”[25] Nearly 80 percent of respondents in that same survey said they believe the sharing economy is “good for society overall.”[26] A 2015 survey by polling firm Leger found Ontarians are largely hopeful that the sharing economy will be a boon for economic development in the province. Eighty-five percent of people who live in the Greater Toronto Area that were part of the Leger survey believe the growth of sharing economy companies to be positive.[27] “Sharing companies bring significant economic, environmental, and community benefits, including better use of existing resources,” the Ontario Chamber of Commerce tells us.[28]

V. Cons

Given that this is an era that bears witness to an increasing shift toward non-standard employment relationships and precarious employment, detractors of the sharing economy have pointed to that sector’s potential to exacerbate an already perilous situation for labour markets. Some point to companies offering errand-running as an example of how low-waged work on an unreliable schedule ─ especially when those so-called errands are done for companies ─ is creeping in under the banner of the sharing economy. Those companies are, in essence, functioning as temp agencies offering services that “{slide} rapidly from [neighbourliness] to the most precarious of casual labour.”[29] Any intensification of precarity is arguably a cause for alarm, given its disproportionate prevalence among “women, racialized groups, immigrants and people with low incomes.”[30]

A second trend to which detractors regularly point is the shifting of economic risk from the firm to the individual involved in sharing economy activities. This trend is particularly relevant in the transportation and lodging subsectors. For example, Uber, which provides ride-sharing services via a smart device app, offers a low-cost service (UberX) in which drivers of privately-owned vehicles can connect with individuals willing to pay for a lift somewhere. In return, Uber takes a cut of the cost of the ride, a cost which can wildly fluctuate in an unregulated market. Uber’s drivers are expected to handle overhead costs such as the vehicle itself, personal driving insurance and fuel[31]. By contrast, traditional taxi and limousine companies pay licencing fees to local authorities to operate within the borders of a municipality and drivers are expected to be appropriately insured for the potentially expensive costs associated with professional transportation services. The shift toward the personal assumption of risk linked with the sharing economy exploded into plain view in April 2015 when a couple in Calgary, Alberta listed their home for rent on Airbnb and returned to find tens of thousands of dollars in damage and “biohazardous material” left in the house by the renters.[32] This risk-shift is a part of a larger trend in late neoliberal capitalism, Jacob S. Hacker tells us. “The Great Risk Shift is the story of how a myriad of risks that were once managed and pooled by government and private corporations have been shifted onto workers and their families ─ and how this has created both real hardship for millions and growing anxiety for millions more.”[33]

VI: Government Responses

Response to the disruption of traditional economic and labour models caused by the sharing economy has widely varied on a jurisdiction-by-jurisdiction basis. Some communities, such as Eugene, Oregon[34] and Calgary[35] have ordered Uber to cease operations under the penalty of fines until municipal bylaws can be updated. In Calgary, Uber allegedly told drivers that their personal driving insurance is primarily what protects them but they are also covered by the company’s “contingent” coverage up to $5 million for injury and damage.[36] The city’s position is that “a driver’s personal insurance is nullified when riders in private, unlicensed vehicles are injured.”[37] Elsewhere, in March 2015, a German court banned Uber from operating its ride-sharing service anywhere in that country.[38]

The City of Toronto is also grappling with how to deal with the sharing economy. Attempts to halt Uber, for example, in the city have been unsuccessful as of this writing. In the summer of 2015, an Ontario court found that despite Toronto’s protestations to the contrary, Uber does not function as a taxi company and therefore is not required to follow the rules set out for those companies.[39] The city’s mayor has also rejected pursuing an injunction against the company similar to that in place in Calgary,[40] against the wishes of the city’s taxi drivers.[41] Toronto’s ultimate aim is to regulate ride-sharing services.[42] Provincially, the government’s 2015 budget indicates a willingness to regulate ─ not crush ─ the sharing economy. “To help vibrant, emerging sectors thrive, the government commits to working with firms and industries to help them comply with existing obligations and to consulting on an ongoing basis to ensure those obligations reflect a changing economy,” the budget’s text states. In October 2015, a private member’s bill designed to, among other things, regulate ride-sharing companies, ride-sharing drivers and those who wish to share their homes, was tabled in the Ontario Legislature.[43]

VII. Analysis

The sharing economy is unquestionably a disruptive force. It is disrupting labour markets and economic models. It is however, doing little to alter the current social relations that flow from a late capitalist economy. This analysis does not assume a social/cultural determinism based on technology. There are, undoubtedly, other forces that influence ─ perhaps more greatly ─ general social relations in human society. That said, it is arguably fair that an individual’s proximity to control over social technology does at least play some role in the status they find themselves in as late capitalism continues to metamorphose. What is upending traditional analyses is that the system of social technology has changed in that some machines and tools can be owned by workers, such as an automobile or home, and those workers can still find themselves at the mercy of more powerful capitalistic forces, such as those companies involved in the development of sharing economy facilitation apps. In other words, the workers find themselves owning means of production ─ but not those means from which they escape their traditional underclass role.

This means that action by government is as crucial as ever. Governments at both the municipal level in Toronto and provincial level in Ontario appear to be set to regulate the sharing economy. While this action is not out of step with several other North American jurisdictions and developed economies throughout the world, it is a conscious, interventionist choice. Regulation of the sharing economy arguably normalizes an economic sector that does nothing to ameliorate current late capitalist trends toward increased non-standard employment relationships and precarious employment. That is concerning. If precarious employment gains an even stronger foothold, and intensifies pressure on labour markets already highly stratified along racial and gender lines, that is an unjust consequence. Trends in that direction should be stopped.

The arguments for the expansion of the sharing economy under its current incarnation are hollow. Lower consumption and a more environmentally sustainable economy are both admirable goals but does making it easier for drivers to deploy their underused fossil-fuel burning automobile for a quick cash infusion really square with sound environmental policy? It is hard to argue that such an approach is, at its core, truly environmentally friendly. As for the alleged economic benefits of the sharing economy, those seemingly cannot even be measured in Ontario at this time. Indeed, there is the potential that the sharing economy will create jobs but of what value will those be? Will families be able to subsist, let alone thrive, on the value extracted from underused assets? How much capital will individuals have to outlay and how much risk will they have to assume in order to make a decent living, given that solid employment opportunities are becoming increasingly infrequent? The answer appears to be, a lot.

Arguments against the so-called sharing economy appear more grounded. Errand-running companies should not be permitted to function as low-wage temporary employment firms. There is a significant difference between doing an odd job for someone for a few dollars and running “errands” for companies that can afford to hire employees. Criticism of the shifting of risk from firms to the individual is also valid. Individuals do not have the ability to pool risk the way governments and corporations do. And when they are interacting with mammoth multinational corporations, individuals should not have to take on the risk traditionally assumed by those who can more easily absorb it.


The potential consequences of the status quo in regards to the sharing economy in Ontario are concerning and unsustainable. This economic sector is doing little to nothing to disrupt the trends toward unstable forms of employment in the province. Regulation, which will normalize the sector, may intensify the shifting of economic risk from capital to individuals who cannot easily absorb it. Ultimately, the sharing economy is here and governmental authorities appear to be welcoming it. The long-term effects of the sector on the economy will determine whether or not that choice was correct.


[1] Karl Marx and Friedrich Engels, “The Communist Manifesto,” Karl Marx: Selected Writings, ed. Lawrence H. Simon (1848; Indianapolis/Cambridge: Hackett Publishing Company, Inc., 1994): 161.

[2] Bob Jessop, “The state,” The Elgar Companion to Marxist Economics,” eds. Ben Fine and Alfredo Saad-Filho, (Cheltenham, UK; Northampton, MA: Edward Elgar Publishing, 2012), 334.

[3] Ibid.

[4] Ibid.

[5] Jonathan Nitzan and Shimshon Bichler, Capital as Power: A study of order and creorder, (New York: Routledge, 2009), 278.

[6] Karl Marx, Capital: Volume One, A Critique of Political Economy, ed. Friedrich Engels, translated by Samuel Moore and Edward Aveling (1906; Minola, New York: Dover Publications, Inc., 2011), 406.

[7] Nikolai Bukharin, Historical Materialism, (1921; New York: International Publishers, 1925), 135.

[8] Ibid., 141.

[9] Geoffrey Ingham, Capitalism, (Cambridge: Polity Press, 2011), 196.

[10] Ibid., 196-197

[11] Ibid., 197

[12] Greg Albo, Sam Gindin and Leo Panitch, In and Out of Crisis: The Global Financial Meltdown and Left Alternatives, (Oakland: PM Press, 2010), 28.

[13] Mark P. Thomas, Regulating Flexibility: The Political Economy of Employment Standards, (Montreal/Kingston: McGill-Queen’s University Press, 2009), 22.

[14] Ibid., 3.

[15] Rosemary Hennessy, Profit and Pleasure: Sexual Identities in Late Capitalism, (New York: Routledge, 2000), 75.

[16] Ibid.

[17] Statistics Canada, “Share of wealth (or net worth) held by each income quintile, 1999 and 2012, %,” (accessed December 15, 2015).

[18] PricewaterhouseCoopers, “The Sharing Economy,” 2015, (accessed November 1, 2015), 14.

[19] Ibid.

[20] Andrea Holmes and Liam McGuinty, “Harnessing the Power of the Sharing Economy: Next Steps for Ontario,” Ontario Chamber of Commerce, 2015, (accessed on September 26, 2015), 4.

[21] Province of Ontario, Building Ontario Up: Ontario Budget 2015, (accessed November 1, 2015), 103.

[22] Holmes and McGuinty, “Harnessing the Power of the Sharing Economy: Next Steps for Ontario,” 4.

[23] Ibid.

[24] Juliet B. Schor, et al, “On the sharing economy,” Contexts, 14, no. 1, (Winter 2015): 13.

[25] PricewaterhouseCoopers, “The Sharing Economy,” 22.

[26] Ibid.

[27] Holmes and McGuinty, “Harnessing the Power of the Sharing Economy: Next Steps for Ontario,” 2.

[28] Ibid., 1.

[29] Tom Slee, “Sharing and Caring,” Jacobin, January 24, 2014, (accessed September 26, 2015).

[30] Luin Goldring and Marie-Pier Joly, “Immigration, Citizenship and Racialization at Work: Unpacking Employment Precarity in Southwestern Ontario,” Just Labour: A Canadian Journal of Work and Society, 22 (Autumn 2014): 97.

[31] Avi Asher-Schapiro, “Against Sharing,” Jacobin, September 19, 2014, (accessed September 26, 2015).

[32] Danielle Nerman, “Airbnb renters who trashed Calgary home left biohazards,” CBC News, May 1, 2015, (accessed December 1, 2015).

[33] Jacob S. Hacker, The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream, (Oxford/New York: Oxford University Press, 2006), 21.

[34] The Associated Press, “Uber ordered to quit business in Eugene or face fines,” The Oregonian, October 30, 2014, (accessed December 1, 2015).

[35] CBC News, “Uber to suspend Calgary operations to comply with temporary injunction,” November 20, 2015, (accessed December 1, 2015).

[36] Ibid.

[37] Ibid.

[38] The Associated Press, “German court bans Uber’s ride service,” The Register-Guard, March 18, 2015, (accessed December 1, 2015).

[39] Jennifer Pagliaro, “John Tory says Uber injunction not on the table,” Toronto Star, December 4, 2015, (accessed December 10, 2015).

[40] Ibid.

[41] Shawn Jeffords, “T.O. cabbies want Uber injunction like in Calgary,” Toronto Sun, November 21, 2015, (accessed December 1, 2015).

[42] Jennifer Pagliaro and Betsy Powell, “Toronto council votes to regulate Uber,” Toronto Star, September 30, 2015, (accessed September 30, 2015).

[43] Legislative Assembly of Ontario, “Bill 131, 2015: An Act to enact two new Acts and to amend other Acts to regulate transportation network vehicles, to provide freedom for individual residential property owners to share their property for consideration with others and to deal with the expenses of public sector employees and contractors in that connection,” (accessed November 21, 2015).



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