The sharing economy and the Yukon

The "sharing economy" is one of 2016's buzzwords. Trendy tech startups such as Uber, Yerdle, Taskrabbit and Airbnb are promising to fundamentally change how people use cars, hotel rooms and even their spare time.

The “sharing economy” is one of 2016’s buzzwords. Trendy tech startups such as Uber, Yerdle, Taskrabbit and Airbnb are promising to fundamentally change how people use cars, hotel rooms and even their spare time. And they are backed by plenty of Silicon Valley smart money that thinks there is a fortune to be made enabling the sharing economy.

So what is the sharing economy? Think of it as an economic model where people and businesses can rent or borrow things owned by other people more easily and cheaply than ever before.

Sharing is particularly suited to assets that are expensive and not used all the time. I can remember times when someone new to Whitehorse was looking for a canoe to borrow but couldn’t find one, while we all knew that half the backyards in Whitehorse have a seldom-used canoe under a tarp by the back fence.

Some of the new sharing startups are looking at big-ticket assets like cars, construction equipment and vacation properties where traditional rental markets exist. Others are looking at much smaller items, which are traditionally too small for a rental shop to bother with. You can even rent a pasta maker from someone in your neighbourhood on Yerdle. And some, like Taskrabbit or Amazon’s Mechanical Turk, deal in a special kind of asset: time. You can hire someone for just a few bucks, or even just a few cents, to do minor tasks or errands for you.

On Taskrabbit, you can even hire someone with spare time to pick up a milkshake for you. When I checked earlier this week, no one was available to pick up my chocolate milkshake in Whitehorse but had I been in San Francisco I could have had delivery in about an hour.

A quick check of the other sharing platforms above showed that most of them, like Taskrabbit, don’t work yet in Whitehorse.

Of course, sharing is not new. You’ve probably already rented a car, lent a minor household appliance to a friend, or hired a teenager to perform an errand or mow your lawn. A friend down the street uses my lawn mower. I use my neighbour’s drill press (and broke it last time – whoops!). I’ve rented things from snowmobiles to power rakes from MacPherson Rentals in Whitehorse.

If you go back to the Klondike Gold Rush, there was all kinds of sharing: dog teams, pack mules, tools to make boats, mining equipment, mail delivery for those going Outside or coming back, and so on. There was also the long-standing custom that if you were out on the trail and in trouble, you could go inside someone else’s cabin and use it. The expectation was that you would leave it in the same state you found it, and hopefully topping up the split wood beside the stove while you were at it.

My research on this article dug up an event in Wasilla, Alaska a few years ago. According to a Reddit post from the Last Frontier, two people had an accident on a river. They made it to shore, but were wet and cold and hungry. They entered an Alaskan cabin, ate several packs of raman noodles, and left a polite note written on a Styrofoam plate plus a few bucks for the owners to replace the noodles.

Despite sharing not being new, there is some substance behind the Silicon Valley hype.

The Internet helps solve three problems that hindered sharing in the past.

The first is trust. I might be willing to rent you my sea kayak, but I don’t really know if you are the kind of person who will break the rudder by letting yourself drift backwards in shallow water. Or I might want to get a ride from someone in a faraway city when cabs are scarce, but how do I know I won’t end up wallet-less on the edge of town?

The Internet is great at collecting user feedback on both buyers and sellers. Loads of websites have star-rating systems, and firms like Uber and Taskrabbit track the performance of their service providers.

The second issue is depreciation. Paddling a kilometre in my canoe doesn’t use it up, but driving my snowmobile for an hour does involve wear and tear.

Digital platforms are much better than informal or paper-based systems at tracking this. Uber charges you per minute and per mile. Other sharing platforms can do the same with digital precision. This makes it much easier to pass small and precise payments from the user to the owner to make up for wear and tear.

Finally, there are transaction costs. By this I mean more than just the cost of writing a cheque or making a credit card payment. An economist would also point out that resources are consumed throughout the process. People with assets have to look for renters. Renters have to look for the right gadget, and check that it fits their needs. Prices have to be negotiated. And so on.

Digital platforms make this much easier. When you turn on the Uber app, taxis appear nearby as if by magic. Instead of having to drive all the way to Porter Creek to check out a sea kayak I might want to rent, I can just look at the photos on the web.

One inhibitor remains with many of these websites: money. A lot of sharing is as a favour or as part of a barter deal. A Yukoner might be happy to rent her sea kayak to the new guy from Toronto who moved in down the street if he gave her a hundred bucks, but might feel like a jerk charging him money. That’s why point systems or parallel currencies can also be part of the future sharing economy.

That Yukoner with the sea kayak might be happy to lend it in return for 100 Yukon-share points, which she can use to borrow some back-country touring skis a few months later. Or she may not feel badly if he exchanged some dogsitting.

There are lots of possibilities. We shall see how soon the big Outside platforms come to the Yukon, or if some local sharers build something here first.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He won this year’s Ma Murray award for best columnist. You can follow him on Channel 9’s “Yukonomist” show.

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