From Uber to Airbnb, peer-to-peer business models are often at the center of discussions about where the future of work may be headed. Their rise has prompted new studies of what it takes for such peer-to-peer arrangements to contribute to shared prosperity.
2018 Ideas Worth Teaching Award recipient and Georgetown University professor Melissa Bradley is at the forefront of turning that scholarship into action, exposing next-generation business leaders to sophisticated thinking on this emerging topic. As a “tri-sector” leader, her background includes a corporate career at Sallie Mae and UBS, C-suite level non-profit experience, and public service with appointments under two presidential administrations. Helping students make sense of the pitfalls and potential of this new business landscape, she dives deep into the evolution and future of Peer-to-Peer Economies.
Many people know the term “gig economy” but may be less than familiar with the P2P economy. What was your vision in designing this course for business students?
I decided to develop the P2P course for two reasons. First, the changing workforce is a highly debated topic, but rarely discussed amongst many MBAs. We talk a lot about automation, but do not discuss the current changing dynamics of independent contractor versus employment definitions—a topic of close relevance to recent graduates. We also don’t discuss how these dynamics are already taking place in certain sectors like consulting. Therefore, I felt a focus on how technology is disrupting employment (human assets) was needed. Second, with such a pervasive and disruptive shift in our world, it is important that students understand the complexity of the gig economy. For example, the radically different financing models for these gig companies has shifted how venture capital is priced. The change in how underlying valuations are derived has dramatically shifted the public market responses to going public. These issues are critical in how companies can and will continue to grow and create wealth as well as jobs.
The role of platforms has fundamentally shifted our historical beliefs about economics and has created a very uncertain future in the economy. These factors made it necessary to at least expose MBA students to these types of shifts, especially due to the direct impact on them as consumers and employees.
Your syllabus explores the possibility that “[the peer-to-peer economy] empowers marginalized groups to be important constituents and stakeholders in the new economy.” From the examples you’ve studied, what do you think is most critical to realizing that potential for empowerment?
Many MBA students are unfamiliar with how our current inequality is perpetuated in society through education, transportation, housing, technology and the like. Therefore, a discussion on how technology can democratize access for all should be contemplated in MBA programs. In some instances, platform companies have hurt low-income communities through lack of access to credit cards and banking, or extremely low wages and poor working conditions. In other cases, gig companies have been able to target support to low-income communities by providing transportation or lending access, even if at a higher price.
More than half of America is living in or near poverty. Due to the significant wealth gap in this country it is imperative that MBA students understand the precarious balance of disruption within communities. While I do not expect all my students to work in the gig economy, the same types of questions and strategies are relevant to any type of business.
The final project for the course asks students to propose a P2P project or entity, asking them to take into consideration, among other things, assessment of the regulatory environment. Given that regulation of these technologies is still nascent, what frameworks or questions are important for entrepreneurs to consider when building their business models?
We have integrated former politicians and government affairs leaders into the class to discuss how they have interacted with gig companies. There have been robust debates on the definition of contractor vs. employee as well as how to provide access to low-income communities and the unbanked. In class we have used local and other precedents (e.g. Uber in Austin, Airbnb in NYC) to understand how regulation and lack of policy frameworks can impact both sector growth and consumers.
The key is to have discussions around the need and role of protections for consumers in general, understand where policy vs. regulation is required, and determine the role of any company in supporting its constituents. We do not address right and wrong, but what promotes equity, fairness and equality.
As we write these questions, there is talk of a strike by Lyft and Uber drivers. What’s your take on why this is happening, and what do you think it means for the future of the shared economy?
The drivers are finally realizing they have power. While the court battles have focused on salary and benefits, drivers now realize their power lies in their ability to impact the brand and share price. Whether a strike happens or not, it shifts the pendulum back away from the companies having all the power to a balance of give and take amongst all stakeholders—not just shareholders.
As we concluded my last class this semester we had a robust conversation on platforms and their disruption beyond technology. The shared economy has not only changed how we travel and live, but how people access work. As both companies have gone public they have upended the markets where valuation is no longer based on assets and revenue, but data and pricing.
Key takeaways for my class:
- The platform revolution has changed all we know and have relied on to be true about business
- Technology while disruptive does need to be harnessed and managed to pursue equity and equality
- While old power norms may die, new ones are constantly emerging.
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