“There are successful gangster companies in the world. That’s just the truth. The question is, are we prepared to accept this type of business behaviour as the norm?” – Professor Rob Phillips
Despite the regulatory battles and competitor uproar, the ‘share’ or network economy is here to stay.
People are trading, sharing, swapping, co-purchasing, lending and re-distributing physical and human resources peer-to-peer all over the world.
The share economy has people and the planet at its core. It’s about people connecting directly with other people; finding new ways to use and share resources efficiently and flexibly within our environmental limits.
But what about the companies that promote and enable these exchanges; what are the social and moral responsibilities of companies like Uber and Airbnb to their customers, employees, suppliers, broader society and the environment?
I attended a public lecture at the University of Melbourne this month, where Professor Rob Phillips took a deeper look at how we go about defining these social responsibilities.
Whose responsibility is it anyway?
The phenomenon where a person is less likely to take responsibility for action or inaction when others are present is called ‘diffusion of responsibility’ – and Professor Phillips says it’s the biggest business ethics challenge of the share economy.
That, plus ‘plausible deniability’ – the ability for people (typically people in power) to deny knowledge of or responsibility for any damnable actions taken by their organisation because you can’t 100% prove their participation – underpins many of the big business ethics questions of our time.
Is Adidas responsible for ensuring fair pay for the workers at the factory from which it buys its shoelaces? Is Coke responsible for its contribution to the growing worldwide obesity epidemic? Is H.B Fuller responsible for the widespread use of its glue as a drug in Honduras?
Moving from the more established outsource economy and into the share economy, understanding social responsibility is even more challenging.
Is Airbnb responsible for the safety and wellbeing of hosts or travellers, even though it doesn’t own any property? Is Uber responsible for the wellbeing of its drivers – who it adamantly states are not employees – or its customers, even though they don’t own any cars?
Professor Phillips says much of the response to these questions lies outside of regulation, and in what is accepted as social norms.
Defining ‘normal’ in a new system
“The role of ‘normal’ in systems should not be understated. Right now, while systems are being disrupted, is a key time for changing societal expectations on what businesses are responsible for,” Professor Phillips said.
A huge part of this process is opening a dialog. In the same way that talk of religion, politics and sex are traditionally taboo at dinner tables, discussion around business ethics and responsibility is often side-lined at board tables.
Outside of the boardroom however, consumers are beginning to respond to and demand discussions about what businesses truly value – especially these disruptive businesses – to help them form an opinion on what is acceptable and unacceptable behaviour.
With a business model ostensibly premised upon trust – enabling us to hand over keys to our houses or offer a lift in our car, to perfect strangers – values become a pivotal part of each transaction between sharer, sharee and the company that connects them.
The difference between Uber and Airbnb is stark in this regard.
If Airbnb is the pleasant waitress who cheerfully offers you an extra cup of coffee, Uber is the haughty restaurateur who behaves as if you’re lucky to even get a table.
While much of this can be attributed to the personalities of each company’s CEO, the difference also comes down to a willingness to talk about values and purpose, and a knack for storytelling.
Airbnb focuses on creating a sense of belonging for its consumers, and fostering a genuine connection with diverse communities in host locations. Meanwhile Uber (historically) focused on technological disruption at all costs – though this has recently shifted after the hiring of former Obama adviser David Plouffe.
The share economy has huge potential for positive social impact – for breaking down antiquated hierarchies and power structures, establishing community trust and connection, reducing waste and inefficiency, and redefining how businesses approach their social responsibilities.
For any disruptive business, now is the time to define your values and social responsibilities, communicate them well, and back up these statements with action.
As Peter Parker so aptly summaries in Spider Man, “with great power there must also come – great responsibility”.