Keywords

1 Introduction

The collaborative economy has been characterised as a worldwide phenomenon with distinct features aligned with equality and accessibility. It is also claimed to be a more inclusive economic model assumed to be valid across all cultural and geographic contexts. This chapter argues that, in Latin American societies, practices of exchange in the collaborative economy are underpinned by fundamentally different rationales and structures than in Western societies. For centuries in Latin America a range of economic, sociopolitical and cultural practices have been intimately linked to what Western societies are now calling the collaborative economy. Acknowledging the importance of Web 2.0, this chapter will discuss how digital technologies have brought about new collaborative consumption patterns and we address the question of whether the technology-induced collaborative economy has created new economic and sociocultural settings or if it reproduces already existing ones.

In this chapter, we conceptualise the collaborative economy in relation to an old economic model of collaboration that has historically existed in Latin America. This framing provides us with an understanding beyond the current collaborative economy in Western post-industrial societies. To define collaborative economy in Latin American societies, we first need to recognise that relations established in the exchange of goods and services are tied in some way to historical, spatial and sociocultural conditions linked to the informal economy, social inequality and exclusion. We assert that the digitalised collaborative economy is reproducing collaborative practices that are intimately linked to marginalisation and social exclusion, which remain societal challenges despite the region’s economic growth (World Bank, 2016a, b). For reasons of scope, this chapter focuses on four countries representing the largest economies and most important tourism destinations in the Spanish speaking part of Latin America: Argentina, Chile, Colombia and Mexico. We emphasise how shared societal features and challenges (e.g. inequality, exclusion and informal economy) play out in digitalised collaborative consumption in ways that are substantially different from the Western world.

2 Collaborative Economy

Our interpretation of collaborative economy is inspired by Felson and Spaeth (1978) who define acts of collaborative consumption as “those events in which one or more persons consume economic goods or services in the process of engaging in joint activities with one or more others” (1978, p. 614). Additionally, Belk’s definition draws attention to the motivation of compensation: “people coordinating the acquisition and distribution of a resource for a fee or other compensation” (2014, p. 1597). Sharing is also characterised by the collective strength of often very weak ties according to Granovetter (1973), wherein individual collaborative action accumulates in collective results. The distinction between offline and online collaborative exchange also warrants discussion, since inequity and exclusion can be present in both digital and non-digital spheres. In studies of the collaborative economy, Cammaerts (2008, 2011) found that digital technologies cannot be treated as separate to the economic, political and cultural realities of the traditional, offline world but are very much entangled. Instead, digital technologies offer new opportunities for economic participation by providing an extended network and new avenues for exchange. However, digital technologies also go hand-in-hand with exclusion and control, reinforcing power relations and hegemonies.

Collaborative consumption can be understood as a form of economic exchange whereby the use of idle goods and services not only benefits the owner or service provider, but also a wider community. The very existence of the exchange network extends a set of relational ties that makes a collective, and this collective or community has future potentials beyond the simple exchange between giver and receiver. For instance, Botsman and Rogers (2010) identify idle capacity as a key characteristic of the collaborative economy, e.g. a car owner using digital platforms such as “BlaBlaCar” or “Tripda” to connect with and offer seats in a car to persons who want a ride to the same destination. This type of exchange is reinventing not only what is consumed but also how we consume it. It also redefines the practices that are taking place in diverse areas ranging from the financial world to technological and educational worlds. One stated benefit of these practices is to create a fairer, more inclusive and equitable economic model (Botsman and Rogers, 2010).

In industrial and post-industrial societies, technology has contributed to the commodification of culture. For example, the Internet and rapid expansion of digital technologies have fed collaborative consumption. Increasing access to the Internet on mobile devices has scaled up sharing quite radically; it takes place in a context of (very) weak ties, often across international boundaries, and on a global scale. It is not only the scope of sharing that has increased exponentially as a result of digital technologies, but also the breadth of what is available to be shared or traded online.

Increased access to and interconnectedness between different actors enable new exchange opportunities, although emphasise that these technologies are appropriated in different ways. Arguably, the term “network” denotes a new social morphology of informational capitalism in which communication technologies such as the Internet facilitate the decentralisation of transactions. Castells emphasises that digital technologies do not necessarily bring old practices of power to an end but allow for new forms of control to emerge. They also have the potential to generate more democratic and egalitarian practices. This is in line with a World Bank report (2016a, b) that argues that access to information and communication infrastructure is by no means the miracle solution to social inclusion and social cohesion. Digital technologies require knowledge, skills and a commitment from government in terms of education and communication programs.

The concept of “the digital divide”, which is a term originally coined to describe the disparities in Internet access in the United States, might be useful to understand the existing inequalities between those with access to digital technologies and those without access. The ability of an actor, be it a company, individual, government or other organization, to form part of, and participate in, the network is determined by the degree to which they can contribute to the goals of the network. Individuals who cannot access and/or use new technologies are those with nothing to offer the network and are therefore excluded (Cammaerts, 2008). For instance, even though the above-mentioned World Bank report (2016a, b) states that Latin America has solid investment in information technology infrastructure, production and knowledge, it flags concerns that governments are not seeking to close the digital gap. For instance, Mexico has 68 million people without access to the Internet, 61.8% of the total population of 110 million (World Bank, 2016a, b).

Digital technologies connect individuals, groups or collaborative economy businesses and create different mechanisms, such as reputational measures, feedback forums and ratings, to increase trust and address informational asymmetries in the exchange process. However, social media trades on cultural homogeneity and established social networks both online and in real life (Munar, Gyimóthy, & Cai, 2013). Whenever new connections are built, it often replicates old patterns of privileged access for some and denial for others. Cultural encounters are likely to occur between like-minded and privileged members of the creative middle class, rather than within low-income communities or across a broader spectrum of consumers (Stokes, Clarence, Anderson, & Rinne, 2014). Further, the benefits of the collaborative economy do not necessarily trickle down to the needy, and there are some who partake in sharing out of necessity (Kassan & Orsi, 2012) as seen during the recent financial crisis in Spain, Portugal and Greece.

3 The Informal Sector in Latin America

This chapter challenges one of the taken for granted assumptions about the collaborative economy that it creates a more equal society with a fairer, more inclusive economic model (Botsman & Rogers, 2010). As already stated, scholars have demonstrated that new digital technologies do not necessarily generate greater equality. In Latin American societies with a significant informal sector, we argue that the inclusion of the informal sector is pivotal in assessing the impacts of the collaborative economy. Often however, the informal economy is disregarded because data on the informal economy are often unreliable by virtue of the fact that it is hidden and operates in a grey zone outside official record keeping. However, as a tentative picture of its relevance, this sector makes up 52% of employment in Latin America. As such, the informal economy constitutes a structural condition of Latin American societies, and it has consequences for accessing goods and services in the regulated economic market.

There are also contradictions in the different forces at work that make it difficult to understand the collaborative economy as a formal-informal phenomenon. Under a modernisation agenda (an agenda historically pursued by global organisations such as the World Bank), the informal sector is depicted in decline everywhere, being replaced by structured, systematic approaches to production and consumption. Digital innovation, as represented by the collaborative economy, is encouraged for its innovation and is perceived as a way of expanding markets and growing the economy. Conversely, under globalization, the economy is depicted as universally growing as a deregulated, frictionless global economy (e.g. Portes & Haller, 2005). Globalisation, as it takes form in collaborative economy peer-to-peer transactions, appears to promote and even accelerate informal transactions occurring outside the formal economy. A significant part of the activities embedded in the concept of the collaborative economy is hitherto part of the informal sector (Hart, 1973).

In a context-bound understanding of collaborative economy, we must acknowledge particular economic, environmental, social and institutional factors influencing exchange in a given society. This suggests  that the informal economy is the product and driver of advanced capitalism and the site of the most entrepreneurial aspects of the urban economy in the Global South. For instance, exchanges outside the formal economy can be understood as a response to the regulated, normative market as well as a set of behavioural practices in communities that resist, are opposed to, or excluded from participating in regulated formal markets for a variety of reasons (Portes & Haller, 2005). Ghezzi and Mingione (2003, 2007) argue that the informal sector is not a marginal element of the service economy in Southern economies. On the contrary, new patterns of employment that encourage flexible jobs lead to increasing job opportunities within the informal sector (World Bank, 2016a, b). This change in employment patterns does not occur in isolation but is also part of broader changes taking place that reflect the legal and cultural revalorisation of the informal economy. Flexibility and some of the informal sector’s practices, such as certain types of micro-entrepreneurship and individual or group initiatives, are gaining acceptance in this new economic sphere even though they were considered illegal before. These micro-entrepreneurships are set up, for instance, at the tianguis or flea markets, and these collaborative practices are mediated by digital technologies that legitimise and reinforce existing social practices.

4 Inequality and Exclusion

For some sectors of the Latin American population, the collaborative economy is a collective strategy to generate jobs and purchase goods, where the latter is particularly related to new technologies. The scope of the collaborative economy is intimately linked to societal conditions such as inequality and to political, economical, cultural and social exclusion, which in turn create the drivers for seeking alternatives outside the regulated market to solve basic needs. In the Global North, the collaborative economy has been mooted as a strategy to address market failures such as overconsumption and overuse of resources, to unlock the economic potential of idle resources, to supplement incomes, and to reduce transaction costs for example, which are all arguments related to formal economic exchange.

However, in Latin American countries the collaborative economy is more appropriately understood as a societal structure and set of practices related to the unregulated or informal economy (Schneider, Buehn, & Montenegro, 2010). In this perspective, the collaborative economy becomes yet another visible manifestation of societal and structural challenges. Due to the lack of opportunities to integrate into the established social and economic systems, or a lack of belief in the institutionalised formal economy, certain social groups adapt to and participate in the collaborative economy. In Latin America in 2012, the total population was 575 million of which 167 million (29%) lived in poverty and 66 million (11.5%) in extreme poverty. In 2013, 68% of the population in the region was identified as ‘lower class’, with the ‘middle class’ 30% and 2% classified as ‘upper class’ (Latinobarómetro, 2013). As Table 1 shows the presence of poverty in the overall population of Argentina, Chile, Columbia and Mexico, illustrating that despite the region’s progress in fighting poverty and inequality over the last two decades it still remains a central and urgent problem (World Bank, 2016a, b).

Table 1 Poverty ratio (in %) in the population of Argentina, Chile, Colombia and México
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Building upon the above picture of the region, Table 2 illustrates that Latin America is one of the most unequal regions in the world. In 2014 the richest 10% of the people in Latin America has amassed 71% of the region’s wealth (World Economic Forum, 2015). In 2009 taxes and transfers reduced the income inequality in 19 Gini points in Europe, whereas in Latin America it was 2 Gini points (OXFAM, 2014a, b).

Table 2 Ginia index in Argentina, Chile, Colombia and México
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Despite strong economic performance in Latin America over the last decade, its vibrant economic growth and significant reduction in poverty and inequality, approximately 20 million young people between the ages of 15 and 24 are neither studying nor working. The integration of this group, known as “ninis” (from the Spanish phrase “ni estudia ni trabaja”), is a persistent challenge for governments. One of the main groups of protagonists for the collaborative economy is the youth, which is estimated to be 140 million young people. 39% of this group (more than 54 million individuals) live in poverty and 10% in extreme poverty. Only 35% of working youth have health insurance, 32% are enrolled in a pension system, and of those working only 10% have a regular job. As a group, youth are characterised by increasing education levels and they also have access to social media platforms for exploring alternative ways to gain access i.e. to work or social networks.

In developing societies, digital technologies divide those who have access to a wider range of social and economic opportunities and those who do not. This digital gap tends to open along generational and educational lines: the younger generations generally enjoy greater use of digital technologies, and the higher the educational level, the greater the use of digital technologies (World Bank, 2016a, b). Globally, there is a trend towards an increase in the actual value added by the information technologies in the services sector (World Bank, 2016a, b). However, despite increased access to technologies in developing countries, this has not necessarily led to an increase in uptake of digitalised platforms (World Bank, 2016a, b) such as Uber, Airbnb or Touristlink. As noted above, one of the key points of difference between Western and Latin American societies is the way capitalism operates: in developing countries inequality, exclusion, and the informal sector are contributing to structural problems and alternative economic practices that do not exist to the same extent in Western economies. This leads to a set of rather different rationales of participation in the digital collaborative economy in developing countries to those operating in Western societies. As discussed below, rather than being a response to a financial crisis and a driver to supplement formal incomes as seen in Greece, Spain and Portugal, the collaborative economy in Latin America reinforces and synthesises the existing power asymmetries, unequal distribution of resources and knowledge gaps.

5 The Historical Context of Collaborative Economy: Tianguis and Flea Markets

Understanding Latin America’s setting for collaborative consumption activities requires an understanding of the flea markets or tianguis. In the tianguis, exchanges of goods and services take place in an unregulated, informal market system and provide the local population (lower and middle classes) access to a variety of products and services otherwise outside their reach. In recent studies by Olavarrieta, Manzur, Hidalgo, and Farías (2008), the flea markets in Chile expanded considerably in the 1980s due to the country’s severe economic crisis. By 2003 the country had 6000 outlets and attracted over two million visitors a year. In the 1990s Argentina suffered yet another economic crisis, which led to a considerable increase in not only second hand markets but also illegal/copy-merchandise markets. Currently in Buenos Aires more than 100 markets of this type exist. La Salada, a market in the city of Buenos Aires emerged in 1991. It was originally organised by Bolivian immigrants with only a few stalls, but now it has approximately 40,000 small stalls selling different products (El País, 2015a, b).

Another significant redistributive market given its size, history and cultural significance is Tepito in Mexico City. It comprises of an enormous area and is intimately linked to trade in the pre-Hispanic times. At the end of the Mexican Revolution (1910–1920), the area became known for its production of shoes, which in the 1970s transformed into a marketplace for the distribution and exchange of illegally imported goods and services (in Spanish, fayuca). The emergence of this type of market provided the local population (middle class and lower middle class) access to products and services that would otherwise be unavailable. In 2001, approximately 12,500 sellers worked in this market and were linked to 64 different trading organisations (Najar, 2001). Several federal and local Mexican governments have tried to regulate and even close this market, however the population has created a whole range of different social practices, internal organisations and strategies of negotiation with external actors (i.e. local and federal authorities), which have paved the way for the market to gain relative independence. Consequently, the failure of several attempts by local and federal authorities to take control of the market cannot be understood simply in terms of the capacity of the market to organise itself and advocate its interests. Rather it is about tolerance from and complicity with authorities (Olavarrieta et al., 2008; Najar, 2001; El País, 2015a, b; La Nación, 2014).

These populations have created an array of social and cultural practices, internal organisations and strategies of negotiation to control and manage the tianguis or flea markets. Consequently, these negotiated spaces are seen as the failure of authorities to take control and they also represent opportunities to gain access to new technologies and forms of consumption (e.g. cell phones, computers, software, films, music) which otherwise would have been impossible to access for the marginalised segments of the population due to the existing structural barriers discussed above (Velázquez & Clausen, 2017, forthcoming). For instance, in 2005 the International Intellectual Property Alliance (IIPA) ranked Mexico as the fourth in the world for selling pirated products and goods, surpassed only by Russia, China and Italy (Posada, 2007). These older forms of collaborative economy are historically embedded sociocultural practices in the exchange of goods and services. They are also connected to the digital collaborative economy in unique ways.

6 The Informal Economy in the Digital Era

The informal and non-institutionalized spaces of collaborative economy have not only open new avenues to access goods and services for marginalised and excluded segments of the population, but have also generated unique consumption patterns. Contrary to Western consumer societies wherein digital technology devices (e.g. smartphones, tablets and computers) have a short lifespan, in all four Latin American societies described in this case the flea markets or tianguis have developed specialised businesses in which they repair hardware or install copies of software. Computers or cell phones which are discarded in the US or European markets are repaired or re-used as parts to repair other devices. This brings about a kind of sustainable re-use and environmentally beneficial practice and it also represents a novel business sector generating new job opportunities albeit in the informal economy.

These flea markets provide the opportunity to stage collaborative consumption in spatially-fixed, but highly socialised platforms and they are integrated into some of the must-see sites and principal tourist attractions of Buenos Aires, Mexico City, Santiago de Chile and Bogota. Contrary to the Western ideas of collaborative economy these social platforms are face-to-face exchanges of goods and services, which also represent the integration of economic, political and social reality with digital technologies (as opposed to being mediated by digital technologies). These sites play a significant economic role in the informal sector. The Argentine Chamber of Commerce calculated a 55.9% increase in the sale of such products from 2013 to 2014 in Buenos Aires (La Nación, 2014). In March 2015 the Argentina Chamber of Commerce counted a total of 2659 illegal stalls, which represent an increase of 21.4% compared to 2014 (CAC, 2015). Turning to Colombia the sale of illegal products generated in 2013 a surplus of 720 million US, which corresponds to approximately 1.3 trillion Colombian pesos. The lost revenue of illegal products in Mexico is considered to be 200,000 million Mexican pesos. The most affected market sectors are the production of music and software (El País Colombia, 2014). Even though these markets have turned into strategically significant spaces of commerce, these markets also reproduce existing societal structures of exclusion and inequality.

7 Digital Gap in Latin America

As has already been stated, in Latin America there is a deep divide between people with and without access to digital technologies, and this divide is exacerbated by generational differences (World Bank, 2016a, b). In Latin America, only a small proportion of the population has access to or knowledge about new digital technologies. Not one of the countries in the region is listed among the top 30 countries that have managed to reduce the digital divide (World Economic Forum, 2015). The gap persists in spite of economic growth in the region. For instance, Chile leads the region with 61% of its population enjoying access to Internet whereas in Columbia it is 49% and in Argentina it is 56% (Latin American Science, 2016). To participate in and benefit from the digital collaborative economy, access is required to new technologies, particularly in relation to financial systems (e.g. banking and credit card systems). Even though the Latin American market has been one of the fastest-growing regions for card payment volume in recent years, cash payment still remains the most prevalent form of payment accounting for more than half of the region’s total consumer payment transactions (Euromonitor, 2015).

Several studies argue that technological progress will increasingly enable the poor to afford and use digital financial services. However, the population’s ability to reap the dividends from these investments will be largely determined by the state’s capability to provide supporting policies such as educational and technical programs about how to use the Internet. Moreover in Latin America the new technologies automate many tasks but for workers not possessing the skills that technology augments, the outcome will be greater inequality rather than greater efficiency. Poor regulation, little competition and a historically volatile currency has prompted consumers to move to the informal or unregulated economy, making access to established financial systems (e.g. credit cards and loans) difficult. Consequently, access to and use of digital collaborative economy platforms such as Uber and Airbnb are inaccessible to a large proportion of the population both as producers and consumers. It is noteworthy that, for example, in Mexico a sharing service such as Uber is only available in the major cities of Mexico City, Monterrey, Ensenada and Guadalajara. In other words, as revolutionary as these new technologies may be, participation is bound by both the local sociocultural context, political realities and histories of marginalisation and exclusion that characterise these societies.

8 The Collaborative Economy in Tourism in Latin America

Despite the impediments outlined above, Latin America has witnessed the establishment of digital collaborative economy companies such as Uber and AirBnB. Airbnb, for example, has access to 7000 properties in Argentina and 8000 in Mexico (Herrera, 2014). A large number of Latin American platforms have also started up (see Table 3).

Table 3 Collaborative economy businesses in Argentina, Chile, Colombia and Mexico
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In a Latin American context, Uber is a very successful company with an increasing customer base since 2013. The constant growth of this company is explained by the lack or inadequacy of transportation services provided by traditional taxi companies in this region, and issues relating to service quality and safety and security issues including taxis in poor condition, too expensive, the waiting time to get hold of taxis, rude or unlicensed taxi drivers etc. In Colombia, Uber reported that hundreds of thousands of people have benefitted from their service and have further generated jobs for five thousand people according to the acknowledged newspaper El País (2015a, b). The Colombian government hesitated to intervene but has recently announced certain measures to regulate this service which might even be to close it down due to the providers’ unwillingness to pay taxes (El País, 2015b). In Mexico, Uber also has exhibited strong growth in the major cities as Mexico City, Monterrey, Guadalajara and Tijuana. The service has enjoyed broad acceptance, however consumers are from the upper and middle classes with access to digital sharing platforms and credit cards (El Universal, 2015a, b).

9 Concluding Considerations and Reflections

In this chapter we have discussed how the collaborative economy in Latin America responds very differently to the needs and interests of two segments of the population: (1) the marginalized and excluded groups; and (2) the middle and upper classes. In the four countries examined, the collaborative economy represents an alternative model for the production of goods and services, and for employment of marginalised and excluded segments of the population. This especially counts for the youth who do not have access to the educational system or job opportunities within the formal economic system. However, the collaborative economy is not only about job opportunities or acquiring products. It also provides a lens to understand how specific segments of the population are excluded from the regulated economic market.

Even though the expansion of digitalized collaborative initiatives related to tourism consumption has increased significantly, and Latin America is characterized by a solid information technology: infrastructure, production and knowledge according to the World Bank’s latest report (2016a, b), it also becomes clear that the informal sector keeps playing a pivotal role in the understanding of practices related to collaborative economy. It might be yet another way for the populations to express their critique in a non-violent way of the existing political and economic model implemented by the governments in this region. Marginalised and poor people depend on the spatial fixed tianguis and flea markets in Latin America to access the world of new technologies and products which otherwise would be out of reach. These spaces are turning the sector of collaborative consumption into a more sustainable alternative by re-using and repairing goods and products e.g. computers and cell phones. However, for the middle and upper classes, these new digital technologies are an additional tool providing access to an international arena representing and constituting new forms and practices of economic, sociocultural and political integration with their national as well as international peers.

The above-discussed Latin American perspective suggests limitations in existing conceptualizations of the collaborative economy offered by Botsman and Rogers (2010). In Latin American societies, digital collaborative economy is adopted into a sociocultural, political and economic network. As such, it becomes an extension of well-established and social embedded historical practices of collaborative production and consumption, that replicates old patterns of privileged access for some, and denial for others.

In this chapter we have aimed to advance conceptualisations of the collaborative economy by reflecting on structures, rationales and practices in countries characterised by high levels of equality, exclusion and large sectors of informal economic activity. In this way, we have demonstrated that there is a deeply historical collaborative economy that operates outside the formal sphere and that bears little resemblance to the new digital collaborative economy described by contemporary Western protagonists. That said, the contemporary digital economy manifested by global platforms such as Airbnb and Uber is growing rapidly in Latin America, propelled by the middle and upper classes. However, as is the case in countries where this digital collaborative economy is driven out of necessity (such as Italy, Greece and Spain), in Latin America it is not necessarily taking place on digitalized platforms (World Bank, 2016a, b). In Latin America it would appear that the marginalized and informal workers remain unable to access this form of economic exchange because they lack both skills and access to digital capabilities as well as access to creditworthiness to become either producers or consumers. It seems reasonable to conclude that the new digital technologies might provide new avenues of change however we do not think we are witnessing a dramatic shift to more equality, to a fairer and more equal economic model based on the collaborative economy’s principles rather these collaborative practices are to be understood and bound up on the sociocultural and political realities in a Latin American context.