Crowdfunding the Commons
By: Dan Bayn
Tags: Crowdfunding, Self Driving Cars, YouTube

Or “How to be the Uber of Uber”

Ride hailing behemoth, Uber, recently inked a $1 billion deal with Volvo to manufacture a fleet of 24,000 self-driving cars (Ars Technica). That’s insane, but there’s something more insane than just the fact that we’ve collectively given Uber billions of dollars to play with.

One of the reasons ride-hailing platforms like Uber work so well is that they leverage an existing network of operator-owned cars. They have to compete with each other for drivers. And now they’re going to put all those drivers out of work, solely because they have the capital to do so.

Do we even want a handful of tech giants to own every car on the road? From the rail barons to modern telecoms, we know how private ownership of public infrastructure turns out: higher prices, poorer service, and less innovation.

Getting these autonomous vehicles on the road is in the public’s best interest. They’ll be safer, cheaper, and provide better accessibility for people who cannot drive themselves. However, I don’t think we should entrust our corporate benefactors with full ownership of this essential infrastructure.

We should let private citizens invest in these new cars and ride-hailing companies should compete for their services.

Some Back-of-the-Napkin Numbers

An average Uber driver makes about $20/hr. An autonomous vehicle can work nonstop, but let’s assume demand drops off late at night and you lose some time every day to recharge. At an average of 16 operational hours, you can expect an autonomous cab to earn $320/day. That’s $9,600/month.

Figure in 15% overhead for whatever platform delivers the riders and services the cars, minus another 15% for insurance, and you’re making $6,720/month.

That’s damn good, but the initial investment is prohibitive. A Tesla Model 3 costs $35,000. A 36-month loan at 5% interest would cost $1,048/month. That’s a pretty deep hole for a middle-class investor.

But what if you could spread that overhead around? Imagine you go in on a Tesla with 35 other people. Now you’re looking at a one-time payment of $1,000. You won’t even need financing.

Of course, you’re only earning a 1/35th share of the profits, or $192/month. You’ll make your investment back in 6 months. After that, it’s all profit.

A Car that Pays for Itself

Of course, you still need a car. Sharing one with 35 other people would be a logistical nightmare. Fortunately, you’re not the only one contributing to the fleet and, if you’re not a daily commuter, $150/month will pay for a lotta rides. The hailing platform could easily hold your earnings in a wallet and deduct the cost of your own rides before paying out at the end of the month.

You end up with three tiers of users:

Investors who don’t use the fleet, just take the income and maybe use it to put even more cars on the road. Investors who use their profits to pay for their own rides, getting a car that pays for itself. Non-investors who just pay for rides the old-fashioned way.

The best part is that we’ve created this fleet of vehicles without ceding power to any single corporation or platform. Owner-operated vehicles could take customers from any ride-hailing app, recharge at any station, and get service at any auto garage.

This is what I mean by “crowdfunding the commons.” It’s not tax dollars creating public property or individual wealth creating private property. It’s a public good owned collectively by private citizens.

And it’s not just for physical goods…

Crowdfunding on YouTube

YouTube Red’s 1.5 million subscribers pay just under $10/month for ad-free videos and a few other benefits. That creates a pool of $15 million/month! YouTube keeps a percentage to fund their Originals, but the rest is distributed among content creators based on their share of Total Watch Time.

That may seem fair, because two short videos count the same as one long video, but it still counts each viewer equally. Creators who want to turn a profit are incentivized to attract the largest audience, period. These are the same mass market economics that have been driving us toward the lowest common denominator since Gutenberg.

Something more like Patreon, that allows Red subscribers to decide who gets their money, would do more to promote quality content, however the community defines it.

To be fair, the first place my Red dollars should definitely go is to compensate any creator at the same rate they’d get from an ad-supported viewer. Since advertisers value each viewer at a fraction of a penny, this should leave plenty of money for supporting creators of my choice.

Let’s conservatively estimate $6 left over. YouTube would need to add a mechanism for me to identify the creators I want to support each month. Let’s call it the “$$$” button. If I decide to $$$ six different videos, that’s $1 for each of them, which makes me somewhere between 100 to 1,000 times more valuable to those six creators than an ad-supported viewer.

And we could push it even further…

As a Red subscriber myself, I’m also not too thrilled about my dollars being used to turn YouTube into just another studio. I don’t need YouTube guessing what content I want to see; I’m perfectly capable to deciding for myself which creators I want to support.

YouTube could really eat Patreon’s lunch by allowing Red subscribers to pledge additional dollars to specific creators. They’re already processing my payments every month, so this would eliminate a major point of friction for creators: directing their fans from YouTube over to a 3rd party website.

Again, you’d end up with a 3-tiered system:

An extremely valuable tier of your biggest fans, who’ve chosen to pledge money specifically to you every month. A still highly valuable tier of Red subscribers who’ve $$$ your videos, giving you a share of their normal subscription dollars. A public tier that’s ad-supported (or Red subscribers who pay out at the normal ad-supported rate).

I think this would free many creators from the burden of having to pursue ever-larger audiences. Journalists could devote their time to causes that disproportionately affect small, marginalized communities. Filmmakers could invest in higher production values, even if it means making fewer or shorter videos. Creators would be rewarded for engaging their fans, not just gluing more eyeballs to their screens.

I’m sure these aren’t the only applications, either. If you’ve got another idea of how crowdsourcing can fund public goods, write me a response. And see also my article on Medium, Monetization, and Authentic Incentives.