Highlights
- This article examines the relationship between the rise of the sharing economy and Russian illegal immigrants ability to secure employment in the United States.
- It is comprised of two layered account interviews with Russian sharing economy hosts from Airbnb and Uber, and explains how access to the sharing economy has improved their financial well-being.
- The findings contribute to theorization about blat networks, spaces for play, and the extended self.
1Russian culture is known for its survivability even under the most austere conditions due to connections within the Russian community known as blat networks [1]. Blat networks are otherwise known as informal associations among individuals who trade goods, services, and other commodities without the use of normal currency. These networks have a long-standing tradition in Russia but and were particularly germane during the time of the Soviet Union period, particularly in villages acquiring both government and black market provided sourced goods and services [2].
2Traditionally, Russians have held little regard for monetary currency. Cash is quickly traded for status, power, privileges, or material objects and assets [3]. The absence of a cash-based market economy has its roots in the Soviet Union, and most notably flourished during the Yeltsin era because of the economic turbulence. It has transitioned to contemporary Russia, chiefly in light of its current economic crisis. This trade continues to be critical in order to maintain social prestige across individual and family groups because official Soviet policy of minimizing the market economy.
3The 2014 economic crash created significant financial challenges to Russians, creating a crisis modality. There were continual stories depicting individuals rushing to stores to buy imported electronics which could be traded or bartered for future services at a later date. A common practice of buying food staples for personal consumption or trade flourished during this crisis. A weak ruble, economic sanctions, and a panic mode that gripped their economy convinced the Russian diaspora that their existing quality of life would rapidly decline. With Russian currency based assets and income rendered worthless, individuals began to seek alternative sources of income.
4Russians growing up during the Soviet Union or after the Yeltsin era were accustomed to sharing [4]. Driven by the 2014 economic crisis, sharing economy platforms like Airbnb and Uber gained popularity to subsidize income levels for members of blat networks. These new platforms included foreign assets of vehicles and real estate that had been purchased in the United States after the fall of the Soviet Union. Immigration status is not rigorously regulated on sharing platforms; thus, there is tremendous space for United States-based Russians with property to earn income in violation of immigration law. These platforms provide income earned in United States dollars.
Spaces for Play and the Extended Self
5This work is a commentary on two distinct theories: heterotopias/spaces for play [5] and the extended self [6]. Neither theory is typically applied to the sharing economy nor resistance to national immigration policy.
6A heterotopia, also known as a space for play, thrives in the contrast between what is said and what is done—i.e. the divergence between strategy and tactics. This article will examine how sharing platforms provide a heterotopia in the national immigration debate, providing an alternative space for illegal immigrants to safely and consistently work in the face of deportation orders of the current administration.
7Moreover, a renegotiated understanding of the extended self can create a space for play. The extended self implies that people consider their possessions as projections of their identity. A classic example is a person who buys a car or house to highlight certain aspects of their personality. When possessions are strongly linked to status, materialistic individuals may resort to entrepreneurial behaviors during an economic crisis because these possessions may no longer be utilized to project an image of the self, but to ensure survival.
8The heterotopia within the extended self is the gap that arises when the ideal identity is confronted with harsh economic and political realities. This disparity between the dream lifestyle and the financial requirements to support that lifestyle can result in necessity entrepreneurship [7] that requires the repurpose of material possessions and questions notions of the extended self.
The Layered Account of the Russian Shared Economy
9This article consists of two short interviews. I conducted these interviews with the assistance of a Russian-speaking associate who provided connections within the Russian speaking community of Los Angeles. This community is normally closed to outsiders, so my associate’s assistance was invaluable. The names have been changed since anonymity was a precondition of the interview, because both interviewees were in violation of their immigration status in the United States.
10Following each interview, I provide a theoretical explanation of each of the vignettes. These explanations are not meant to provide any monopoly of interpretation, but are designed to facilitate a conversation with the reader and allow the audience to interpret the findings in ways that are meaningful to them [8]. The goal of the suggested theory is to abstract the findings to broader societal and entrepreneurial concerns. Out of all the interviews I conducted for this project, I selected these because they are representative of two generations of Russians in the Los Angeles community, they illustrate the use of two different sharing economy platforms, and they depict two divergent evolutions of the extended self within the space for play of the sharing economy.
11In this article there are two story-telling vignettes based upon the interviews (with italicized titles), which I interweave with theoretical vignettes. This format recounts an emotionally gripping story and illustrates a novel application of established theory. This Faulkner [9] style of writing is usually referred to as a layered account [10].
Vanya’s Introduction into the Sharing Economy
12I moved to Santa Monica in 2012. My first place was a one-bedroom flat in Santa Monica with a sweeping view of the ocean. This residence was a present from my father to help me with my studies and, of course, to make a good impression on the potential business associates he hoped I would meet. At that time my girlfriend lived in Las Vegas, and since my academic schedule was stereotypically American, I spent 3-4 days a week travelling. As a student, I wanted to show my father my sense of spendthrift, so I used Airbnb to find accommodation in the towns and cities I visited. It was cheaper than staying in conventional hotels and was more interesting, because I had a chance to live in a real local flat. In most cases the hosts were interesting people, and their advice concerning where to go and what to do was useful to understanding local life.
13Whereas I always had a reasonably open mind with respect to sharing my possessions and using Airbnb, my father did not. As a young man he saw the end of the Soviet Union, and his business experiences witnessed the turbulent Yeltsin years. Because of the turbulent economic climate of the 90s, my father is extremely craven hearted. Everything he owns, he treasures, and would never dream of sharing with others, especially not his home. For him his house is his castle, and anyone outside of family is persona non grata. Even as children, my father used his possessions as a way of exerting control over my brother and I—he never gave us an allowance because he knew removing our possessions was a way to get our attention. I always felt like I related more to my paternal grandfather. He grew up in the ruins of the Great War, and his possessions always had to serve a distinct purpose. He chose to drive an ordinary car, lived in a modest flat, and was always more interested in experiences and stories than things.
14Suddenly, Russia invaded the Ukraine and occupied Crimea. Without warning, my financial situation became worse. My father’s salary was paid in rubles. Overnight his income was almost worthless. My father informed me he would no longer be able to send me stipend money—he and my mom were now spending their remaining funds in a typical Russian fashion during an economic crisis—hoarding imported electronics and food—especially gretcha (a kind of oatmeal). Most of my Russian friends and family in the L.A. area faced a similar crisis.
15As a student, I was not allowed to work due to my visa status. Unfortunately, I had homeowner association fees to pay on my condo, tuition fees, and of course grocery and gas bills. My initial urge was to return home which infuriated my father. He told me that not completing my education was not an option. Somewhat grudgingly, my father told me that I was free to rent out my condo in Santa Monica as well as his properties in San Francisco and Las Vegas. After paying the homeowner fees and utilities, I was free to keep any profits to sustain myself in the U.S.
16After hesitation, I decided to become a host and rent my flat in Santa Monica for days I was not in town, and use my Los Angeles connections and my father’s connections in Las Vegas and San Francisco to help me manage my father’s properties. I expanded my account from guest to host and began to wait.
17Amazingly, I was able to sustain myself as an Airbnb host. I still had to take out student loans to pay my tuition, but at least I was able to pay the homeowner’s fees on the condos and pay for my basic expenses. My lifestyle was far from what it was before, but at least I could sustain myself. After graduation, I was supposed to return to Moscow, but my father advised me that I would be better off staying in the United States and helping to manage his U.S. interests. Technically, I was supposed to leave the United States after graduation, unless I had an employer sponsor me (and that can be a nightmare), so I found a loophole to continue my student visa—I continued to take university extension classes—just enough to keep my status.
18My reputation as a manager of Airbnb properties for Russians who were unable to return to the U.S. due to the crisis improved, largely because of my father and his associates. I began to acquire additional properties to my portfolio, and now I am sustaining myself better than before. Airbnb deposits the proceeds into my foreign bank account, and most of the people I employ for house keeping, reception etc., are all Russians and I pay them in cash. I assume they are also not reporting their income but are using it to sustain themselves while they are in Los Angeles or maybe send some money home as well. This use of property is an especially important source of revenue because U.S. dollar payments are used in Russia and are preferable to payments made in rubles (unofficially of course). We are generally violating our immigration status but Airbnb doesn’t check, and it is not illegal for Russians to own property in the U.S.
A Renegotiated Understanding of the Extended Self Leads to A Sharing Economy Heterotopia
19Vanya’s father, as a man who came of age after the fall of the Soviet Union, held his possessions closely, and was the embodiment of the craven-hearted character of the Yeltsin era. The attitudes and values he imposed on our second author are a metaphor for strategy or place [11]—he used property as a rigid sign of social ordering, even for his children. However, emergencies are known to shake up preexisting behaviors and norms and can lead entrepreneurially minded actors to engage in new behaviors and attitudes [12]. The Russian economic crisis of 2014 challenged pre-existing notions of the extended self—namely possessions became necessary for self-preservation, not promotion of identity or power in the blat network. This crisis, and the harsh reality that Vanya may have had to terminate his studies to return to an increasingly impoverished Russia, illustrate the prosaic [13], the tactical [14], and the respective divergence from the ideal or strategic. In order to support his son, Vanya’s father exhibited a willingness to share his possessions even though they were extremely dear to him.
20In order to resolve this apparent impasse between retaining family property exclusively for personal use and losing the ability to sustain himself—Vanya created his own space for play though the sharing economy. He was not authorized to work in the United States, thus conventional employment was a non-starter. To circumvent immigration rules and with his father’s encouragement, he took advantage of lax regulation in the sharing economy to create his additional separate space—he could maintain his student status, earn enough income to sustain himself, and maintain his father’s properties.
21As time progressed, his space for play became larger, and encompassed more members of his father’s blat network. This space for play enabled Vanya to sustain himself while pretending to study in the U.S. and it provided a source of much needed cash for Russians who were property rich but cash poor due to the Russian economic crisis. This space for play illustrates an interesting parallel economy that transcends traditional borders, and lies just outside the realm of legal.
Mikhail, and his “Killer” Uber Service
22I came to this country in 1992, almost immediately when travel regulations were relaxed. I was still a young man, easily impressionable by the propaganda of Perestroika and Glasnost. I was sure I could live the American dream. But I had no education, no real training, and I did not speak English (note to reader: this interview took place in 2016 and Mikhail still did not speak English—the interview was conducted entirely in Russian). However, I had completed my compulsory military service and had even taken a crack at the Afghans.
23Fortunately, my mother had a friend living in Los Angeles who she promised would find a job for me. But with someone of my limited skills, I quickly found myself working in a very physically demanding job. Unfortunately, people get desperate sometimes, especially in a city like Los Angeles—it is a city that swallows people whole! When they get desperate, they make promises, and it was my job to help them remember their promises.
24The pay was great; I received a cut of everything I collected. I spent a lot of money on gold (he raises the sleeve of his track suit to reveal a very large gold watch and bracelets, in addition to those around his neck, and he also has a full mouth of gold teeth). But I had a second passion—cars. Of course within our community, I always registered my vehicles under someone else’s name, but how I loved luxury cars! Nothing ever makes me feel alive more, more like a real man, than the power of an engine revving! These cars were precious to me, and I never let anyone else use them.
25Around 2014, along with the economic crash I was injured on the job, and I no longer had the physical strength to carry out my work. Suddenly, I had a horrible feeling—I was stuck in America, with no official immigration status, no cash, no ability to continue in my profession, and nothing to show for my troubles except my gold and my cars.
26It was at this point that I tried driving for Uber—there is no really difficult immigration status check on the Uber platform, and I was able to deposit the money easily and set my own hours. In Los Angeles, most people don’t really speak English, so I was able to easily blend in. I even expanded and have other younger compatriots working for me as Uber drivers. They drive my cars, and I take a cut from their payments. I don’t really like having strangers in my vehicles, but it is either that, be deported, or starve.
Uber as a Retirement Platform
27Mikhail’s story provides an interesting commentary in the life of someone affiliated with the activities of the Russian underworld. It was apparent that he was deeply embedded in their blat network. His mother knew someone able to procure this position for him, and he demonstrated an entrepreneurial spirit by choosing to better his life by working in the United States. Upon arrival in the United States, he enjoyed a status similar to an independent contractor or freelance entrepreneur with a fixed set of clients—he could only pursue this occupation in a restricted set of circumstances, but he was rewarded based upon his ability to collect from potential clients.
28During his tenure as a “memory jogger”, he embodied the migratory space for play. Official U.S. policy discourages illegal immigration and these types of activities, which is at the strategic level of analysis. However, due to lax enforcement of immigration policy and a lack of governmental penetration into the Los Angeles-based Russian community, the tactical level is a different reality than that painted by politicians. This discrepancy between the tactical and the strategic enabled Mikhail to create his space for play. He operated within the confines of the Russian community (to the extent that after 25 years, he never learned English), collected his payments in cash, and spent his money on discretionary items without being monitored by the government.
29The items purchased by Mikhail were special to him and represented the success he enjoyed within this community. They were the embodiment of the extended self. The gold represented an ability to collect debts, and the powerful cars were signs of strength.
30Following his workplace injury, Mikhail’s identity began to change, as did his sense of extended self. He transitioned from a man to be feared and respected, capable of controlling the lives of others, to a man unable to control his own fate. Since his ability to remain financially viable in the United States was called into question, he altered his entrepreneurial spirit in order to operate within the same space for play, albeit with a different sense of extended self.
31The new version of his extended self meant that vehicles were no longer projections of himself, but were used for self preservation. He became willing to share these previous embodiments of the self for other’s use. He still existed within the Russian diaspora and, therefore, used his connections in the blat network to find others to drive his vehicles and pay him for that privilege. As Mikhail’s body aged and weakened, these material possessions became a means for self-sustainment during an economic crisis and through his gradual transition to retirement.
The Broader Impact of the Sharing Economy
32The beneficiaries these findings are principally immigrants without the possibility of conventional work and scholars who specialize in the processes of entrepreneurship in the sharing economy. Frequently, immigrants are stereotyped as those devoid of opportunities and not contributing to local or national development. This work has shown that through the sharing economy, Russian immigrants have found opportunities to earn enough money for a respectable quality of life despite immigration policy and are providing valuable services to the community. For scholars, this work depicts how renegotiated understandings of the extended self can lead entrepreneurially-minded individuals to carve out their own space for play in a national political sphere and within their own identities.
33Although this article has focused on Russians and their blat networks, it has interesting implications for alternative forms of entrepreneurship. Any close-knit immigrant community can raise capital and engage in the sharing economy, because they typically have a high degree of social capital [15] similar to blat networks. In addition, it illustrates ways in which immigrants can earn a dignified living, irrespective of their immigration status.
34As forms of the sharing economy become more prevalent internationally, this space for play represents opportunities for illegitimate and illegal entrepreneurship. The sharing economy may represent a pathway to income tax avoidance, especially if funds are deposited in foreign bank accounts. Worker exploitation of a new precariat [16] class can arise—especially in Mikhail’s case where his employees were doubly exploited. They were not guaranteed a minimum wage since they were Uber contractors and not employees— plus Mikhail was receiving an unmonitored cut from their wages for the use of his vehicles.
35The rise of the sharing economy has interesting implications for understanding the extended self—property may be transitioning from an illustration of self-image. In Vanya’s case, property may be used by entrepreneurs to promote self-survival and to live a chosen lifestyle. In Mikhail’s case, property may be a cultural reflection of fear, and property can be used as an instrument of power and of further exploitation, as Marx [17] described.
36Since the sharing economy is still a relatively new phenomenon, it is difficult to determine whether sharing economy platforms will be used for empowerment or exploitation. There is still a degree of interpretative flexibility [18] which raises important questions for both entrepreneurs and policy makers, especially the dichotomy between employer flexibility and worker protection. Airbnb and Uber provide employment opportunities for illegal aliens who have limited opportunities for legitimate employment. Vanya would have been unable to remain in the United States without the income he earned by renting out his father’s properties. Moreover, he created new jobs for other unauthorized immigrants. Without Airbnb, these individuals would have engaged in other occupations, leading them in a trajectory similar to Mikhail’s.
37Mikhail’s use of Uber is less nefarious than his previous occupation. He used his vehicles to generate sustainable income for himself and his drivers. Like Vanya, Mikhail and his drivers may not have been able to procure employment in the legitimate economy without access to Uber.
38Sharing economy platforms can contribute to greater employment, especially under the current political climate. However, there is a need for increased regulation of these platforms. Employees of individuals like Vanya and Mikhail do not benefit from a guaranteed minimum wage, retirement plan, or employee provided healthcare. This concern is reflected in discussions about the sharing economy more generally [19]. Illegal immigrants are particularly vulnerable due to the threat of deportation and lack of access to social welfare programs. This vulnerability necessitates legislation to protect such workers. Policy makers should encourage employment while simultaneously ensuring work free of exploitation and guarantees of basic workplace protections.
Notes
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Rehn, A., & Taalas, S. (2004). ‘Znakomstva I Svyazi’ (Acquaintances and connections)–Blat, the Soviet Union, and mundane entrepreneurship. Entrepreneurship & Regional Development, 16(3), 235-250.
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[5]
Hjorth, D. (2005). Organizational entrepreneurship: With de Certeau on creating heterotopias (or spaces for play). Journal of management inquiry, 14(4), 386-398.
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James, W. (2013). Principles of psychology. Hardpress Limited.
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Williams, C. C. (2008). Beyond necessity-driven versus opportunity-driven entrepreneurship: a study of informal entrepreneurs in England, Russia and Ukraine. The International Journal of Entrepreneurship and Innovation, 9(3), 157-165.
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[11]
Hjorth, D. (2005). Organizational entrepreneurship: With de Certeau on creating heterotopias (or spaces for play). Journal of management inquiry, 14(4), 386-398.
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[12]
Johannisson, B., & Olaison, L. (2007). The moment of truth—Reconstructing entrepreneurship and social capital in the eye of the storm. Review of social economy, 65(1), 55-78.
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[13]
Engstrom, C. (2012). An autoethnographic account of prosaic entrepreneurship. Tamara Journal of Critical Organisation Inquiry, 10(1), 41.
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[14]
Hjorth, D. (2005). Organizational entrepreneurship: With de Certeau on creating heterotopias (or spaces for play). Journal of management inquiry, 14(4), 386-398.
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[15]
Peredo, A. M., & Chrisman, J. J. (2006). Toward a theory of community-based enterprise. Academy of Management Review, 31(2), 309-328.
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[16]
Schor, J. (2016). DEBATING THE SHARING ECONOMY. Journal of Self-Governance & Management Economics, 4(3).
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[17]
Marx, K. (2013). Manifesto of the communist party. Simon and Schuster.
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[18]
Leonardi, P. M., & Barley, S. R. (2010). What’s under construction here? Social action, materiality, and power in constructivist studies of technology and organizing. Academy of Management Annals, 4(1), 1-51.
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[19]
Schor, J. (2016). DEBATING THE SHARING ECONOMY. Journal of Self-Governance & Management Economics, 4(3).
