TaskRabbit's fate illustrates Silicon Valley's unbounded idealism when it comes to optimizing everything. The company was a catalyst for "collaborative consumption," a movement in which everyone would share their homes, their vehicles and their time. In a seminal TED talk, Rachel Botsman declared that the currency of the new economy was trust, not money. PwC predicted that TaskRabbit and its sharing economy peers would comprise a $335 billion market by 2025.

Unlike traditional commerce, which was cold and profit-driven, collaborative consumption revolved around relationships and reputation. Lyft was "Your Friend With a Car," not a money-grubbing corporation. TaskRabbit offered "service networking" — like social networking, but with labor. Other ventures formed around sharing home-cooked meals, storage space, power tools and camera equipment. Airbnb founder Joe Gebbia predicted that society would eventually abandon private ownership in favor of community-based sharing.

All the activity fell into a regulatory gray area. Early on, Lyft and other ride-sharing services didn't explicitly sell anything: They just took a percentage of the fares "donated" by customers. The companies involved organized an advocacy group called Peers, which campaigned to keep the sharing economy free of regulation — which, of course, was meant to rein in greedy capitalists seeking to exploit information asymmetries, not people who chose to share their resources with trusted peers. (Disclosure: I was the community organizer for the Silicon Valley chapter of Peers.)

When the subsidies went away, the platforms began to struggle.

I had a car and some spare time, so I signed up as a TaskRabbit. Heck, I became a Lyft driver and an Airbnb host as well. Any underutilization of resources was wasteful, I reasoned. Yet somehow my career as a service provider never felt as empowering as advertised. Prospective customers were more price-sensitive than one might expect from a community of peers. They treated my car and apartment worse than I would expect from a trusted friend.

For all the sharing economy's alleged virtues, participants primarily came for the cheap services. The companies had a cost advantage because they faced little or no regulatory burden, and because their investors were willing to subsidize low prices in an effort to build new markets. As soon as the subsidies went away, the platforms began to struggle.

Silicon Valley is obsessed with the idea that technology can iron out the inefficiencies of any system. The underutilization of our time and resources presents a tempting opportunity, but utopians often overlook the transaction costs associated with real-world commerce. As it turns out, burdens such as licensing, insurance and regulation go a long way toward facilitating transactions between strangers. If you take this into account, the outsourcing of one-off errands looks far less efficient.

The gig economy could even be considered dystopian, in the way it takes advantage of differences in the value of people's time. To some extent, it can provide cover for failing to pay a living wage. TaskRabbit likes to advertise its platform as a source of furniture assemblers, but another popular task is hiring people to stand in line at the Department of Motor Vehicles. Nothing underscores wealth inequality like paying someone to hold your place in line.

In Silicon Valley, bad business models never die — they temporarily disappear and later resurface with new buzzwords. Just as the sharing economy is fading, collaborative consumption has begun to reemerge on the blockchain. This time, underutilized resources like energy, disk space, and apartments will be tokenized and traded. If that doesn't work, maybe quantum artificial intelligence will be next.

*Ou is a blockchain engineer at Global Financial Access, a financial technology company in San Francisco. Previously she was a lecturer in the electrical and information engineering department at the University of Sydney.