WHETHER YOU CALL IT THE SHARING ECONOMY, GIG ECONOMY OR ON-DEMAND ECONOMY, THE MILLENNIAL GENERATION IS THE DRIVING FORCE BEHIND A NEW STYLE OF BUSINESS.
When we think about some of the big business success stories since the financial crash of 2008, certain names come to mind. In hotels and hospitality, we might think Airbnb. In entertainment, Spotify. If we think about transport, then Uber is likely to feature. And in terms of retail, once we get past the meteoric rise of the ubiquitous Amazon, Ebay would be an important player.
But whereas in the past, the short-stay accommodation provider might be required, at the very least, to invest in some bricks and mortar, or the music store to hold a certain stock level of the latest Ed Sheeran album, today’s businesses are not only ‘asset light’ – many are ‘asset non-existent’.
In this new paradigm of business efficiency where we forsake ownership for temporary usage, there is a freedom and flexibility never before experienced by the cash paying public.
With a few flicks of the finger, we can fire up our smartphone and book an apartment in Lower Manhattan, or stream the latest Arashi single to our headphones (No? They’re Japan’s biggest selling pop band of 2016).
Technology is at the heart of this latest revolution. There’s nothing new about the sharing economy; 400 years ago, the farmer would have happily traded his turnips for the baker’ loaf. But his market was always local. Today’s technology means we can book rooms around the world or sell our old sneakers to a collector in Singapore.
Technology enables the stayer to rate the rooms and the owner to rate the guest, the traveler to book the cab and the driver to say he’s two minutes away. Technology builds trust. Technology makes life easier. And technology travels light.
As with any gig, you only get paid for the time you’re on stage. (Nobody’s paying for the rehearsals or transporting the drum kit.) ‘Zero hours’ contracts are causing concern across the political spectrum as unscrupulous employers use them to drive down wages and lower working conditions.
And what happens, when your luxury flat in Cologne gets trashed by a group of leather-clad thrash metal enthusiasts who just happened to pop in for a party with that nice, young man you loaned it to?
While promising opportunities for new business creation, risk liability, insurance, transparency, and workforce protection issues continue to hinder the progress of the Sharing Economy. As does the fact that technological innovation and social change has often outpaced regulatory frameworks, resulting in banned services and protest from those working in traditional industries.
The future of commerce may well be of the sharing variety, but how can you ensure you enjoy the benefits without running the risks? If it is to flourish, companies must work together with policy makers to drive the sharing economy forward in an equitable way to benefit all parties involved in its exchanges.