The sharing economy is also referred to as the peer-to-peer economy, mesh economy, gig economy and collaborative consumption model. It is a socio-economic system built around the sharing of human and physical assets including the shared creation, production, distribution, trade and consumption of goods and services by different people and organizations. The sharing economy is rapidly growing as technology and peer-to-peer communities have facilitated the communication, trust and collaboration necessary to make it work.
The “gig economy”, a term often interchanged with the more well known concept “ the sharing economy”, is a growing trend in New York and in other densely populated cities. The concept is simple and surprisingly familiar; the trading of any one person's time or skill for another person's financial capital. The only distinct difference from the service economy is the enabling of direct communication between individuals, eliminating the added cost and time of third party service providers.
Technology is the driving force behind the influx of peer-to-peer trading and lending of time, space and goods. The Internet and the emergence of social networking sites have increased transparency and level of trust among strangers. So much so that individuals entirely unfamiliar are signing up for services that provide on-demand massages in other’s homes (Zeel), lend couches to lone travelers (couchsurfing), and rent out homes to strangers (AirBNB). Some services are free of charge, other’s have business models with intuitive structures: users express their needs, how much they are willing to pay and vice versa. Workers in the gig-economy are usually unemployed or individuals who want to live less restricted by traditional work schedules.
The ability to find instant gratification, an experience in which many have grown accustomed to online, is translating into the physical world with the influx of “on demand” sharing economy services. The trend is also a driving force of people's need to spend their time more efficiently. In busy, high demand cities like New York, people are constantly on the go and value efficiency in their use of time and resources.Time is a bottleneck for many, while need for extra income is a consistent issue for most. As a result, gig economy companies are promoting their ability to resolve users needs “on demand”. AirBNB offers instant booking, Drizly delivers liquor within an hour and WunWun will deliver anything you can dream of within 45 minutes as long as it fits on bike.
New York is a particularly attractive market for this new economy to thrive. New York Times Opinion-Editor Thomas L. Friedman has repeatedly expressed his positive view of the sharing economy; advocating that companies in the sharing economy are “not the only answer for our economic woes — they create jobs, destroy jobs and create big efficiency savings all at once — but they are surely part of the answer, and it’s a shame that we don’t spend more time thinking about how to multiply them.” While many are commending this growing marketplace of micro-entrepreneurs, concerns are raised in regards to these services recurring lack of security and insurance policies, and these service’ failure to uphold their promises to workers; advocating balanced lifestyles, increased freedom and financial prosperity as benefits of signing up. Fast Company journalist, Sarah Kessler, recently wrote an extensive piece about her experience in the gig-economy. Having taken time off work to explore life as a micro-entrepreneur she described it as little more than “hard work, low pay and a system that puts workers at disadvantage”.
Criticism and concerns
Despite the rapid success sharing economy companies are seeing, concerns of their future prosperity is real.
Legal concerns continue to rise as many fail to comply with state laws, often because laws and regulations tend to drastically differ across borders; both on a state-by-state basis as well as internationally. Whether legal systems will be able to keep up with innovation is yet to be determined.
Declining payment levels for workers has become an issue as supply and demand levels grow disproportionately. Supply continues to boom with the amount of foreigners adding their inexpensive skills to the marketplace of US citizens looking for web designers, developers and virtual personal assistants. As a result, micro-entrepreneurs in the US find themselves competing with foreigners whom consider $5 dollars per assignment relatively good pay (Fiverr).
Safety and security issues have become consistent subjects of concern. Because most of these services rely on peer-to-peer trust and minor involvement of third parties, sometimes, it is to go wrong. Zeel, the app that offers “on demand” massages in your home, has, unsurprisingly, experienced their share of slightly unethical requests. AirBNB hosts have had their apartments trashed. Car sharing services like Uber and Lyft, are consistently dealing with insurance and legal complaints.
However, sharing economy companies are lean; they learn by doing and rapidly find ways to comply with laws to secure their continued service. Background checks, authentication processes, rating systems and public profiles have been implemented to deal with the inevitable pitfalls of a sharing economy that primarily relies on people’s conscience and intention to operate respectfully. As stated in Wired’s cover story in April 2014, “these new mechanisms for creating and safeguarding interpersonal trust may have the power to make us comfortable with people and experiences we would never have otherwise considered”.
Benefits for workers
Despite some of the natural concerns sharing economy companies encompass, they have become massively successful. Social media profiles provide users with sufficient transparency and direct communication elevated levels of respect towards one anothers time and belongings. Many argue that the gig economy functions as a safety net for the many unemployed workers who have become victims of the struggling economy. Although most people would agree that full-time jobs are the better option, the gig economy helps people keep afloat when times are tough. When the alternative cost is no money; some money is better. A more surprising benefactor of the gig economy is the growing number of people are using it to make friends. Lyft, an increasingly popular car sharing service which is currently working to comply with New York’s state laws in order to make their service available in the city, puts a premium on the development of friendships and conversation while sharing a ride. The company encourages passengers and drivers to rate each other; and in addition to marketing themselves as affordable and easy, claim to be “Your friend with a car”. In fact, drivers are prompted to wear pink mustaches to lighten the atmosphere as they navigate the road. Couchsurfing operates by similar principles, advocating that new friendships are the core of what makes traveling unique.
Complements a wider economy
New Yorker’s are famously open to innovation and new services. This very notion is the core of what drives New York’s unique ability to foster new business models and trends. Will the gig economy and the array of services leveraging it’s demand continue to rise? The increasing popularity of the sharing economy and the increasing level of trust people have in using these peer-to-peer services will continue to drive the blossoming of new sharing economy companies that compliment a wider economy in New York, a city filled with innovative, forward-thinking early adopters. As witnessed with the evolution of the service economy, as long as there is demand, someone will find a way to supply. Especially in New York City.
Services in the Gig-Economy
Bloom That: On-demand flower delivery. App allows you to select a bouquet, tell them when and where and have it delivered within 90 minutes. Available 7 days a week.
WunWun: Free delivery service from anywhere you want as long as it fits on a bike. Payment is solely for the item and a tip for the delivery man is encouraged.
Task Rabbit: Outsource errands you don’t want to do. Task Rabbit finds nearby qualified taskers that have had a undergone criminal record checks, in-person interviews, identity checks and training sessions. Pay by the hour at yours or theirs set price.
Lyft: Friendly and affordable car sharing service. Request a ride and be picked up within minutes.
Dogvacay: Find a dog sitter near you on the go. Rates start at $25/night and include free pet insurance, 24/7 customer support and daily photo updates.
Post Mates: Delivery service from any restaurant or store within the hour. Real time tracking and ETAs. Pricing starts at $5 and is determined based on distance of delivery.
Fiverr: Hire anyone for your graphics & design, writing & translation, ideo & animation, music & audio or programming & tech needs. Best of all? Flat rate of $5.
Odesk: Network of freelancers that will do anything one can do on a computer, ranging from developing an app to software management. Freelancers can be hired for big or small, short or ongoing and individual or team based jobs. You can also track workers.
Skillshare: Affordable education platform driven and powered by students.
Kitchensurf: Hire freelance chef’s to come to your home and make dinner. Decide cuisine, price, amount of guests and have your food catered.
Exec: Enter your location and find a maid or house cleaner in near proximity.
Other services: breather, air bnb, zip car, instacart, bloom that, zeel, wun wun, task rabbit, lyft, lendingclub, http://foodsharing.de/, parkatmyhouse, rent the runway, dogvacay, post mates, fiverr, kitchensurfing, exec, zirtual, fancy hands, cha cha, skillshare, tradesy, odesk