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The Sharing Economy Boom

The peer-to-peer exchange of services is set to transform both work and ownership

14Oct

The sharing economy has exploded over the last few years, and the implications of this technology-driven economic model are beginning to be properly realized. From eBay to Airbnb, consumers are increasingly more comfortable interacting directly with one another, offering services ad hoc and saving on costs as a result.

As people are afforded a greater access to information, they are unsurprisingly more trusting of, and persuaded by, reviews over traditional advertising. Consumers can now bypass traditional marketplaces - ‘cutting out the middle man’ if you like - instead accessing a decentralized model of distribution that essentially creates more opportunities for everyone, whilst stripping power from some corporations. Technology evens the playing field between these corporations and individuals and, as a result, the market is now more hyper-competitive than ever. The more optimistic commentators see the economists’ theory of ‘perfect competition’ as edging closer to reality, the opposite of a monopoly as individual buyers and sellers become so numerous.

Peer-to-peer startups are springing up in just about every service industry you can imagine, and even the likes of Uber are under threat from more direct models. SideCar, for example, was an app that went one step further than the archetype of disruption that is Uber, allowing ‘regular’ drivers to pick people up en route, a digital hitchhiking system that turned every car journey into a potential moneymaker. SideCar folded at the turn of the year, something many attribute to it being ahead of its time; the user experience was clunky and it lacked the ease of Uber or Lyft and the more fluid model came perhaps a little too soon for a burgeoning market.

Perhaps the most interesting of the myriad share economy pioneers, though, are startups like TaskRabbit and Zaarly. Rather than providing one service - a lift, a food delivery, a cleaner - these apps cater for more general skills. The TaskRabbit app matches those who need a plumber, a gardener, a delivery driver, or a locksmith, for example, with a professional, depending on when the customer wants the work done and their location. Naturally, reviews play a huge part in the workings of the app and consumers will feel comfortable as a result. These apps are fascinating because they allow anyone to become a freelance worker. Users can earn money doing shopping for other users, delivering parcels, or walking dogs; a marketplace of services only curated, rather than managed, by an overarching body.

It’s the notion of sharing services and resources with others for a fee that underpins what could well be the future of the economy. The automobile is a good example - soon, it’s feasible that very few people will actually own cars, particularly within urban areas. Rather, people will have access to cars. It’s a crucial distinction, as we move toward an economy where ownership is less of a central tentpole, one where access is the key concept.

And access to the internet is another good example - startup Fon allows users to ‘get free access to the world’s largest WiFi network’ by virtue of opening their own up to other users. The scope of a project like this is immense, and the logistics are complex. Even so, the notion of a singular WiFi network shared by all is what many might consider utopian, in the same way that the urban population having access to the thousands of cars that line the streets unused makes a lot of sense on consideration.

The emerging boom is causing mayhem in UK tax. In March this year, the UK government announced a tax break specifically to cater for the sharing economy, allowing people to earn £2,000 before paying any tax from sites like Airbnb and eBay. This break only comes into effect in 2017, though, and the Telegraph has reported that the number of late tax returns will be pushed above one million for the first time ever, as people struggle to calculate how much they owe. It’s a temporary issue, but one that reflects just how much of an impact the sharing economy is expected to have on the wider economy - will tax have to be significantly recalibrate to cater for the growing number of people making their money through less ‘official’ channels?

Details aside, the sharing economy, in its current state, will eventually permeate other industries, and it could be set to revolutionize the way we work. Why should a writer ever be given a staff job if freelancing becomes the norm in the industry? Why would an interior designer be contracted to a company when they can find work in their area themselves? The scope of the sharing economy is vast, and we’re just at the beginning of a major shift. 

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