The Sharing Economy is the gold rush of our generation. It is a new, technological system which generates a hell of a lot of money – and looking to become even bigger. Ideal for the individual, the sharing economy is a globally accepted phenomenon which uses new technologies to its advantage. For those who aren’t aware of the brilliance of this industry, wait till you hear what I’ve got to say about it…
What is the Sharing Economy?
For those who don’t know, the sharing, collaboration or “gig” economy (we’ll stick to sharing economy to shorten the word count) is a socio-economic system built around the sharing of resources or services. Typically, these assets or skills are shared between private individuals either for free or for a fee.
There are three types of actors for any sharing economy business: the platform provider, the service provider, and the customers. Where the platform provider acts as a host for the service provider to work with the customer.
You’ve probably heard of the big names such as Uber or Airbnb which operate in the sharing economy. Let’s use Uber as an example – Uber is the platform provider, the drivers are the service provider, and the riders are the customer. Uber isn’t a taxi company and Airbnb isn’t an estate agency – they are tech companies – and it’s their responsibility to host the service of freelance taxi drivers.
The beauty of being a company working in the sharing economy is that you don’t provide the primary service – your users do. This saves an excruciating amount of costs for any business, as well as time. The business model of ‘let the users do all the work’ is proving to be an ideal destination for investor traffic, with the UK Sharing Economy looking to be worth £140 billion by 2025.
For users, it appears it’s ridiculously popular with the younger generation, with 78% of 18-24 year olds using technology in the UK Sharing Economy in 2018. In the same year, 62% of the total UK population has participated in sharing economy activities. While these stats may have increased since 2018, it still shows the staggering attractiveness of the sharing economy – set to skyrocket even further with services such as Deliveroo and UberEats exponentially growing in demand since the start of the pandemic. How many times did you order fast food while being holed away in your home during lockdown?
What’s so great about the Sharing Economy?
If I haven’t already boasted about the sharing economy enough, then let’s breakdown the benefits:
- Unrivalled Flexibility. Alternative to working in an office every day, the sharing economy allows for its users to work from anywhere, whenever they want. You can carry out any task, as long as you’re connected to internet either from your smartphone or desktop.
- Reducing Environmental Impact. This way of working improves resource efficiency and promotes sustainable growth by mitigating excess consumption. Due to not needing to commute to locations, this means that users have a reduced carbon footprint. When everything is kept virtual, this benefits the environment through the lesser need for any physical waste, such as paper.
- Monetizing underutilised assets. Through allowing people to perform their services outside of typical working activities, this means they can generate money in their spare time using their skillset and experience. This helps users in an economical sense, as they can then generate more money whenever they want.
- Extreme Efficiency. We speak about it all the time on this blog – efficiency. The sharing economy promotes efficiency in a number of ways. First of all, with users not needing to commute, it means that time is saved on travelling to and from destinations. As well as this, consumers of the sharing economy save time from finding the ideal business partner quicker by using technology, where matches can be almost instantaneous. This technology also allows for users to compare service providers as quickly as possible.
- Trusting Culture. Sharing economy platforms tend to promote trust through review and reputation systems, where users can look at the previous experiences easier than if they were to work with them outside of the sharing economy. How regularly do you look at a hotel’s TripAdvisor results before you book a room?
- Saving Money and Resources. Rather than actually purchasing an item or keeping it for the long term, the sharing economy allows its users to get access to products they only need for the short term. This reduces overall cost, and increases the utilisation of resources over the product’s lifetime. RentMy.com is a great example of this.
- Reasonable pricing. Linked to the previous point, consumers of the sharing economy can easily compare the prices of goods and services. Not only this, but the reduced costs for organisations working in the sharing economy allows for them to offer cheaper prices when compared to their non-sharing economy competitors. Uber became ridiculously competitive in pricing compared to traditional taxi services – arguably disrupting the taxi industry permanently!
- Empowering Entrepreneurs. The sharing economy acts as a hub of creativity and innovation, where they can help produce the best start-ups for a dynamic modern society. It allows for entrepreneurs to work beyond the limitations caused from a lack of assets, capital and support – and makes the makes life easier for aspiring entrepreneurs. All you really need is an idea along with the internet.
While these are some of the key benefits of the sharing economy, there are arguably many more!
Is there anything bad with the Sharing Economy?
Yes, I know – I haven’t stopped talking about how great the sharing economy is, so it’s probably strange that I’m even considering raising any negative points… but this is RekkBlog – we’re the best critical thinkers there are! Let’s get to the facts:
- Regulatory Uncertainty – as a fairly new sector, the sharing economy is growing rapidly, making it hard for regulatory bodies to keep up
- Missing out on employee benefits – as a freelancer, service providers on the platform do not receive law enforced benefits enjoyed by full-time employees – such as holiday pay, sick pay and bonuses
- Unclear taxes – if a sharing economy platform operates from outside of the host country, then it makes it more difficult for tax authorities to collect taxes
- Lower security – as with anything technology related, there is always the risk of digital information being leaked either through technological problems, or trusting your information with another user on the platform
Are the problems that bad?
While regulation issues are certainly eligible problems, we can agree that at some stage the regulation of the sharing economy will eventually catch up as it does with any industry. With Uber recently losing their court case which declares their drivers as employees rather than self-employed, precedents are being set to govern and legally oversee what happens in the Sharing Economy. It’s a slow fix but not an impossible one.
This ties in beautifully to my next point – service providers missing out on employee benefits. As previously mentioned, the Uber employee case sets a precedent which means that the drivers are considered as employees and therefore, receive all the benefits reaped by full-time members of staff.
On top of this, companies like Hermes (courier service), allow their self-employed delivery drivers to opt-in for the “Self-Employed Plus” scheme, which gives the freelancers an option to receive the benefits of an employee (holiday pay, union support, guaranteed minimum wage, etc). While it may be a problem, it certainly has solutions which are being put into play.
Next up – unclear taxes. While this is a bit foggy of a foggy topic, it’s something that the government is certainly taking a look at. In December 2020, the UK government officially stated that tighter tax restrictions to the sharing economy are something it is considering, ensuring that there is a “level playing field” for all businesses. This again is something we’ll have to wait to see to unfold…
Finally, lower information security was another issue which arises from the sharing economy. As with Uber in 2016 (yes – Uber again!), we saw a big data leak caused by hackers. This generally created the question of whether the information provided to sharing economy businesses is even safe.
Of course, there are standard anti-virus and endpoint detection software that are in place, but further protections based on containerisation, anti-keylogging and anti-screen scraping should be implemented as a norm for any tech organisation. With regards to sharing information with other users of the platform, this is security is something which is important for the platform provider to effectively manage with thorough terms & conditions which inform users of the repercussions of sharing any information. This is also enforced by GDPR (General Data Protection Regulation) laws put in place by the government.
Rekkruut works hand in hand with the sharing economy…
You may confuse Rekkruut for being a recruitment agency – and don’t worry, we forgive you! But we’re actually a tech company operating in the sharing economy. Our platform invites recruitment consultants who are looking to become freelancers and build their own business by acting as a service provider on our platform.
Our “Rekkruuters” can carry out all the day-to-day activities of a recruitment consultant, while our company will provide them with the tools and resources to do so. This reduction in costs means that we can then empower the independent Rekkruuter and help them build their own enterprise, while they take 75% commission (as well as milestone bonuses and referral fees along the way). Our profile-building and networking platform allows for Rekkruuters to connect with jobseekers and employers operating in the technology and construction sectors.
Once connecting with clients and candidates, Rekkruuters can then carry out interviews and meetings via video call, while also communicating through our instant messaging service. This promotes efficiency and also allows for a better business relationship to be built.
We want to build a trusting community. Where we have a review-based system which allows users to innovatively record the services provided by one another. This allows for any potential clients and candidates to evaluate the integrity of our Rekkruuters.
Not only this, but we want to genuinely help everyone. That’s why we will also be introducing the RekkHub – a completely free service that provides tips for recruiters, jobseekers and employers looking to develop themselves in any way. We will help jobseekers learn valuable information with regards to CV building, interviewing, and building a road map on how to reach their end goal of the career they want. We will provide employers with the tools to effectively manage their HR and interviewing techniques. We will empower the independent recruitment consultant by helping them manage their portfolio of jobseekers and employers in the most efficient and effective way.
We make recruitment easy. We make recruitment fast. We are Rekkruut.
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