Magazine excerpt: Making money on the side
André Roque asks, can the new peer-to-peer economy survive?
Over the last few years, we’ve witnessed the explosion of the sharing economy. From Zipcar to Uber, from Airbnb to Couchsurfing – thousands of people are making and saving money by sharing their assets. For most it’s a side income supplementing their day job.
But while we’re taking steps away from the capitalist economy and moving back towards a skill-and-asset-swapping culture, we’re also discovering that this kind of peer-to-peer
economy comes with its own, often surprising challenges. So, can it survive or will it sink?
If we look at some of the biggest names in the asset-swapping game – Uber and Airbnb – it doesn’t take long to dig up plenty of information on both platforms’ ongoing struggles with regulatory hurdles. And these hurdles come from governments trying to get their heads around this new landscape, creating new legislation aimed at protecting their assets as well as the public’s.
Sharing your assets may feel like second nature to a lot of Airbnb users, but the wider landscape is still fragile and yet to be explored. As is evident by the FT Sharing Economy European Summit,1 where the most informed brains came together to point out the possible pitfalls and concerns for those navigating this new marketplace.
how can a company that’s just connecting people with services they require be sure their labour is in a secure and properly benefited working environment?
A lot of sharing economy-reliant companies are (in theory) just connecting those with a skill (“I can drive and need some extra money”) with those who require that skill (“I have a little money and need to get somewhere by car”). But how can a company that’s just connecting people with services they require be sure their labour is in a secure and properly benefited working environment?
Zero-hours contracts aside, there are concerns that a female cleaner, for instance, can be denied employment status, and therefore maternity pay and other benefits, despite working for a single company.
Some companies are beginning to address this – helpling.com, for example, has strict rules around providing the London living wage to its cleaning staff . In fact, the platform’s CEO Alex Depledge says that their ultimate aim is to destroy the black markets that have been exploiting the housekeeping labour force for so long.
As self-employment via online platforms becomes more common, governments will need to step in to protect workers. However, the sharing economy can also contribute to the wider economy. It’s fair to say, for example, that an increase in Uber drivers will mean an increased demand for car-cleaning services in the same area.
Or a higher number of Airbnb properties will lead to a greater need for ‘on demand’ cleaning services.
Reputation and trust
But what happens when we lose trust? Uber has suffered massive knocks to its reputation and subsequently promised more rigorous screening processes for hiring drivers, and in these periods of mistrust it’s the traditional services that people will go back to – in this case, black cabs.
In the case of Airbnb, it will be traditional B&Bs and hotels. The whole idea of a sharing economy relies on utopian values, and on the delicate balance of no-one abusing the opportunities it provides. We need to trust the cleaner we’re letting into our house. In the past, this was based on personal recommendation; now it comes in the form of a trusted platform.
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