The Sharing Economy: Balance Please!

The past couple of weeks have seen a flurry of articles shining a spotlight on the trials and tribulations of working in the ‘sharing economy’.

Prominent pieces have appeared in the Guardian, the International Business Times and the New York Magazine examining tech companies’ relationship with the people who use their services to find work and asking if those people are getting a fair deal.

Whilst it is absolutely vital (and welcome) that the sharing economy is examined, it is also important that people understand the nuances of the debate in order to avoid the sharing economy label becoming a burden.

Defining the sharing economy

The runaway success of young, disruptive firms like Airbnb and Uber (valued at $10 billion and $17 billion respectively) has helped to popularise the sharing economy moniker. Investors are naturally attracted to buzz terms and there is no doubt that being associated with the phrase can help raise interest from business, media and consumers alike.

Indeed, PwC’s recent forecast that the sharing economy in the UK — currently worth $0.5 billion — has the potential to be worth $9 billion by 2025 gives an idea of the energy around the sector and the positive benefits of being linked with it.

I see the sharing economy as an umbrella term covering a wide array of operational models rather than being one clear tangible entity. The common factor in the sharing economy tends to be the technology behind the service or the peer-to-peer marketplace model used to connect communities.

Some firms, such as Airbnb, look to utilise spare capacity, time or resources. While others look to professionalise a person’s skills and help them gain employment.

Much of the recent media criticism of the sharing economy is being levelled at the former group — implying that it is not possible (or extremely difficult) to make a secure and full-time living from their platforms. But if a platform is designed only to utilise spare capacity or resources it isn’t fair to hold it to account for not working smoothly when scaled up for full-time use.

Division of labour in the sharing economy

In many of the recent articles examining the difficulty for workers relying on the sharing economy for their livelihood there has been a mismatch in understanding and expectation of how marketplaces helping people to find work (rather than share capacity or resources) should function.

On one hand there are marketplaces (such as Hassle.com) that aim to enable those who are specialising in one type of employment only – like cleaners, handymen or personal tutors, for example. These marketplaces are built to help empower people to in effect become micro-entrepreneurs.

Instead of being at the mercy of the old-fashion agency model, or being forced to operate in the untaxed and unregulated cash in hand informal economy, workers can use marketplaces to extend their potential customer base, formalise their working schedule and create clear, defined working arrangements with their clients.

The other type of marketplace – and the one that is receiving most of the harsh public scrutiny – is built more to give people a platform for occasional, extra work to top up their income.

Tension can occur when people try to use them to provide a full-time income, often to replace a lost livelihood in the traditional economy. So rather than specialising in one profession people can get drawn into a series of odd-jobs across different marketplaces involving entirely different job skills.

This jigsaw approach increases the chances of work being irregular and disjointed and workers miss the opportunities that specialisation can bring — such as a loyal customer base and building a thorough understanding of their sector.

For those operating in the segment of the sharing economy driving the move to create sustainable full-time, specialised work it is vital that these differences are made clear. Judging all marketplaces against the same set of expectations does not do any sector any favours and serves to blemish the economy’s overall reputation.

Education is vital for progression

The sharing economy faces many challenges and it’s vital these are addressed. But organisations coming under the label need to educate media, public and investors alike on the different models that fall under the sharing economy umbrella and the correct expectations that should be set for them all.

This will help ensure that the public dialogue on all matters like is fair and balanced and not all companies are tarred with the same brush or blamed for issues that occur when a platform is used for something it is not designed to do. It will also help workers understand what model best suits their personal situation and avoid them making choices not in their best interest.

The sharing economy holds unlimited potential and opportunity, let’s make sure that the term is something businesses can be rightly proud of sharing, rather than something they would rather held by others.