With some of the poster-child services of the sharing economy now becoming more mainstream it is interesting to follow the developments that are taking place in this early stage of development.
All those actively participating in services such as Uber, AirB&B and Lyft have seen regulations creeping up on them, be it in relation to paying tax over the income generated from renting out a room in the house or regulations applying to driving passengers around.
Also, the vested industries have made adjustments to their businesses and are competing more strongly, with the sharing economy in mind. In all, this means that the margins in the initial stages of the sharing economy have either shrunk or have stayed the same.
At that level of the sharing economy it can be concluded that at this stage it will work for those participants who simply want to make a few extra dollars, but not for those who want to build a more or less permanent job in this sector – the margins for that are often simply not there. In the case of Uber, for example, after properly calculating the costs of their cars, petrol, maintenance, and so on, many drivers end up with an hourly rate under the minimum wage.
In the case of AirB&B people also have become more cautious. While most users of the services receive a positive reaction, there are also disappointments on both sides. Negative messages from both providers and customers spread around quite quickly, making people more cautious. Nevertheless, as this is not just about ‘a wage’ the long-term survival of AirB&B is much more secure – any extra income from an empty room in the house might be seen as extra income.
But that is not to say that these new services are sitting still. New interesting additions are being added. Cities with transport problems are taking advantage of Uber, using them to fill gaps in their transport network; and they are also being used for certain services such as providing transport for healthcare and aged care facilities. This is proving to be a substantial cost saving on the extra services that would be required from their existing transport systems. All sorts of other transport sharing services are being explored such as freight and executive air travel.
And we see cities and other levels of government using AirB&B in cases of natural disaster, where a large number of people suddenly need to be temporarily relocated. AirB&B also plays an important role in refugee services in Europe.
In general other services, such as babysitting, gardening, shopping, catering, etc, are not the main income for the people that offer such services and most of them will see it as a bit of extra pocket money. This is where a significant part of the sharing economy will evolve; and we can also add community services and voluntary work to this, as they are much easier to develop, run and coordinate with the tools available within the sharing economy.
Smart cities understand the advantages of these citizen-based services and are actively involved in facilitating them in order to maintain a high level of social services in a market where the demand for it is growing (eg, because of an ageing society) and where at the same time smaller budgets are available to them to deliver those services.
So, with the first stage of the sharing economy behind us it is now time to start looking at other innovative services in the sharing economy, perhaps based more on collaboration or co-competition. The internet and mobile apps allow people to find each other much more easily.
The digital economy also cuts through government, industry and company silos. The transformation that will take place as a consequence of this will result in more vertical layers, and business, communication and services will increasingly be shared across these silos. ICT is driving this transformation towards more horizontal structures.
This forces people involved in the original silos to think more laterally and cooperate with others. This leads to further collaboration and as such can also been seen as new developments in the sharing economy.
As is already clear from other developments in the digital economy, this is a dynamic and fluid market with new twists and turns around every corner. Those who take a strategic view of these developments – have a strong vision in place about their own role (be it as a business or a private person) and are aware of the opportunities, pitfalls and future possibilities – will be able to ride the waves and make adjustments on the way. Those who don’t will soon find that what looked like a great idea in the first place doesn’t turn out to be the success story they had hoped for.
And, as in other industries where ‘quick and lucrative’ income is promised, there are always sharks around preying on those who enter the brave new sharing economy in a naive way.