Sharing Economy Growth

As 2016 comes to a close, Talent Management 360 is offering detailed insights into some of the year’s top news stories and speculating on how these stories will likely continue to impact talent management in the coming year. The fifth article in our series examines the continued growth of the sharing economy.

Five years ago, few people had heard of the so-called sharing economy. By early 2016, the sharing economy had already transformed many industries. While the most well-known sharing economy platform is likely Airbnb, which continued to grow and transform travel in 2016, other platforms also continued to grow. The impact on the sharing economy is far-reaching and in 2017, there is no question that it will continue to make news and have impacts on how workers are recruited and managed.

 

The Sharing Economy by the Numbers

24% of Americans reported earning at least some money from a sharing economy platform over the past year. From dog walkers to writers to cleaners, Americans are increasingly topping up their incomes or making a living off online platforms. In 2016, a Pew Research Center survey of American adults that the sharing economy is more widespread than one might think.

  • 8% of American adults have earned money in the last year using sharing economy platform.
  • 18%  have earned money selling something online.
  • 1% have rented out a property on a home-sharing site.
With nearly a quarter of Americans making money in the sharing economy and many more using the same platforms to hire cleaners, handyman, drivers or to find rental accommodations, the real question is what is the impact?

How the Sharing Economy is Impacting Work

The impact of the sharing economy on hiring and management of talent has already been widespread. However, Arun Sundararajan, author of The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism, concludes, “I don’t expect that all of the world’s economic activity will be delivered through sharing-economy-like platforms…The exception, Airbnb, is simply one in which the capital-labor mix is very different. The fact that you’re sitting on under-utilized real estate capital lends itself well to the platform model because the labor component is not that big a driver of the costs.” This doesn’t mean that the sharing economy isn’t having a profound impact on labor issues. As Sundararajan further observes, “Work is most people’s primary social network and an important source of identity. As more and more people do not have this institutional affiliation, and are working more independently, cities will need to work to develop new community infrastructures, to be community creators for their freelance workforces.”

Sundararajan’s observations are shared by the National League of Cities (NLC). In short, not only are workplaces changing but broader communities are changing too as the sharing economy continues to expand. In a new report, the NLC emphasizes that as more workers rely on digital platforms, work issues will continue to change. First, benefits once funneled through employers will need to be replaced and this includes both retirement and health benefits. There is also concern that with no one watching, exploitation in the workplace situations may escalate. On the up side, young people with previous criminal records may find it easier to enter the workforce and rebuild their reputations and as a result, ease the burden on cities by moving into the economy in a productive way without substantial support from the social services.

Predictions for the Sharing Economy in 2017

It seems likely that in 2017, the sharing economy will continue to grow and mature and possibly take on new identities. Many industry insiders are now suggesting that while some sharing platforms are about sharing, others are really about commerce. If you use a platform to ride share, you’re sharing. If you hop in an Uber, you’re making a purchase. In one case, you’re just sharing resources and its a win-win situation. In another case, someone is trying to make a living and you’re paying for the convenience of not having to flag a cab. While these demarcations once were obscured by the fact that both platforms were online, in 2017, one can expect to see new and more precise labels enter the sharing economy. In other words, in 2017, the sharing economy may become simply one part of a much larger and complex digital platform driven economy. With this new classification, we can expect to gain greater insight to its impact on employers, employees and gigsters too.

December 19, 2016   Updated :December 23, 2016      

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