When the sharing economy emerged, it was seen as one of the means to reverse employment problems around the world
When the “sharing economy” emerged ten years ago, its promise of providing income to anyone who’s willing to share his or her resources, captured the imagination of investors and consumers alike. It can be an extra space in one’s car, as popularised by Uber, or a spare room at home, as led by Airbnb.
The proponents of the sharing economy believed that many had a surplus of one valuable commodity that could be used by others for some profit.
This led nine-to-five job holders and office workers into thinking about the untapped income that they can access if they share a bit of their asset, which in most cases would be their property and time.
For the most part, consumers were the biggest winners, as costs to hail a ride for a trip across the city dropped, and less expensive accommodation for a vacation became more widely available.
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The promise of convenience, of having access to services in a click on an app was a big win to customers. Both Uber and Airbnb became global brands in less than three years after they were launched. By 2025, PricewaterhouseCoopers (PwC) estimates the industry will churn US$335 billion in revenue.
But as investors plunked more money into on-demand service startups and asset-sharing platforms, the industry was pressured to turn profitable.
To turn green, startups were forced to cut the income share of affiliates. Eventually, the industry’s most prominent players became contractors of independent workers, and its affiliates started to demand more accountability.
In the world over, there’s been numerous worker strikes against on-demand service platforms as their affiliates and partners clamour for a higher share of income for their services. I
n the US, Uber drivers, had consistently gone on strike, most recently in May, just before the company went public. In 2015, a worker under on-demand cleaning service Handy, sued the startup after it reportedly paid her only US$14 for 30 hours of work.
Somehow, despite being at the frontline of their company’s services, workers have become the last priority in the sharing economy. Even the World Bank suggests it’s now time for investors to funnel their cash in startups with resilient business models and the ones that provide “upside to everyone that’s involved in their growth over time.”
Fortunately, based on my research, there are still a handful of startups, from the Asia Pacific to the US, that employs business models that prioritize both the consumers’ and their partners’ well-being, that startups may take lessons from.
Transparent business terms to affiliates
In Australia, the leading cleaning booking service in the country called Urban You made its terms for affiliates the most straightforward and transparent in the industry.
On its website, it already bares that it offers AUS$25 for every hour of service to a cleaner, about 30 per cent more than the national minimum wage average in the country, which is at AUS$17. Partners are also motivated, as they get to keep about 75 per cent of the total fee charged by the company for every hour of service from customers.
This isn’t to say that the only way for the sharing economy work is to ensure partners get the lion’s share in business charges.
From all the leading cleaning booking service providers in the country, Urban You is also the most upfront in its offer to provide work insurance for affiliates, for a minimal fee of AUS$8 a week. That’s a perk that isn’t offered by most, if not, at all by platform companies.
In the US, car-sharing Turo is showing “ride-hailing” can still be a business for those who just merely want to make a profit out of their idle resources.
Instead of making car owners drive other strangers around the city, Turo allows them to have their vehicles rented by others either by the hour or by the day. Its biggest advantage over other services is the fleet of cars in its platform.
One can rent the latest Tesla, a Jeep, even a Porsche Macan, to name a few for over US$250 for a week. Meanwhile, the owners get the chance to pay not just their monthly car dues, but to save for another one, even for their dream cars.
These startups show that the sharing economy may still be inclusive for partners and that there are business models that platform owners can employ to create a truly beneficial and economical proposition for those who wish to participate in the industry.
It’s what my startup, Mober, an on-demand delivery service platform, wants to achieve with our newest program, “Driverpreneur.” Filipinos have always been madiskarte, a Filipino term for being resourceful and industrious. And if given an opportunity, they can be successful in business and in life.
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With the program, drivers will have the chance to own the service vehicles they use for the platform, under a creative “rent-to-own” scheme. A minimal fee that they pay to the company daily goes towards owning the vans.
Outside of that, drivers take home all their profits from the day’s delivery services and bring the vehicle home too. Mober even takes care of the vehicle’s maintenance so drivers aren’t hounded by fear of their cars breaking down and setting them back in terms of large repair costs and precious, precious time.
The program aims to go back to the roots of ride-sharing: providing income opportunities to those who are willing to share resources that they own, all the while being empowered as entrepreneurs and bosses of their own.
Back to the roots of an inclusive sharing economy
With an industry bound to reach more than US$300 billion in revenues by 2025, now is the time for startup players in the sharing economy to reassess their business models for sustainability. I believe Philippine startups can do their share in this effort, and I hope Mober’s “Driverpreneur” program can encourage others that an inclusive business model for partners is still possible.
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The World Bank even said it could help end poverty in developing countries. It may be time for the startups in the sharing economy to go back to its roots, embody the ideals they once fought for, beginning with more highly valued partners.
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Image Credit: Vlad Busuioc
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