When we talk about the sharing economy, the same names tend to come up over and over. Although there’s certainly a reason that Uber, Airbnb, and Lyft get a lot of press, under the surface there’s a much wider picture of what the sharing economy can mean. At Exygy, we like to look at all the possibilities within rising movements, and exploring the sharing economy is essential because rather than being a passing fad, it’s becoming a growing presence in many aspects of how we live our lives. This will only increase over time, so it’s important to take a close look at it.

A lot is made of the ingenuity of the sharing economy business model. It seems obvious now, and because it saves so many of us so much money and is so easy to do, we wonder why someone didn’t think of it before. There are other issues besides our wallets to consider, though. As is becoming evident in the taxi industry, disruption does not only mean radical innovation; it can also lead to a very sudden loss of livelihood for those who continue do things the old-fashioned way.

Disruption does not only mean radical innovation; it can also lead to a very sudden loss of livelihood

 

Some argue that this is the harsh reality of how the free market works – adapt or die. Others have tried to fight against this cutthroat way of thinking, in some areas even passing legislation outlawing certain sharing services.

Given that the sharing economy is unlikely to disappear outright, it’ll be necessary to find some middle ground where sharing services can conduct their business legally and fairly, while still giving other types of companies a chance to figure out what their modified business strategies will be in this new context.

The Case of Errand and Task Outsourcing

To get a feel for both the positive and negative effects of the sharing economy, we can focus in on one type of sharing service that is growing rapidly and disrupting in every sense of the word: task outsourcing. I’m sure there are items on your to-do list that you really don’t want to do.

Most of the time, we just force ourselves to get them done, but with the new magic of the sharing economy, you can now hand these tasks over to people who wouldn’t mind doing them for you, for a small fee.

These could be daily errands or other work that an assistant might do, like making phone calls or doing online research, and the fees are about five dollars, in most cases. Sites like Fiverr and TaskRabbit have literally thousands of people ready and waiting to do work for you, people who are more than willing to deliver results for almost no money.

This sounds great, right? People are eagerly stepping up to do this work that others don’t want to do or can’t do, and it’s helping those who want to pay to have it done. On the surface, it seems like everyone wins.

But it’s not just menial tasks that one can outsource on sites like Fiverr

But it’s not just menial tasks that one can outsource on sites like Fiverr. There’s also a huge community of creative people there, photographers and artists and designers and writers, all trying to get customers to hire them in their chosen field, even if it’s only for a one-off job, and even if they’ll only get five dollars for it.

That’s not all as desperate as it sounds – the good side of these kinds of sharing services is that they give creative people a place to showcase their work and get their proverbial feet in a lot of doors. The sites open up a much greater pool of potential customers for artists, writers, and designers who might not otherwise get such a huge amount of traffic.

Some creatives have built a significant and dynamic following that they wouldn’t have had otherwise had it not been for sites like Fiverr. As any creative person will tell you, the more eyes you can get on your work, the better off you will be in terms of building a client base, and of course a client base is everything if you want to be able to support yourself.

The downside to this kind of cheap task-sharing is that there is a significant risk of devaluing work for which many trained and experienced professionals would normally expect much higher payment. A seasoned graphic designer, for example, must feel incredibly disheartened to see that there are people on Fiverr who will design a company logo for five dollars, when the market price for that kind of work generally starts in the mid three-digits.

The hope is that most people will realize you get what you pay for

 

Of course, the hope is that most people will realize you get what you pay for, that if you’re willing to settle for a five-dollar logo, then you’ll probably end up with a logo that looks like you paid five dollars for it.

The truth, though, is a bit more complicated. Many of the designers offering work for a few dollars are incredibly skilled at what they do, and provide quality product on a par with any of the top design firms. Some are simply treating the low-cost-work web platform as a loss-leader, in the hopes that a happy customer will be a returning customer, and that most people will understand that the initial low-cost offer was simply a one-time thing to help build momentum.

Others only offer a very basic service for the entry-level price, adding on additional extras for significant amounts more. Still, the worry is that if customers become accustomed to receiving something for almost nothing, soon all creative fields could go the way of the music industry, with consumers incredibly reluctant to start paying good money again for something they’ve been getting through peer-to-peer sharing.

Forging a New Path

Task outsourcing, of course, is just one example of how the sharing economy can be both exciting and terrifying. From ride-sharing to house-sharing and beyond, industries are starting to see the double-edge of how convenience and low costs set market trends, while many small, independent businesses struggle to keep up.

At the moment, it’s difficult to see where the middle road is, and what sorts of changes will need to happen in order for everyone to get along. Government regulation seems to be playing a part already, but as we’ve seen in the case of Uber in Germany, once a business system proves profitable past a certain level and the company can afford a decent legal team, there’s very little that will stop them from continuing to operate if that’s what they’ve chosen to do.

To survive, companies have to adapt

The next few years will be key. Certainly some old-school businesses will be forced to give up and join the sharing economy trend, while others may simply adjust their business model to provide a unique selling point that sharing services can’t offer. Some will fail altogether.

Whatever individual businesses decide to do, it’s obvious that continuing on as normal and pretending it’s all going to be okay isn’t going to save a company from going under, nor will blaming sharing services for ruining everything help to solve any issues. To survive, companies have to adapt, and all that remains to be seen is how that adaptation manifests in the ever-increasing complexity of the relationships between businesses, governments, and consumers.