Are you planning your summer vacation? I will be flying out to Asia tomorrow and like many of you, I'll be staying in some stranger's house in Bangkok that we booked through Airbnb. You can book a room, a house or even a chateau for anywhere from a couple of days to months from their owners. I relish the experience of having a home away from home and posing as a local in places like Chengdu, London and Portland.
Most people that I have talked to either love the idea behind Airbnb, or are baffled by this thought--why anyone would want to stay in some stranger's house? That same feeling is extended to many startups in the so-called Sharing Economy: Uber, TaskRabbit, Grubhub and their global counterparts such as Delivery Hero or Food Panda. We all love to have our needs and desires fulfilled, on-demand, by a simple click on our phone.
Airbnb, Uber: Who doesn't love the Sharing Economy?
But when I look past my own satisfaction, I'm starting to ponder if the Sharing Economy is really such a good thing. I did a thought experiment: what if I booked a house via Airbnb instead of staying at the Hilton on my business travels? I'd have a kitchen and could eat healthier. I will not fanatically searching for my water bottle after housekeeper tidied up the room. I won't even need to say hi to the friendly receptionist when I'm dead tired by the end of the day and just want to rest.
I took my thought experiment to the next level: what if everyone ditched the Hilton and went Airbnb? Then I think about the receptionist, the pool guy and the housekeeping lady. What do we share with them by pushing them into the on-demand, gig-by-gig sharing economy?
1. Sharing Economy creates less stable jobs
Corporate jobs may seem rigid and soul-crushing, but we cannot deny that it comes with a stable, predictable salary, opportunities for promotion, and maybe even benefits.
Contrast to that the Sharing Economy. Airbnb has no need for a hotel receptionist. Guests connect directly with the hosts on the Airbnb platform, and our host is usually there to greet us when we arrive.
Sure, the receptionist can, hypothetically, start a new career as a Uber driver. Uber claim that drivers--who are not employees but independent contractors--can make $90,000 a year. The Washington Post did the math and found out that most Uber drivers take home a mere $30,000 a year, just a touch above the federal poverty line. Meanwhile, Uber gets a 20% commission every time we ride.
Uber--and consumers--are emerging as winners in this new game. They raised a whopping $2.8M in their Series E, and is leading the exclusive Unicorn Club that is made up of startups with a valuation in excess of $1Billion.
2. Sharing Economy provides less predictable income
When the pool guy from the Hilton gets off his shift, he may still wonder if he'll earn enough money to put food on the table, but at least he knows just how much more he'll need.
Contrast that to the life of an Instacart shopper. Full disclosure: I love the folks at Instacart, wonderful people. The idea of Instacart is that you order groceries from stores such as Whole Foods through from your mobile phone. An Instacart shopper will go to the store, pick up your tomatoes and yogurt, and deliver everything to your house within 2 hours for $7.99. Instacart shoppers are also independent contractors, and while they could make up to $20/hour with tips, Huffington Post reported that uneven workloads create huge anxiety for Instacard shoppers as they don't know how long they may sit idle without making any money.
3. Sharing Economy disproportionately affect job prospect of the least educated
Some of us may think, everyone should be able to find a better job in our new economy.
While the hotel general manager may be able to transition to a new career, I'm not sure my housekeeping lady, who can barely speak English or afford a fancy phone, could transform herself into a rock-star programmer.
During the Industrial Revolution, technology evolved at a pace where a father could no longer expect his son to be doing the same thing to make a living. The Digital Revolution is accelerating this rate of change, and it is hard to imagine that any of our skill sets will be in high demand for the next 40 years, the average number of years most of us will spend working. I'm not sure if our education system is adequately preparing us for the need for constant reinvention.
Tomorrow, I'll be hanging out in our Airbnb apartment in Bangkok. I'm not asking any of us to stop using Uber, Airbnb or Instacart, because I'd be a hypocrite if I did. If you can just pause for a few second and think about what the sharing economy will mean to the less fortunate members in our society every time you fire up one of these apps, it'd be a great start.
Do you agree that Sharing Economy can be not so great for some?