Economics
The gig economy is a term with a range of meanings, involving peer-to-peer based sharing of access to goods and services, and is becoming a growing trend in the contemporary economy. While offering the people a lifestyle choice, the shareconomy does not come without a big potential downside though.
The sharing economy or gig economy, is supported by the higher end startups - companies like TaskRabbit, Zipcar, Ecomodo, Airbnb, Uber, ZenDrive, Pillow, Uber as well as scores of other me-too copycats. The sharing economy is an umbrella term, also known as the access economy, peer economy, shareconomy and collaborative consumption.
The peer economy allows an individual to share their possessions or services like renting equipment and tools, renting dresses, ride sharing or renting rooms or apartments. It allows the independent person or business to connect with freelancers for a short period of time. This system brings a lot more flexibility to ones job but fails to provide the benefits that the traditional full time job offers, like the retirement plan or medicare plan.
The United States presidential candidate, Hilary Clinton in her campaign called the peer economy as a gig economy. In a speech, Clinton said that the shareconomy is creating innovation, but raises questions about the workplace protection and how the future of the job will look like.
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The gig economy
A gig economy is just an environment where the independent workers work under a specific job profile in an organization for a short period of time. Short term jobs are gaining more popularity in this digital world because they require minimal overhead. Often a person with a smartphones is all that is needed for a worker to perform a task anytime, anywhere.So, freelancers have the option of selecting the best projects and temporary jobs around the marketplace and the employers can choose the best person to perform a specific task from a pool of candidates. Digitization, on the other hand, has created a void in the employment sector because there is increasingly smart software available that completes the job in no time and is ultra efficient. The other factor is the financial pressure faced by the businesses dealing with millennials, and their new attitudes regarding work.
In this generation, people keep moving from one job to another in their entire career period, this sharing economy can be viewed as an evolutionary one. The main factor is that it saves businesses a lot of resources, like training, office space and other benefits; and it also helps in dealing with a professional individual who might be viewed as too high profile to maintain as a permanent employee. According to the freelancer’s perspective, this access economy can help in maintaining a balance between professional and personal life, rather than the traditional one, where they are compelled to remain in a particular job.
Sharing economy – Pool of opportunity
There were oDesk and ELance, in the marketplace before the rise of the gig economy where computer designers and programmers could earn their living with a short term job. But in these networks not only created a new channel for freelancers, but also introduced a wide range of unique economic activity to the model. Hence, one could identify that there are many property owners who are able to rent their property for a temporary stay through the rental platforms like HomeAway, onefinestay, Love Home swap and Airbnb and there were many jewelry makers, accessory makers and dress designers benefited through the online marketplace like Etsy and others.The Wealth of Nations
, a book written by the economist, Adam Smith described a market economy in which the individuals engage themselves in commerce with one another. Similarly, the gig economy makes us wonder whether we are moving back to the 18th century economy. 
Over the past two centuries, the evolution of mass production and distribution gave way to the 20th century's salaried employees. The main reason behind the peer to peer exchange is because of the digital and technological revolution. Around ninety percent of the services in the sharing economy are based on the population that is equipped with the GPS enabled computers or smartphones. And the digitization of the social network media like LinkedIn and Facebook helps in gaining the trust among the anonymous peer.
Moving towards the textbook definition of a market economy
Companies like the ZenDrive, TaskRabbit, Airbnb, Uber and Etsy in the access economy are different from the companies like Walmart, Apple or BP, because they are not buying an item made by Etsy, renting an apartment or riding their own vehicle. Their only work is to connect directly the customers with the sellers who have a virtual store, owner of the rental place or the driver of the car. However, these networks are not individual trades, but they are facilitated by a community building and are trained to provide services with hospitality. The businesses under this marketplace offer good quality user experience, customer generated feedback that is similar to that of an organization trying to build and develop their brand.This collaboration consumption seems to be a unique invention, such that the digital powered combination between the economic activities that takes place inside and outside the organization. The main advantage of this network is that, it brings in the expertise on-demand, and offers brand and trust. The necessity of specializing in a particular field before qualifying as a provider is decreased. Now, any artisan can become a retailer through the online marketplace, Etsy and anyone who wishes to rent their property can connect through Airbnb or a person who owns a car can become an independent partner with BlaBlaCar or Uber.
The participants of the gig economy need not work for a full day; instead they can easily manage their personal life with a highly flexible professional career. For instance, a person can look after their personal responsibilities and then pickup their scheduled ride as a driver by registering under any ride sharing company.
You are the boss of your job
When you are the boss of your job, you might be at ease while working and achieve great success and develop the professional life. But there are also some elements empowering in the traditional work, like the benefits offered by the company, standard payments and steady working hours. Because it is quite difficult to plan the future without knowing the amount of money a person is going to make the next year. And starting a new business has a significant amount of risk; however one can become an entrepreneur by trial and error method and has the chances of unleashing the innovations in the marketplace.Economists suggest that the key driver of the inequality in the economy for the past two centuries was the concentration of the wealth producing capital. The ideal sharing economy means that the economy is based on the millions of micro entrepreneurs who have their own business, rather than the small cabal of giant organizations. Even the digitalized generation that has skilled worker network raises the specter of inequality in the economy.
With the help of the mobile apps, the customers can get their groceries from Instacart, get their drinks through Drizly or get a ride in a luxurious car. But the sharing economy does not come without risk. Critics point out that the gig economy has become just another way to deliver more expensively priced conveniences to those with enough money to pay.
Farhad Manjoo also points out that a great number of sharing economy start-ups have failed. "The lesson so far in the on-demand world is that Uber is the exception, not the norm. Uber, but for Uber — and not much else," he writes in the New York Times.
In many countries the main aspect of the social safety net is allied with the traditional full time job with a government or a large company. Though the main aspects of the sharing economy are not distinct, we must consider the overall welfare provisions in a society that is decoupling from the traditional jobs-based economy.
| By Anand Rajendran | Embed |
About the Author - Anand Rajendran is CEO and Co-Founder of Dectar, best PHP scripts development company located in India. Dectar is a part of Casperon Technologies a leading social and mobile development company which is Developing Uber for X apps like Couriero - On Demand Delivery Services App for the past 3 years. Anand's a Tech geek, Digital marketing expert, Entrepreneur, and Atheist who loves to write everything about PHP Scripts and mobile application development.
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