Thriving in the Gig Economy - Scholarly Research
Since I am working on a new book, Thriving in the Gig Economy, I am reading every scholarly item I can find on new alternative marketplaces. As such, I was thrilled when The Future of Work Podcast (1) recently included an interview with Arun Sundararajan, the author of The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism. I had read Sundararajan's book already so was eager to hear him discuss it.
I appreciated the fact that he recognized that the advent of digital platforms is really an extension of age-old marketplaces. The fact that they now happen to be powered by technology rather than a central urban location was somewhat incidental. Technology was able to become the purveyor of these markets in part due to the increase in trust that the medium affords. Millenials, interestingly enough, have grown up in an era where trust in institutions and society is at its lowest level. (which does not bode well for the upcoming election) . Conversely, though, they are the most likely to trust a digital platform; since they grew up in a digital age, technology can provide a layer for legitimacy and trust to this cohort, more so than it does to Gen Y or boomers.
What did not resonate with me though was the way sometimes, the gig economy was used as a proxy for the sharing economy. With all due respect to Professor Sunderararajan, I do not see it quite the same way. To me, although the sharing economy term is often used interchangeably with the gig economy, it is not the same. The sharing economy refers to the economic activity generated from the sharing of physical assets on a peer-to-peer level. The poster child for the sharing economy is AirBnB, the home sharing service. It enables individuals to rent their property or a portion of it to people in need of a vacation rental. Although the host may need to prepare the house for the guest, that is not the service that is being purchased. The product is the temporary housing. By extension, the preparation of the host is not a gig, but rather his/her role to get the financial benefit from the short-term rental of physical assets.
Other assets can be involved as well. There are several peer-to-peer lending platforms, like Lending Club, where individuals can pool financial assets and make loans to individuals or enterprises in need of funds. Share a Mortgage is a London-based start-up that allows individuals to pool resources for the purchase of real property. E Bay, of course, is also a sharing platform, allowing individuals to sell handicrafts or grandma’s antique dining room set.
There is some intersection with the gig economy when the asset being shared is in part intangible. SofaConcerts in Hamburg, Germany for example, allows people to host musicians in their home. The home is being shared, but the experience, the performance, is also shared. Similarly, EatWith in San Francisco, allows hosts to open their homes to put on a dinner party. The home and meal are shared, but the host has done the work to prepare the meal. The host could be an expert chef, so in that sense expertise is being purchased.
That said, the key distinction between the sharing and gig economy is that the former involves the purchase of a service or experience that involves a physical asset. At the high value end of the gig economy, the transaction can include an intangible asset in terms of the intellectual property that is developed on the gig, but a physical asset isn’t involved.
Despite our difference in perspective on this, I heartily recommend "The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism"; it is a good read.
I welcome your thoughts.