April 11, 2017/ News
'Sharing economy? What is that?'
It's a buzzword you might have heard bandied around in the media. The phrase may drum up images of a world where money isn't the only viable currency, and goods and services can be bartered. But, what exactly does 'sharing economy' mean, and what impact does it have on Australian markets and consumers?
Investopedia defines the sharing economy as an economic system that enables individuals to borrow or rent the physical or mental assets/resources of someone else. Sharing and collaboration are the main aims of the game, with P2P exchanges often facilitated by technology.
Companies that are part of the sharing economy are often referred to as 'disruptive' businesses. They are considered to be 'disruptive', as they often deviate from traditional structures and displace legacy businesses and/or current market leaders. Disruptive businesses breathe new life into often stagnant markets and are gaining significant traction.
According to research conducted by Deloitte, the sharing economy in Australia has grown by $1 billion. This has been spurred by the increasing popularity of businesses like Uber and AirBnb. Uber, in particular, has made waves in the Australia's taxi industry. Uber provided a radical new way to get around. People could hail a car driven by their fellow man, quickly and for a rate that was often cheaper than taxis. The ease, ubiquity, and cost-effectiveness of Uber's services made it a runaway hit with the public. Uber effectively loosened the stranglehold taxis had on private commercial transport, and provided consumers with both flexible employment opportunities and an alternative mode of transport.
The increasing prevalence of a sharing economy in Australia can be attributed to the following factors:
- It encourages healthy competition by providing consumers with more choice
- It's cost-effective way to access resources that may not have been available otherwise
- Resources/assets are available 'on-demand' (aka when and where you need it)
- Makes use of unused assets
- Provides a flexible employment or an additional stream of income
There is no doubt that the sharing economy is growing quickly and fast becoming the new norm.
However, one of the key issues identified in the Australian Government Productivity Commision's 2016 Research Paper, is that the sharing economy and disruptive businesses often move faster than legislation can be created. This can cause friction between the businesses operating in the sharing economy and their various stakeholders, such as the government, employees, consumers, unions, and so on. Although, governments are increasingly recognising the impact of the sharing economy and the important role that disruptive businesses play in Australian markets, and taking active steps to embrace this movement.
The Sharing Economy is beneficial for various markets and industries in Australia, as it shakes up the competition, reduces the power of monopolies and oligopolies, helps to drive down prices and provides consumers with more choice. In addition to this, the sharing economy also empowers consumers and increases the opportunities available to earn an income.
If your business requires the services of a labour hire agency, or you're a worker looking for flexible employment, contact us at Workfast (1300 824 403) today! We'd love to help you out!