• Chelsea Rustrum

Sharing Economy… “Employees or Micro Entrepreneurs?”

Updated: Feb 21

With so many efficiencies generated by technology, the sharing economy is going through an interesting transition. People are recognizing that they have the ability to own their own destiny, easily by working less and focusing on more of what they love — perhaps driving for Sidecar or Lyft as needed and whilst working on art projects. Others are renting out their spare bedroom on Airbnb to pay the mortgage. And still others are creating underground hotels by renting out multiple apartments, allowing them to quit their day jobs.

Personal Incentives / Drivers

Where does the sharing economy stop being collaborative and start being business as usual? When a person replaces full time work or their typical salary with sharing economy income, the incentives change. Instead of looking at the revenue as extra vacation/fun money or a way to pay off debt, the monthly income suddenly becomes necessary for survival. And instead of being a social, environmental, or cost savings endeavor, the incentive becomes generating as much money as possible in the shortest time period, which leads to treating each situation more transactionally.

We’re all becoming our own entities. First we all became brands and reporters (blogging/commenting/liking/and otherwise reputation building our way to digital profiles). Today, thanks to the sharing economy, each person has the capacity to build a profile around the micro-entrepreneurship of providing peer-to-peer services.

Investment Incentives

With so much capital going into these sharing economy startups, they are will ultimately succumb to the “profit at any cost” methodology of increasing margins and achieving exponential growth, with cost cutting measures along the way. Instead of providing as much value as they possibly can and staying nimble, these startups will be forced by the market and their very structure to grow as fast as possible. This means they will have to expand their team and user base at rates that don’t support the individuals who are actually responsible for their success (the peers).

In many cases, the individuals who work in the sharing economy will become victim to their whims and investment cycles. And what happens when these companies buy the market outright (hello Uber) and become monopolies — do the “entrepreneurs” of the sharing economy have any rights?

When people are the power of your business — people with cars, people who drive, people with houses, people who host, people with knowledge, people who teach — they are in fact co-creating the economy that the marketplace provider will ultimately siphon long-term profit.

Are the individuals working in the sharing economy really that empowered? Or can they be more empowered? What would help sharing economy employees transition to becoming true entrepreneurs?

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