With the advancement in technology, world economies continuously evolve. This gives rise to new careers, innovative activities and new income-generating activities. While it was the norm for people to work only from the offices, the current situation favors people working from home, having flexible jobs and the availability of worldwide online service providers, such as Uber. These have led to the sharing economy and gig economy. Although the two are similar in many ways, they have differences as discussed in this article.
What is a Sharing Economy?
This is an economy based on the sharing, acquiring and providing goods and services through the facilitation of an online platform. This allows people to share unused assets while at the same time monetizing it. The internet age has especially made it easy for asset owners and seekers to connect and facilitate the trade. For instance, Airbnb has facilitated the utilization of idle apartments. This means that clients can get accommodation at a lower rate than in resorts, and the homeowners can get an extra income with the idle assets. Among other players in the sharing economy include:
- Co-working spaces- With many locations worldwide, these provide working spaces for freelancers and work from home employees. The rates differ with the amount of time spent in the working spaces.
- Money lending platforms- These are companies that provide moneylending services at a cheaper rate than those offered by the traditional money lending institutions.
- Freelance platforms- Online sites such as Upwork connect clients with service providers throughout the world.
Among the challenges faced in a sharing economy include;
- Regulation Uncertainty- The sharing economy is regulated by federal authorities. Unregistered businesses providing these services may have an advantage which simply ruins the market.
- Protection of consumer data- Concerns have been raised due to the lack of protection of consumer data and share it with third parties.
- Safety- There have been numerous cases of safety concerns on platforms such as Airbnb and Uber.
What is a Gig Economy?
This is an economy characterized by flexible and temporary jobs. In this instance, companies prefer hiring freelancers and independent contractors which often involves the use of an online platform. The result of a gig economy is an increase in the efficiency of services, more affordable services not to mention the flexibility that comes from a flexible working plan as well as convenience. For instance, before the internet age, getting a taxi was quite a task, not to mention they were not readily available. With platforms such as Uber, the convenience is unmatched. Businesses benefit from cutting costs that would otherwise pay full-time employees or pay for offices while employees enjoy a flexible working experience.
Despite the benefits of the gig economy, there are some disadvantages. Gig employees may not receive certain benefits such as insurance and paid leave days. A routine may be hard to achieve with this work environment as there is no supervision. These results in issues such as disruption of sleep patterns and a daily routine which are may affect mental health. The development of careers is also compromised because contracts may not always be in line with one’s career line. Employers may not always reach the workers when needed, a factor that can affect business operations, not to mention the erosion of relationships between employees and employers.
Similarities between Sharing Economy and Gig Economy
- Both utilize available resources to facilitate economic activities
- Both bridge the gap between the service provider and consumers
Differences between Sharing Economy and Gig Economy
Definition
A sharing economy refers to an economy based on the sharing, acquiring and providing goods and services through the facilitation of an online platform. On the other hand, a gig economy refers to is an economy characterized by flexible and temporary jobs involving freelancers and independent contractors.
Approach
While the sharing economy bridges the gap between unutilized asset owners and consumers, a gig economy bridges the gap between employers and freelancers.
Advantages
Advantages of a sharing economy include the utilization of idle assets for asset owners’ hence extra income and the availability of these assets to the consumers at a lower rate, while also offering convenience. On the other hand, the advantages of a gig economy include an increase in affordable and efficient services not to mention the flexibility that comes from a flexible working plan as well as convenience. Businesses also benefit from cutting costs that would otherwise pay full-time employees or pay for offices while employees enjoy a flexible working experience.
Disadvantages
Disadvantages of a sharing economy include regulation uncertainty whereby unregistered businesses providing these services may have an advantage which simply ruins the market, lack of protection of consumer data and numerous cases of safety concerns on some platforms. On the other hand, disadvantages of a gig economy include the lack of employment benefits such as insurance and paid leave days, lack of a routine for employees which may affect mental health and slow development of careers. Employers may not always reach the workers when needed, a factor that can affect business operations, not to mention the erosion of relationships between employees and employers.
Sharing Economy vs. Gig Economy: Comparison Table
Summary of Sharing Economy vs. Gig Economy
Sharing economy refers to an economy based on the sharing, acquiring and providing goods and services through the facilitation of an online platform with an aim of bridging the gap between unutilized asset owners and consumers. On the other hand, gig economy refers to an economy characterized by flexible and temporary jobs involving freelancers and independent contractors with an aim of bridging the gap between employers and freelancers.