Should Airbnb consider buying Uber or Lyft
The impact on the gig economy
Given the impact of the COVID-19 pandemic on the world, its symptoms are affecting not only the health but also the financial viability of billions. Only this week, the International Monetary Fund cut its forecasts for global growth, signaling a slump that has not been seen since the global economic crisis in the 1930s. In the worst case, the IMF is forecasting a decline of 11%.
With various periods of immersion and recovery from COVID around the world - more than 100 countries were partially or completely locked by the end of March - job losses, underemployment and extreme business disruption threaten the livelihoods of millions. But constraints can spawn creativity, especially in the form of a growing wave of workers: the Gig economy.
What are gig workers?
Gig staff are paid for by assignment, sale or project. You could take on a part-time job, but most importantly, you are not directly classified as an employee. Mintel estimates that 16% of workers in the US will spend part of their time in the 2019 Gig economy have spent. And while gig workers emerge from a number of factors - high internet penetration that enables digital working, pursuit of passion projects, and a desire to work for themselves - studies suggest they are run primarily for financial reasons. And as the tumultuous labor markets continue to shake, workers will have to look for additional income outside of fixed roles.
COVID-19 may already have permanently postponed some of the country's top side gigs. Below, Devon Vipond, Director Research & Insight, examines some of the most lucrative companies and platforms supporting the gig economy, and their current and anticipated changes.
Ridesharing Drivers: Uber, Lyft & More
As of June 2019, around 3.9 million people were driving Uber. During the lockdown, drivers will have to pay fewer fares, while consumers will be asked to limit unnecessary journeys. Television advertising effectively discourages the use of services. Uber itself has cut pool services to reduce exposure while only encouraging essential travel. The drivers are facing difficult times. However, the company starts supplying detergents and masks.
The company then has 14 days of paid sick leave for from COVID affected drivers and offered to the general public and made 10 million trips and food deliveries free to healthcare workers, the elderly and the needy.
While drivers may have made less income from driving passengers, Uber Eats delivery is a means of diversifying income. Uber Eats has waived delivery fees and now offers contactless delivery options. This could cause drivers to shift to that delivery - not just for Uber Eats, but the wide range of retailers now offering delivery services - but that space, too, is fleeting.
According to SimilarWeb France, Spain and the UK saw average daily Uber Eats and Just Eats users drop by 2-23% in March alone. Meanwhile, UK-based grocer Tesco added 145,000 more home delivery locations, according to preliminary results from the company as of April 8.
In Canada, where restaurant industry stakeholders have gathered to hold #TakeoutDay on Wednesdays, volunteers are signing up to deliver groceries to avoid high app fees. The cake can shrink for gig workers to deliver.
Vacation home manager: Airbnb
Homeowners who rent out part or all of their homes are serious business. As of September 2019, the company said it had more than 7 million listings in over 100,000 cities around the world, with hosts more than $ 80 billion earned. The company continues to face criticism for limiting viable housing options - especially in city centers - to tourists. If housing options are limited, this can play a role in increasing rents.
Now, at the height of the COVID crisis, Airbnb is allowing guests to cancel bookings for free and pass on lost revenue to owners. In addition, owners are encouraged to make their offers available to first aiders free of charge. In terms of search data, interest has dropped dramatically, alongside the decline in travel.
Toronto, one of the most expensive cities in the world, is home to some of the most notorious Airbnb hubs downtown become ghost hotels. They're empty, and some hosts are reconfiguring short-term rentals into longer-term listings to pique interest. Others may be considering selling.
While financial institutions are now accepting deferred mortgage payments, we can see Airbnb hosts weather the storm, but for those moving to longer-term rental models, hotter markets like Toronto could spell a correction in the rental markets.
Online reseller: eBay
When physical stores close, people shop differently. Data suggests that global consumers are already delaying purchases and struggling to purchase staple foods. In the meantime, consumers may be tempted to clear out storerooms and cabinets for extra cash.
Online resellers can be affected by limited inventory or low cash flow. For those who are, some people may turn to collections in their homes and trade things like Magic: The Gathering cards, sneakers, and other collectibles.
Toronto-based sneaker reseller Netmagnetism shared its point of view on its blog: “Cash flow has always been the biggest factor in running a business and is even bigger today in times like these when everyone wants to hold cash, not sneakers Factor. With all of your money tied up in dead weight, you can't take advantage of price cuts without selling your own inventory. "
Consumers buy differently in weaker economies. According to Subreddit / Flippers, there was a boom in nostalgic products like puzzles in the last recession. During the lockdown, interest not only increases in online entertainment but also in offline items such as brushes and yoga mats to aid new hobbies.
Platforms like eBay adjust their policies to protect their sellers during the crisis, allow reseller payment deferrals, and pause adjustments to seller rankings. They also oppose profiteers who increase the cost of things like hand sanitizer, face masks, and toilet paper.
Looking to the future, sellers can use social feeds to generate interest and potentially avoid fees for platforms like eBay and Etsy altogether. Shopify extensions on Instagram allow users to click items and view prices and connect to their store fronts. TikTok now offers buttons to redirect to microsites. However, for some users like @funkyythrifts who bid without any seller platform, resellers may move away from the traditional model.
We may see that those who may have worked with their online stores full time are taking a more balanced approach to their careers. For example, they will keep this side appearance on the side and give up plans to become a full-time reseller.
The future of the gig economy
Each industry was hit differently by the crisis, but there are some notable future implications for gigger that emerged from the first few weeks of the lockdown.
1. Increasing the attractiveness for the self-employed
The Great Lockdown, which is shrinking the economy worse than anyone has seen in their life, will continue job losses. The sectors hardest hit are retail, housing and recreation, food, transportation and storage, according to Statistic Canada.
With workers being forced to be at home and isolated, self-employment can be the only way to earn an income.
How can brands help?
Fear and tension are high and people need financial and emotional support in equal measure. Consider Molson's Virtual Happy Hour initiative. When people get together for a virtual happy hour, they can get a $ 25 gift certificate to support a local restaurant. This supports the social needs of the people AND the local businesses. Think about how your brand can do something similar on a more personal level.
2. An urge for self-employment rights
COVID-19 has revealed how vulnerable gig workers are. They are becoming a new classification of employees who were previously not eligible for corporate benefits or government support. It can be expected that the industry will work harder to protect them. For example, the realignment of benefits and insurance systems.
While side hustlers must continue to be creative to supplement the streams of income, many are now looking for government aid programs.
How can brands help?
Shopify calls on merchants to help them with their own feeds. FreshBooks and Mars Discovery District have compiled resource lists for freelancers and small businesses and startups. Through these educational and promotional activities, they find ways to reduce uncertainty for vulnerable workers.
Brands can consider how their business can build self-employed people and communities with their own resources, skills or services. Think about the limitations employees now have: limited access to office supplies, machinery and shipping, reduced income for advice, limited exposure - and find your value proposition.
3. Qualification for independence
When people stay inside, they are more active on social media. Facebook reported a 50% increase in messaging app usage, Zoom was a top download for video conferencing apps, and Houseparty video chat app became a hit almost overnight. There were 2 million downloads in one week, compared to 130,000 in the previous month.
When people gather on social networks, companies offer free tutorials - dance classes, yoga sessions, makeup tutorials - to assist the audience. Canadian chefs and foodies have come together to create an open source cookbook. Kevin Wu, a Toronto-based education advisor, is offering 100,000 hours of free tutoring sessions to help parents and school-age children with the lockdown. People get a free lesson before the fees start.
With this new relationship, communities are formed with local brands and personalities. A new form of influencer may emerge - one based on closeness, interest, and a shared isolation experience.
It can also happen that talent blurs the lines between their daily jobs and their own sideline jobs, leading to more competition for traditional vertical stakeholders. For example, the long jump world champion Malaika Mihambo ran an after-school club for young children in Germany. Now she's offering YouTube workouts. The English cricketer Jos Buttler demonstrated Pilates exercises with LB Pilates on Instagram. When the audience demands fitness content from the athletes themselves, gyms and studios can push that aside.
In many cases, what used to be a premium is now practically free. This begs the question: will we see more freemium service models from small businesses and the self-employed? This could accelerate the direct consumer business model enabled by Patreon - with people paying a fee and unlocking exclusive access to content and perks.
How can brands help?
Newcomers to the world of the self-employed - especially qualified employees - have to balance the need for support and profit more than ever. Think about how your brand can support through marketing, platform access, or financial literacy.
Also read:Do The Right Thing: The Role of Social In Covid-19
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