Is This The End of the Sharing Economy Or Just a Call for Restructuring?
Even before the global pandemic, companies that make up the sharing or “gig” economy were forced to consider critical structural changes, ranging from the definition of their employee and contract benefits to security threats due to the informal nature of the business. These existing questions, combined with the new challenges brought by the health crisis have made many question if the sharing economy still has a place in the world and wonder about the possibility of significant change and adaptation.
As identified by Uber, Lyft, and Airbnb, some of the most important things to consider are the strengthened needs for hygiene protocols and the assurance of safety for their clients. As a result of the pandemic, these industry giants saw a substantial decrease in profit during the peak of the COVID-19 crisis and are still grappling with the effects.
Short term rental giant Airbnb was forced to cut 25% of its workforce early this year but has seen a substantial increase in bookings starting in mid-May. The collective panic over the pandemic began decreasing, and people started relying on short term, local getaways to combat high levels of stress. Airbnb has focused on providing hygiene standards for both hosts and guests to combat the spread of COVID-19 while giving people the option to get out of their homes and relax.
Companies like Uber and Lyft made important decisions during the first months of the pandemic and encouraged people to stop using their services, a bold move from any point of view. Uber focused their advertising budget on promoting Uber Eats and supporting the local restaurant industry. The capacity to adapt to significant challenges can make it or break it for companies that offer these services.
As cities around the country reopen and people start entertaining the possibility of using share-riding services again, these companies need to focus on cleanliness and build long-lasting strategies to protect people while also staying making a profit. We will be able to see if the responses prove to be adequate in the long term.
Even though the sharing economy suffered a big hit during the first quarter of 2020, the health challenges and the need for increased accountability have made executives reconsider how they manage their business from the inside out. We will see substantial changes in the way companies advertise and exist in the economy. The sharing economy is here to stay, but significant disruption and adaptation are needed.