Everyone has needs, but what if you could get by without buying all of the things you need from traditional businesses? You get your furniture for free second-hand from Craigslist, borrow power tools to hang curtains from a neighbor, order business cards designed on Fiverr, get a house cleaner from TaskRabbit, use a bike share to get around, and a car share when you’re out for a night on the town. When you travel you stay in cool, lofts via AirBnB and when you want to learn new coding skills you take a course from MIT via EdX, then turn around and offer your web development services on Upwork.
Minimalism isn’t just for hipsters, and this new collaborative economy isn’t just for people obsessed with sustainability and small environmental footprints. More and more people are participating in this new way of spending and saving money by sharing resources.
As the economy shifts towards freelancing and contracted work, the terms gig economy, on-demand economy, collaborative economy, sharing economy, and crowdsourcing are often thrown around interchangeably. While these terms do share similarities and come from a similar core idea, they do in fact have different meanings. Here’s a breakdown of what each one means.
The gig economy is defined by customer service that provides instant gratification. Independent contractors find gigs via online marketplaces such as Amazon Mechanical Turk, and complete small jobs for multiple different companies and clients. An income is built by completing several of these gigs. Gig economy sites include Fiverr and Task Rabbit.
Immediacy is now the essence of life. People want what they want…now. So the on-demand economy caters to the “now” generation by providing goods and services that can be ordered and delivered right away. The transportation company, Uber, and the restaurant food delivery service, Munchery are examples of this. Customers can order services or goods via web platforms, but more often than not these orders are made via mobile apps, which make them even more convenient and easy for customers.
The collaborative economy is perhaps the trickiest term to explain, since it is commonly called the share economy. The difference between these two terms is that the collaborative economy is more of an all-encompassing, broader term that involves peer-to-peer transactions for services or products. Essentially, collaborative economy and share economy mean the same thing, but the collaborative economy openly acknowledges the more capitalistic nature of the share economy, and does not imply idealism the way the term share economy does.
Perhaps think of it like a democracy instead of a dictatorship or a community college anyone can attend instead of a private university where one must apply and be accepted to take classes.
The collaborative economy is about creating an open and decentralized platform that connects you to other people who want access to what you have, and vice versa. Large companies and institutions that may have once required admission or employment to connect with are connected to regular people via the collaborative economy. They help each other by fostering participation. The collaborative economy is all about community. The education platform, Coursera, and the invention platform Quirky that connects inventors to Fortune 500 companies like GE fall under this term.
Perhaps you’ve moved from suburbia where you drove your car everyday to an urban center where due to public transportation options and faster commutes by bike, your car is now collecting dust and parking tickets on the street. Thanks to the sharing economy you have a new option: sell your car and sign up for a service like BlaBlaCar that lets you pay for rides or offer rides in your car to other people when you do drive it, and make extra money.
In the sharing economy model, people rent or borrow items that are owned by another person. It could be something as big as a car or as small as a designer evening gown for a wedding from Rent the Runway. Generally speaking, the sharing economy is especially for items that are either very expensive, useful, but not used often, or both. In addition to car sharing, home sharing site AirBnB falls under this category.
Even though the term sharing economy is better known and more widely used than the term “collaborative economy,” it is currently falling out of favor and being phased out since it misrepresents the word “sharing.” Many people who participate in the share economy aren’t necessarily sharing– which implies without payment– but are in effect earning additional income from the products they are “sharing.” However, there are still some platforms such as Couchsurfing and PumpiPumpe (a tools and item sharing platform for neighbors) that have the original idealistic nature of the share economy and are about building a community and being good to the environment by consuming less and owning fewer things.
Within each of these new economies, the crowd has often proven useful. Crowdsourcing is a way to get information or help with a certain problem or project by soliciting ideas or services from a large group of people via online platforms and communities such as Mila, who can help a person solve whatever needs to be done. This help can either be advice given online that gets upvoted, or it can mean choosing between rated contractors who can come out to a person’s home and complete the work.
Crowdsourcing is closely related to the term gig economy in that when people seek crowd service, independent contractors have a certain amount of time to react and accept the gig request. Crowdsourcing is also related to the on-demand economy since the “earlybird gets the worm,” and providing the service immediately is ideal or required.