The other day I was travelling to Copenhagen. It was a hectic day and as per usual I was running late. Booked an Airbnb, ordered my lunch on Deliveroo to eat on my way and hopped into Uber to the airport. Whilst Ubering, I purchased a few items on Amazon so that I could receive it when I was back home, and replied a few questions on Quora. In total, I used five services of the Sharing Economy in a span of an hour!
In midst of this race, rising startups are offering solutions to supplement your income with pretty astounding earning potentials for the everyday user. Before we tap into that, however, it feels like you and I need some convincing on why you need to embrace it:
1) SALARIES ARE DECLINING
The average gross salary for young adults (18-34y) in developed countries has gone from $36,000 to $33,000 since 1992. This trend is not going away as jobs are being increasingly outsourced to freelancers or to cheaper labour in emerging countries.
In my time leading the Global Internship Programme for AIESEC – the world’s largest youth led organisation – and supporting the UK biggest corporations recruiting bright talent I could spot the clear trend of reducing traditional jobs through three different ways: A) outsourcing projects to India, China and rest of emerging Asia; B) contracting of freelance workers via different platforms i.e Freelance.com; C) employing human capital agencies such as Manpower Group in order to have reduce headcount under payroll systems and consequently be more tax efficient, pay less holidays, maternity/paternity leaves, easiness to fire and so on…
2) 98% OF ALL NEW JOBS CREATED IN THE PAST SEVEN YEARS ARE FREELANCE OR PART-TIME
As James Altucher would say: “Every time someone writes a line of code, a job is lost.” It’s the only path ahead for humans to evolve since our economy is already on a high pedestal. For instance, when digital music started, music stores died. Before Netflix, Blockbuster would be employing hundreds of sales attendants everywhere. The ratio of revenues per employee in the fastest growing companies is also being constantly highlighted: Instagram was purchased by Facebook for $1 Billion with only 17 employees in 2012 whilst Sports Direct International (warehouse for sports products) had over 18,000 employees with almost the same market valuation!
Robin Chase, founder of Zipcar, said “When self-driving cars are everywhere, 90% of the auto industry will disappear.” With 90% of the auto industry gone, the car insurance industry will disappear. Then the car repair industry will be turned upside down.
Humans will need to learn new skills pretty fast and reinvent themselves into new jobs as it happened before on all industrial revolutions.
3) THE FOUR HORSEMEN: AMAZON, APPLE, FACEBOOK & GOOGLE
Their respective investments on artificial intelligence, virtual reality, self driving cars and seamlessly user experience is something never seen before!
Amazon is trialling a new store in Silicon Valley now (Amazon Go): when you walk in, your phone beeps. When you pick up your stuff and put it in your basket, your phone scans it. When you walk out of the store, your phone logs into your account in Amazon and effectively pays for your basket.
Where will the cashiers go?
4) ARTIFICIAL INTELLIGENCE
Why trust a human doctor when your toilet will be able to run genetic tests, blood tests, brain tests, tests that haven’t been invented yet and use AI to diagnose me, then prescribe you medication to prevent greater risk? Then check up on you every time you sit on your chair that has all the circuitry to analyse every electric signal in your body.
But can AI do that? 10 years ago, AI couldn’t recognize your face. Now if you turn your face upside, put it in a blurry picture of a full stadium, and Facebook will still ask you: “Do you want to tag (your name) in this picture?”
JP Morgan has just outsourced hundreds of legal decisions to AI. Why talk to a lawyer when AI has 10,000s of legal precedents it can go through in a micro-second.? “Goodbye” 90% of lawyers, doctors, pharmacists, programmers.
5) BEAUTY WITHOUT A SOUL
But what about the arts?
A professor of music, David Cope, from UC Santa Cruz wrote software in 1994 that even then would make classical music compositions.
The tech has been evolving since then and just a few years ago he couldn’t get a record label to produce his music. So he did a test: would classical experts tell the difference between the software’s compositions and Mozart?
With the experts having to guess which compositions were his software vs which ones were originally from Mozart, not only they couldn’t tell the difference, they got it the other way around: they thought his software’s compositions were actually Mozart and that Mozart was his software. Is that beauty without a soul?
6) EXPLORING MARKET INEFFICIENCY
The business model of every business in the Sharing Economy:
A) Some people have an excess of an item (empty rooms, empty car seats, car parked for the entire day without use, others).
B) Some people want access to that resource.
If you brainstorm where there is excess in your life, you can profit in this model.
7) THE WINNER TAKES ALL
If you create £1 in value, and you have a boss, who has a boss, who has a board, who has shareholders, then how much of that dollar do you get to keep?
In the 1960s, a global CEO might make five times the average employee. Now a global CEO makes 200 times the average employee. The answer: you get none of the dollar and the CEO, Board members and Shareholders get all of it through stocks.
And what is that £1? It’s money you created for the company. But every day less of it is yours.
And guess what: in an economic downturn who do you think will get fired first? The CEO or you? We know the answer. Executives took billions of dollars in bonuses when the banks got $600 billion+ in bailout money from the governments across the world in 2009. And everyone else got fired.
8) THE FEAR OF STEPPING ONTO THE ARENA
I get it. It’s scary to get out of your comfort zone. I procrastinated so much before taking the courage of creating my own blog. People have mortgages, kids, elders who depend on them. It’s easy to be afraid of slipping back in lifestyle.
But what most people don’t realise is: you don’t need to quit your job to be part of the Sharing economy, you can do it as a hobby or side gig to supplement your income.
9) JOBS WON’T CREATE SELF ACTUALISATION
But this will. Every day improve:
- Relationships – Harvard study concluded that relationships is what makes us happy and live longer.
- Competence – Be so good they can’t ignore you.
- Experiences – Invest in experiences rather than things, you get to keep the great memories.
Skills and ideas are the new currency. Not certificates and titles.
10) THE FUTURE IS KNOCKING. WILL YOU ANSWER?
What happens when people have access to things they never had access before?
Supply goes up. Demand remains basically the same. Price eventually goes down. Which means deflation for the first time in 100 years. Warren Buffett once said that deflation is the worst thing that can happen to the economy.
If prices fall, people wait until they get even lower, so demand goes down, so revenues fall more. So fewer jobs are needed, so fewer people have money, and then demand goes down even more while supply gets higher than ever. Prices go even lower = Depression.
Hence why Elon Musk, Jeff Bezos and Mark Zuckerberg are all conveying the same message: we will need “Universal Basic Income” for everyone to handle the economic collapse that will result.
Maybe. Who knows? Nobody knows. But in the meantime, you can protect yourself and stimulate your brain through the following 15 ways to supplement your income.
Airbnb is an online marketplace and hospitality service, enabling people to lease or rent short-term lodging including vacation rentals, apartment rentals, homestays or hostels.
If you are a travel lover, you probably leave your home empty during that period in which could rent it out through Airbnb. Scared of leaving your house with strangers? I was skeptical too, but as long as you only accept travellers with verified ID and great reviews, I haven’t seen terrible cases out there. And on top of that, Airbnb offers you an insurance policy of up to £1,000,000 to any cover damages.
Let’s suppose you own a flat in Central London and you usually travel 4x a year for 2x weeks each time, so you are 8 weeks out (56 days). Your Airbnb daily fee should be around £120 for a 2 bedroom flat in Central London bringing you (£120*56 = £6,720 a year before taxes) and your tasks are simply to advertise your property and change the bed sheets.
II) Uber and Lyft
Uber and Lyft (competitors) are apps that allow you to book a driver to take you somewhere. For instance, you need a ride to a meeting or to get back after the pub, but don’t want to use a traditional taxi because it is almost twice more expensive.
An acquaintance of mine joined Uber Driver as he wanted flexible work after his normal day job. He said: “I do anything from three hours a week up to 65 hours, which brought in £1,150 after Uber’s fare”. Petrol costs also need to be taken into consideration.
Don’t have a car? That’s fine too: Meet Drover – you can rent a car specifically to drive Uber.
￼III) Task Rabbit (US only) and its competitors
Task Rabbit allow you to ask for help for same-day services such as cleaning, handiwork, assistance, moving houses and a wide array of other mundane tasks.
GetNinja (Brazil only): Platform that hires local services such as home renovation, cleaning, private lessons, and more.
Travelling from one city to another but there are still empty seats in your car? Blablacar enables you to sell these seats to people who want to join you through the same journey. You charge a certain fare, sharing the petrol and toll costs and at the same time you get to meet new travellers along your way.
Some months ago, I had these cards from “Magic the Gathering” scattered at my home back in Brazil just occupying space doing nothing, so I decided: I will try to sell these. I advertised on “Mercado Livre” (Ebay’s version in Latin America) and to my pleasant surprise, the process was fast and simple. It took time for it to sell, but it has generated over £600 in revenue for this stuff I spent max £150 about 12 years ago.
Then thrilled by this new revenue stream, I went onto Facebook Marketplace and started selling all the random stuff I never get to use: sold a used Monopoly in 10 minutes for £7, fresh notebooks I bought and never used for £5 each – it’s addictive to make money on things that you know you will never use it again! As the saying goes: “One man’s trash is another man’s treasure”.
VI) Deliveroo, JustEat, UberEats, AmazonFresh
The competition is fierce in the food delivery business, hence these companies are hunting for new car, motorcycle and bike drivers to deliver food in their free time. Drivers are usually paid somewhere around £7 per hour.
Etsy is the marketplace for creative people. Are you an artist or can you make creative jewellery? Set up your online shop and start selling it.
VIII) Getaround (US only)
If you have a 9 to 5 job, your day probably goes like this: Wake up, Drive to work, park your car there for entire day, drive back home. What if you could rent your car whilst is parked there for the whole day?
Getaround: Rent cars by the hour from people around you – they are US-based only for now but have rapid expansion plans and should be in major cities across the globe soon.
IX) Dog Buddy
Love dogs? Then how about dog sitting, walking or daily dog caring when the owner is busy or away? Dog Buddy let’s you do that and pays you from £10/hour to £40/day care to do that!
X) Blogging, Vlogging, Podcast & Youtube Channel
Have a niche talent and want to share with the world? Well there are multiple ways of doing that, varying from blogging (writing about it), vlogging (talking about a certain subject on video), running a podcast or YouTube channel to share thoughts, lessons or things that attract you.
This is though a long-term game. Most of these platforms’ revenue rely on advertising and sponsorship and you can only achieve any of both by having a lot of viewers and engagement with your channel, thus you need to play for the long haul.
XI) Online courses (i.e Coursera or Udemy)
Education in universities only is a thing of the past. Now people will pay you to learn your lessons if you are an expert in a certain skill. Coursera or Udemy, two of the main companies operating in this field, are game-changing platforms to upskill your profile across many fields from algorithms, coding, machine learning to negotiation, sales, digital marketing and meta-learning.
Courses are being priced from £30-£500 and consist of real-time video classes, homework, project assignments and class debates – it resembles a MBA module, but online and much more affordable.
XII) Freelance or Upwork
Affiliate yourself to Freelance.com or Upwork and have access to paid projects and tasks varying from website creation and design, to data administration, sales and marketing, personal assistance, translation & languages, business services and others.
Whatever your background, these sites are likely to have projects for you.
XIII) Create your website and then your own store on Shopify, Amazon & Ebay
Amy Morin sold various websites for circa £15,000 each in which in conjunction with her husband, they would create, sell a wide range of specific jewellery and then fulfill their pre-orders by purchasing in bulk from a warehouse at a cheaper price.
Effectively, they didn’t even create the jewellery themselves, but rather acted like a “middleman” between online buyers and jewellery manufactures. How? Google Analytics advise you how to apply keywords, Facebook ads amplify your reach, Instagram photos brings you new users and so forth. Obviously, it was a tough market due its low barriers to entry, so as soon as, for example, the market of golden bracelets became crowded and competitive, they’d pivot to another type of jewellery (i.e bronze collar necklaces).
XIV) Amazon Fulfillment Services
You know when you go to Walmart, Sam’s Club or any depot that sell stuff in bulk? That’s sometimes significantly cheaper than the price tag of the same product listed on Amazon. You can buy low pricing goods and resell them to Amazon buyers using Amazon Fulfillment services.
Amazon will do everything for you: list your product, brand, store and ship it. The general advice is to select small products with high mark ups so that you don’t pay much on delivery fees based on weight and you can afford the Amazon’s services fee.
Eventbrite allows event organizers to plan, promote, and sell tickets to events and publish them across Facebook, Instagram and other social-networking tools directly from the site’s interface.
Want to create a Yoga party? Eventbrite is the best place for you to sell tickets with its easy payment functionality and seamless integration with other marketplaces.
BONUS: The Magic of Referrals
£15 when you refer someone to travel via Airbnb, £74 when you refer someone to be an Airbnb host; £900 when you refer someone to Hired platform which places tech talent within their companies partners, £5 when refer Uber to a friend and the list goes on and on. Referrals are also a side gig in the sharingeconomy! Making new friends are finally paying off!
WHAT DO THEY ALL HAVE IN COMMON?
All these companies rely on user ratings from previous experiences, they explore supply and demand of market inefficiencies and utilise peer-to-peer mechanics. Welcome to the Sharing Economy.
Disclaimer: it’s important to reiterate that you should check your legal system to identify whether you need to declare taxable income when generating capital gax from these services. This is currently varying from country to country and you should do your own thorough research to avoid illegal procedures.