In recent years a number of online services have emerged that promise to reshape the way that Americans shop, eat, earn a living, go on vacation, get from place to place, and share goods, services and money with each other. Commercial juggernauts like the ride-hailing app Uber or the home-sharing platform Airbnb represent some of the most well-known examples of these new services, but they encompass the host of services, apps and online platforms of various sizes that are generally considered to be part of the shared, on-demand and collaborative economy. These new platforms serve a wide range of markets and objectives, but several characteristics help to define the landscape of this corner of the digital economy.
One characteristic of these services is that many maintain little (if any) inventory themselves. Instead, they often function as a platform for connecting excess goods or capacity – an old piece of furniture, space in the passenger seat of someone’s car, a room in someone’s home, a parking space, a designer dress or workers’ time and skills – with people who want to purchase or simply use those items or services for themselves.
These services also tend to rely on flexible forms of employment as a key element of their business model. Just as many of these services tend to maintain little in the way of real-world inventory, most directly employ a relatively small number of workers. Typically the people who actually interact with customers and other end users are so-called 1099 workers (a reference to the tax form that independent contractors receive each year) who are not employed by the service itself. This arrangement allows these workers to offer services on a flexible or part-time basis – but also means that they do not qualify for many of the government-mandated benefits available to traditional employees under law, such as employer-subsidized health insurance or the ability to get reimbursed for business expenses.
Finally, these services are often premised on removing the friction, hassle and inconvenience from users’ everyday lives – for a price. For services that offer physical products, this might mean offering same-day delivery of a variety of household items so that users are saved a trip to the grocery store after a long day at the office. For more task-oriented services, this might mean offering users the ability to instantly summon a driver or personal chef at a moment’s notice from a smartphone app.
As is the case with many of the services themselves, the way these services function is not necessarily new. People have been selling used or handmade items on peer-to-peer commerce platforms like eBay and Craigslist since the early days of the modern web; Amazon introduced its Prime expedited-shipping membership service in 2005; and the dot-com bubble of the late 1990s prominently featured a number of on-demand delivery services, ranging from the famously short-lived Kozmo.com (which promised to deliver a variety of products to customers within one hour with no delivery charge) to the still-operational grocery delivery service Peapod.
But while these new shared and on-demand services are in some respects little different from others that came before them, they have presented a number of challenges to regulatory and policy structures that in many cases predate the internet era by decades. For instance, cities around the country have struggled with how to incorporate ride-hailing apps and home-sharing platforms into existing regulatory structures governing the for-hire vehicle and hotel markets. And the piecemeal, episodic nature of employment in the emerging “gig economy” has placed new challenges on workforce regulations and social safety net programs that were designed for an era when the distinction between workers and contractors was more clear-cut.
These services have also touched off a wide-ranging debate about their impact on the economy and on society as a whole. Many laud these services for the convenience and efficiency they bring into users’ day-to-day lives. But others worry about the vast quantities of cardboard and other waste that are the byproduct of this convenience, or express concern that these services are simply helping the already-fortunate to lead more comfortable lives – with little long-term benefit to the broader population who cannot afford to use these services, or to the workers who ultimately make them possible.
No matter what work you do, you have most likely taken part in the new digital economy. Well, at least 72% of Americans did…
Wanna know more? Pew Research examined Americans’ use of – and attitudes toward – the shared, collaborative and on-demand digital economy. The following chapters offer an in-depth examination of three archetypal examples of the most recent wave of digital innovation.
- Chapter 2 examines the nature and impact of on-demand services in the context of ride-hailing apps.
- Chapter 3 uses the example of home-sharing services to examine issues related to the sharing economy more broadly.
- Chapter 4 uses a series of questions about crowdfunding platforms to examine the scope and impact of collaborative platforms.
- Chapter 5 discusses usage data for a number of other digital economy services.