The on-demand or peer-to-peer economy is shifting consumption patterns, creating new “jobs” and innovative business models, the World Economic Forum has said in a press release. The impact on industries, workers and consumers is huge in this new reality, according to panellists in a session at the Annual Meeting of the New Champions 2015 in Dalian, China.
This relatively new sector of the economy is burgeoning, launched from online platforms and engaging millions of consumers worldwide. Arun Sundararajan, Professor and Rosen Faculty Fellow, New York University, USA, calls this shift the “sharing economy” or the evolution to a capitalism that is fundamentally crowd-based. “We are transitioning from getting the goods and services we want from a company to getting them from peer-to-peer platforms,” he said. “This is culminating in a new model for organizing economic activity.” In this new world, work no longer involves “jobs”. According to Sundararajan, people are assembling gigs and tasks.
Stephane Kasriel, CEO, Upwork, USA, started his online marketplace for freelance work 10 years ago. In the past three years, the company has taken off and offers100,000 new jobs in 75 categories; 30,000 freelancers sign up each week. “Young millennials do not want 9-to-5, they like to control their own destiny,” he said. “We offer liquidity in a fast-moving job market.” According to Kasriel, the on-demand economy will lead to “profound changes in society.”
This rapidly evolving business model is also changing the nature of competition. “The value chain doesn’t need to be pure competition. A lot of value can be created by taking the best of two worlds and creating something better out of it,” he said.
The on-demand economy enables agile businesses to build bridges. According to Nathan Blecharczyk, Co-Founder and Chief Technology Officer, Airbnb, USA, a Co-Chair of the Annual Meeting of the New Champions 2015, “Companies can partner with industry, broader society, cities and communities. This will create a more inclusive economy.” Businesses such as Airbnb and other online platforms act as a powerful economic enabler. “All of our businesses give people an option to have a supplemental income,” Blecharczyk told participants. “There are not enough jobs in the world. Our services add incremental value.”
Didi Mobility, a major player in the car-hailing industry, transports 10 million consumers every day. Using Didi’s apps, people can hail taxis, call on private cars and pooling services, and determine the schedule of public buses. Cheng Wei, Founder, Chairman of the Board and Chief Executive Officer, Didi Mobility, China, a Co-Chair of the Annual Meeting of the New Champions 2015, said that this consumer-to-consumer service faces fierce competition but, in the on-demand economy, “scale is the key” and a unified platform offers users convenience.
Panellists agreed that the on-demand economy is raising trust in society – an important spin-off in the wake of the financial crisis, which lowered confidence in the private sector and private institutions. (SH)