Inflation helps, for now, the platform economy

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Repartidor de Uber Eats en Utrecht (Países Bajos), en agosto pasado.

The need for extra income increases the labor supply of Uber or Airbnb hosts

Some members of the platform economy are seeing a resurgence of the extra income sector as inflation takes its toll. People are increasingly interested in driving for Uber Technologies and listing their homes on Airbnb to earn extra money. It’s a nice change for portals that rely on sharing workers or spaces. And, at least for now, the demand for these services remains.

Uber CEO Dara Khosrowshahi said two weeks ago that more than 70% of the VTC company’s drivers say inflation played a role in their decision to sign up for work. Rival Lyft has more active drivers than it has since the start of the pandemic.

The vacation rental company Airbnb, for its part, also reported a “strong growth” in the number of new hosts when presenting its quarterly results. Company CEO Brian Chesky said people are especially interested in earning extra income through accommodation, reminiscent of the rise of second jobs during the Great Recession of 2008.

It’s part of a more general rise in self-employment: A McKinsey survey estimates that 36% of employed respondents, or 58 million Americans, identify as freelancers, up from 27% in 2016. And people need ways to supplement your income. US consumer prices rose 7.7% in the year to October, and prices are rising more recently than they have in four decades.

Having more labor supply, in theory, gives companies an advantage. US President Joe Biden last month proposed a new rule on workers gig that could profoundly change the way companies classify their workers. But for now, competition among shared service providers could come in handy. The drivers or hosts ultimately take a part of the reservations that arrive on the platforms. The more companies those people can choose from, the less cut they will be willing to take to get the job.

Inflation has another side: decreased demand. But the platform economy seems to be holding up well, even if the economy is not. Uber notes that “there is absolutely no sign of slowing down.” Airbnb had the largest and most profitable quarter in its history. DoorDash food delivery orders rose 27% year-on-year to $439 million in the third quarter.

All of these companies have warned of signs of consumer weakness, or are watching for them. For the time being, however, the increased need for extra income could work in his favor.

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Brian Adam
Professional Blogger, V logger, traveler and explorer of new horizons.