Access Economy

The access economy is a business model where goods and services are traded on the basis of access rather than ownership: it refers to renting things temporarily rather than selling them permanently. The term arose as a correction to the term sharing economy because major players in the sharing economy, such as Airbnb, Zipcar, and Uber, are commercial enterprises whose businesses do not involve any sharing.

This model uses a technology platform, often accessed via mobile phone, to connect suppliers willing to rent assets (e.g., apartments for rent or cars for transportation services) with consumers. This may reduce the need for intermediaries (e.g., organized businesses such as taxi companies) between the supplier and consumer. Such platforms may also be used to connect employers and laborers for short-term employment opportunities, bypassing traditional employment services firms and employer-employee relationships. This is a movement was worth around $26 billion a year in 2015.

The number of persons involved in the access economy is not easily measured. The “access economy” or “on-demand economy” poses regulatory and political challenges, such as: defining the nature of the employment relationship; designing regulations to safeguard parties to these transactions; the loss of taxes and corporate access that results from moving away from small locally owned companies to large remote technology companies; and the bypassing of local regulations (such as the requirement for taxi drivers to provide wheelchair vans, or provide drivers 24/7)

Economics Effects

The impacts of the access economy in terms of costs, wages and employment are not easily measured and appear to be growing. Various estimates indicate that 30-40% of the U.S. workforce is self-employed, part-time, temporary or freelancers. However, the exact percentage of those performing short-term tasks or projects found via technology platforms was not effectively measured as of 2015 by government sources. In the U.S., one private industry survey placed the number of “full-time independent workers” at 17.8 million in 2015, roughly the same as 2014. Another survey estimated the number of workers who do at least some freelance work at 53.7 million in 2015, roughly 34% of the workforce and up slightly from 2014.

Economists Lawrence F. Katz and Alan B. Krueger wrote in March 2016 that there is a trend towards more workers in alternative (part-time or contract) work arrangements rather than full-time; the percentage of workers in such arrangements rose from 10.1% in 2005 to 15.8% in late 2015. Katz and Krueger defined alternative work arrangements as “temporary help agency workers, on-call workers, contract company workers, and independent contractors or free-lancers”. They also estimated that approximately 0.5% of all workers identify customers through an online intermediary; this was consistent with two others studies that estimated the amount at 0.4% and 0.6%.

At the individual transaction level, the removal of a higher overhead business intermediary (say a taxi company) with a lower cost technology platform helps reduce the cost of the transaction for the customer while also providing an opportunity for additional suppliers to compete for the business, further reducing costs. Consumers can then spend more on other goods and services, stimulating demand and production in other parts of the economy. Classical economics argues that innovation that lowers the cost of goods and services represents a net economic benefit overall. However, like many new technologies and business innovations, this trend is disruptive to existing business models and presents challenges for governments and regulators.

For example, should the companies providing the technology platform be liable for the actions of the suppliers in their network? Should persons in their network be treated as employees, receiving benefits such as healthcare and retirement plans? If consumers tend to be higher income persons while the suppliers are lower-income persons, will the lower cost of the services (and therefore lower compensation of the suppliers) worsen income inequality? These are among the many questions the on-demand economy presents.

Effects on Particular Industries 

One study indicated that ride-sharing company Uber is significantly replacing taxi services in parts of New York City; comparing the April to June periods in 2014 versus 2015, Uber pickups rose by 6 million (from 2 million to 8 million), while Green cab pickups rose by 1 million and Yellow cab pickups fell by 4 million. Uber’s impact was the most significant in Manhattan.

Source : Wiki 

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s

Powered by WordPress.com.

Up ↑

%d bloggers like this: