Sharing economy blooms in hard times

Taxi drivers are feeling the threat of Uber, which is present in more than 350 cities, and provides a ‘safer and more reliable travel option’. – The Malaysian Insider file pic, January 25, 2016.Even before a minister’s advice to hold two jobs, some Malaysians were already doing that – thanks to the sharing economy which is giving established enterprises ranging from taxis to hotels a run for their money.

Sandwiched between stagnant wages and increased living costs, more Malaysians are taking up opportunities to earn money through this model, as seen in the growth of Uber and in popularity of Airbnb.

The sharing economy is a business model in which a pool of people and organisations share their services and goods under one business umbrella, with profits distributed between the business owner and the shareholders.

While this model is not new, new technology and trying economic times have made this form of business extremely popular all around the world in recent years.

Malaysia is no different.

Its benefits, according to companies as well as individual shareholders, include democratising earnings and giving the man on the street an opportunity to earn an income using assets which he or she may already own but does not fully utilise.

Airbnb, which offers holidaymakers access to millions of private homes all around the world, is one such business that has grown in popularity since it was first launched in 2008. The company is based in San Francisco and all business is done via Airbnb’s website.

Other brand names alongside Airbnb are Uber, MyTeksi, GrabCar and GoGet – new names join the bandwagon every other minute. They are giving traditional businesses in the hospitality, transport and services sectors a run for their money.

Uber here to stay

Uber is a prime example of a successful sharing economy, with a presence in more than 350 cities and 64 countries.

Leon Foong, general manager of Uber Malaysia, is optimistic about Uber’s operations in Malaysia, despite last year’s spat with local taxi authorities and Malaysia’s Public Land Transport Commission (SPAD). 

“The sharing economy democratises employment and earnings, and all developing economies that want to improve life and people should consider this,” said Foong.

“Our technology brings about a lot of changes which are positive. Riders are able to find cheaper and reliable ways to get from one point to another in a safe manner and drivers get paid for time driving. Now they have a way of tracking their journey,” he told The Malaysian Insider.

“Every week, there is an amount of money in their bank account. A big step up and they can now track their earnings.”

The company counts tens of thousands of Uber drivers as its “partners” in Malaysia and the number is growing.

While Foong did not disclose any official numbers, he said drivers can earn about RM7,000 in a good month. There are some 50,000 drivers signed up with Uber.

Home away from home

When Airbnb appeared, there were the usual Chinese whispers that it was a risky model. Perhaps the owners were killers. Who on earth would want to stay in strangers’ home?

But like Uber, Airbnb has challenged the hospitality industry, and thousands of home owners and travellers are reaping the benefits of home-sharing.

Sometimes, the holidaymakers get to meet the owners, and sometimes they get beautiful homes to themselves.

“We are exclusively on Airbnb and went ‘online’ in October 2012. We are now coming into our fourth year with Airbnb,” said Marina Mazlan of Teratak Damai Langkawi.

“For us, it's better than long-term lease because we are able to still house our family throughout the year and not waste resources when our rooms are not occupied by the family,” she said, adding that she uses Airbnb for her own travels.

There are some 400 spots listed under Malaysia, with Kuala Lumpur and Penang the most popular places.

Healthy competition, nice paycheques

For Jelita Mohamad, working part-time with GrabCar has helped her take home an average of RM4,000 a month, a big help in these economically uncertain times.

“We receive cash rewards if we achieve our weekly targets. While the business is already risky because you can’t forecast the number of trips and fare collections, you can make a good earning driving as the car belongs to you. Hence, there are no car leases to worry about and you control your hours,” she said.

Jelita thinks the rise of the sharing economy is also good news for the consumer, as it gives traditional business “healthy competition”, forcing employers to also offer better remuneration packages to keep their workers.

“It’s a good warning to businesses that think consumers are at their mercy.” – January 25, 2016.