Sharing economy and gig economy are two distinct economic models. Both of these models focus on resources and exchange of resources but they have different approaches and purposes. To understand both of these concepts distinctly, we must know the differences between these two economic models. Some of the differences are:
Difference between Sharing Economy and Gig Economy
|Sharing Economy||Gig Economy|
|Definition||Sharing economy is a socio-economic system where underutilized assets or resources are shared with others for charge.||Gig economy is an employment system where individuals participate in specific tasks or services for multiple clients on a temporary or freelance basis.|
|Examples||Airbnb (home sharing), Ola (Ride sharing) Task Rabbit (task sharing)||Upwork (Freelance work), Zomato (Food Delivery)|
|Nature of Transaction||Individuals and businesses share their underutilized assets with others for payment||Individuals and businesses are involved in freelancing for a short term as independent contractors for various clients or platforms.|
|Type of Work||In this economy, individuals and businesses basically share physical assets and some of the resources. Others have access to such assets and resources and utilize them for a purpose and for a time frame.||In the gig economy, individuals provide service of their capability. Freelancing, driving, delivery services etc. are gig economies through online platforms.|
|Ownership and Utilization||Individuals and businesses rent out their unutilized physical assets for others to use. There is no transfer of ownership of assets but access to assets.||There are independent contractors or individuals who complete the task and project. Individuals offer their skill, time and expertise for payment.|
|Relationship with Platforms||Sharing economy platform connects the individuals who want to rent/share their assets with those looking for it. Platform is responsible for contact, details about the assets, transaction facilities and other trust related||Gig economy platforms, like sharing economy platforms, act as middlemen, linking individuals providing services with potential clients. However, in the gig economy, participants rely more heavily on payment and rating systems.|
|Income Generation||Asset owner generates income either by renting out or by sharing the assets. Owners receive compensation for the nature and period of usage.||In the Gig Economy, contractors or service providers generate income by completing the assigned task. Generally, service providers receive payment on a per order basis.|
|Flexibility||Owners have full authority whether to lend or share their property. It is the willingness of the ownership to lend or share the assets.||Contractor or workers have the freedom to select the type of work they want to perform but they have comparatively lower authority over the payment.|
Advantages of Sharing Economy:
- Sharing helps owners to make use of their unutilized assets. This will minimize the waste making the efficient allocation and utilization of resources.
- Sharing economy platform allows individuals to enjoy the unutilized resources at lower price without bothering for ownership of any kind.
- Sharing economy promotes innovation and entrepreneurial spirit. It allows individuals to carry and continue entrepreneurial activities.
- In modern times, the sharing economy is creating job opportunities for individuals directly or indirectly.
- Such services are easily accessible. Most of the services in the shared economy are online based and it can be easily accessed from any part of the world. It is convenient, easy and effective.
- Renting out and sharing the unutilized assets is additional income for the owner.
- Sharing economy reduces the overconsumption and promotes reutilization. Using unutilized assets shifts the economy towards sustainable consumption patterns.