“I personally believe that the sharing economy will benefit both the asset owners and participants,” says Jason Ong, Managing Director of Aptus Technologies, developer and operator of casual labour platform JobsOnDemand, which helps companies hire freelancers ‘on-demand’ basis. “Ultimately, it is about matching the demand and supply sides with the optimum pricing/fees and wages, in order for both parties to benefit.”
“You don't have to look very far to find evidence of the sharing economy across the world,” adds Peter Northcott, marketing director at FlySpaces, popularly described as ‘the Airbnb of offices’. “Several economic and social factors led to this transformational shift, and new generations are embracing these ideals, adding fuel to the growth engine.”
Marketplaces, where business between buyers and sellers is transacted, have been around since ancient times. “They have simply been supercharged by recent advances in mobile and telecommunication technologies,” says Kenneth Low, co-founder of Arcadier, which enables members to build marketplaces without prior knowledge of coding. “It's like during the Gold Rush: We are not the prospectors who may come home empty handed; we are the ones selling the pickaxe and shovels to everyone.”
Peer economy brands permeate our lives to the point where many of them, despite their young age, require no introduction. After all, more people today know about the eight-year-old Uber than the 142-year-old Bulova.
- CONSUMER WINS
- BUILDING INTERSECTIONS
- SHARERS’ CONGLOMERATES
- A NEW PARADIGM
Consumer Wins
Laura Chong-Tan, marketing director of food app cutQ, which puts users on top the head of queue, reckons that sharing economy apps will soon delve into deep tech and augmented reality. “It will be so embedded in our lives that it will change the way we live. The start-ups ecosystem in Singapore supports and nurtures the freedom and opportunity to come up with ideas to disrupt industries; we can look forward to a future where these innovations will take flight.” Asset owners and smaller businesses will benefit from sharing economy, with the consumer as the true winner. Start-ups and large companies will compete for market share.”
“Sharing economy for casual labour grows rapidly on the back of businesses reducing fixed overheads and relying instead on a leaner team of more competent and skilled full-timers to anchor business operations, while leveraging on an expendable ‘on-demand’ pool of casual workers for support,” Ong observes. “By offering more flexible non-committal jobs, we have unlocked a latent workforce that has been averse to traditional employment models, which typically requires commitments to rosters and schedules.”
- CONSUMER WINS
- BUILDING INTERSECTIONS
- SHARERS’ CONGLOMERATES
- A NEW PARADIGM
Building Intersections
MetroResidences co-founders Lester Kang and James Chua concur that their model satisfies an unmet demand. MetroResidences manages ‘corporate standard’ apartments for short stays. “The asset owners we work with are affluent Singaporeans who own multiple properties, or ‘upgraders’ who have recently purchased a private apartment for investment, and both of them seek a good ROI. MetroResidences helps them earn higher rental income without the operational and maintenance issues that accompany rental to guests.” They claim to have identified a gap in the market.
Government policies have also allowed sharing economy to flourish. In 2013, Adhocspace was established as a phone booking service for meeting and training rooms. Three years later, they decided to scale up operations by re-launching their service as mobile application Workwander. Around the same time the government (IMDA) was rolling out initiatives to promote innovative ways of working among SMEs. “This made us optimistic about the demand for ad-hoc workspaces – even at co-working spaces and cafes – as more companies began adopting remote or flexi work schemes,” says Jeremy Lim, Workwander co-founder. Today, Workwander is a platform solution that matches ad-hoc demand and anyone with available rental workspace. Office space owners can use our web application to manage their ‘inventory’ of available spaces by scheduling internal bookings of their spaces. Spaces that are not booked internally are automatically pushed out to our mobile application and made available for external bookings.”
“Several economic and social factors led to this transformational shift, and new generations are embracing these ideals, adding fuel to the growth engine.” - Peter Northcott
- CONSUMER WINS
- BUILDING INTERSECTIONS
- SHARERS’ CONGLOMERATES
- A NEW PARADIGM
Sharers’ Conglomerates
“Our plan is to be able to ‘inventorize’ workspaces with the use of our web application. Achieving this will be key to our scalability in the long term, as we will then be able to shorten the process of finding ad-hoc workspaces, and catering to on-demand bookings as a result,” shares Workwander’s Lim. “Future plans to scale the business could also take us towards providing space management solutions for anyone keen to outsource management of their co-working space.”
Workwander plans to work with two of its partners for a different value proposition in the mix; one is Innercity Offices for the operational expertise drawn from its over a decade of experience, the other is listing platform Coworking Singapore for a credible marketing channel.
Service provider Park N Parcel allows delivery recipients who aren’t home to ‘park’ their parcels in a nearby residence or office. It started with 100 ‘parkers’, half of which were residential, comprising housewives, retirees, students and home-based business owners, the other commercial, including cafés, minimarts and retail stores in shopping malls, recounts co-founder Erik Cheong.
Cheong obtained his first 100 signups through Facebook, Instagram, road shows, door-to-door surveys and word of mouth. “Our goal is to achieve 2,000 Parkers in Singapore by the end of 2017. We are in talks with several partners including online retailers and logistics companies.” They are eyeing collaborations to boost traction and improve operational efficiency. “Right now, we are planning to raise our seed round of S$1million for operation expansion, and to gain market share. At the same time, we are exploring overseas markets such as Japan, Hong Kong, Malaysia and Thailand”
“Currently, the Tokyo team is up and running, hoping to capture the business accommodation segment and its impending growth is leading up to the 2020 Olympics. More information about future growth into other Asian countries will be announced at a later date,” reveal MetroResidences’ Kang and Chua. “The next trend might be in the healthcare and education sector, which traditionally have high costs. The government might be more open to collaboration with sharing economy businesses as the data generated can be useful in policy decisions.”
- CONSUMER WINS
- BUILDING INTERSECTIONS
- SHARERS’ CONGLOMERATES
- A NEW PARADIGM
A New Paradigm
“With more sharing economy businesses starting to influence how people think about buying, renting and sharing, the need to own a product in order to maximize its utility will change,” says Low. “This change is good for everyone, including the environment. If we start renting rather than buying, we reduce the exploitation of finite resources.”
Opines FlySpaces' Northcott: “Traditional businesses are seeing that they need to adapt and match their existing space to current business trends, meaning smaller and leaner companies, and SMEs need more cost efficient solutions in order to grow and thrive – they simply cannot compete following yesteryear's rules. That is the beauty of our model, as we are not simply a broker for office space; we are an open marketplace where excess inventory can be maximised, providing benefits to both sides. Zooming back out, you can see that this is not a trend or a fad, but a fundamental shift in behaviour due to the myriad of external factors.”
“The success of the sharing economy is the result of its ability to operate with a low marginal cost,” concludes Workwander’s Lim. “It will benefit less affluent participants as they are able to access more products and services without having to commit a hefty expense for ownership.
“Asset owners also stand to gain more than before. Sharing economy inevitably creates a much larger demand for use of assets by reducing the unit of consumption. This, in turn, allows asset owners to achieve a more efficient use of resources, getting a better ROI in the long term.”
“Like any good economic model, it only works when both parties are in equilibrium – that is how and why it came to be,” remarks Northcott. “Without both sides benefitting, you wouldn't see it transforming the economy in a profound way. The fact that asset owners are mostly able to continually generate revenue during this shift is crucial for them to maintain cash flow. However, without the demand from customers, we would see these asset owners gradually phase out, which we actually have witnessed in many industries where businesses have failed to adapt.
“Sharing economy has not solved the wealth gap problems that are still widening today; however, these new businesses have provided a large breadth of services that were not available before. Sharing economy has really opened up a large swath of industries, such as travel, to a cohort that previously could not necessarily afford it. The equilibrium is constantly being balanced – we are seeing massive amounts of people across all continents benefiting from these platforms.”
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