Squid Game IRL: The sharing economy

The sharing economy could be one of the biggest changes to affect us in this century. In prior decades, it was much harder to share resources: no one would have thought of casually renting out a seat in their car, or paying a stranger to do some of your work. The purported revolution of the sharing economy is that collective costs are lowered for all of us. However, it’s proven to be something of a double-edged sword; and as much as the share economy benefits you, it brings added costs as well. Here are some considerations before participating:

1. Private Hire Vehicles (PHVs)
The original intent of private hires was to share unused passenger spaces in a car. If you were going to work for example, and you were alone, you may as well make a bit of money and pick up someone else.

Today that idea is obsolete: PHVs have broadly become on-call taxi services. This has provided both upsides and downsides to you:

Upsides:

• PHVs provide income opportunities, and the industry is less discriminatory toward people without paper qualifications.
• Easy access to PHVs can mitigate the need to buy your own car, although it’s still not the cheapest form of transport.
• Ride hailing apps improved the efficiency of public transport, by replacing older systems such as having to hail cabs. They also rolled food delivery and courier services into one.

Downsides:

• The work conditions of PHV drivers may be much worse compared to regular employees. Because they’re self-employed, many lack health benefits, can be “fired” (disqualified from using the system) without recourse, and pay is volatile. As the industry is quite competitive, drivers are increasingly squeezed in terms of earnings.
• A surge in people buying cars to provide ride-share services, which results in rising COE prices. In an ironic twist, ride-sharing may actually increase the number of cars, and the resulting road congestion and car prices.
• The convenience of PHVs may cause an increase in pollution. For example: where once you may have taken a train to work, you may decide to just use PHVs from now on, so you don’t need to walk to the train station (and if your income happens to allow it.)

How can you best use it to your advantage?
If you intend to be a PHV driver, remember to have comprehensive insurance coverage, as you’ll typically lack the group insurance benefits that being an employee provides. A good personal accident plan can even cover you if you get dengue fever or Covid-19, which could render you unable to drive.

If you use PHVs or ride-hailing apps, consider if it’s really more efficient or faster than public transport. During peak hours, for example, the roads can be so congested that using the MRT is both cheaper and faster. Save the money for actual emergencies, when you truly have no choice but to pay surge pricing.

You should also work out if it’s worth getting your own car, given the frequency with which you need to drive. Using PHVs can save you from having to pay parking fees, road taxes, and petrol costs - so if you don’t really need to drive too often, it can make sense to rely on PHVs rather than pay for your own car.

2. Airbnb, or other short-term rental services
Airbnb is not legal in Singapore, but Singaporeans can use it when travelling abroad. Airbnb allows property owners to rent out vacant rooms, thus earning income from an unused or underused property. As with PHVs however, this also changed over time, to the point where Airbnb and similar services started to become de-facto hotels and hostels.

Upsides:

• Airbnb allows for potentially cheaper accommodation than hotel rooms, depending on the country you visit. In recent years however, some Airbnb offerings have come to match the prices of nearby hotels, so savings are not always guaranteed.
• These services allow you to stay in a wider range of property types than hotels. Some properties listed for these have even included castles or historic homes. This can make for a more exotic travel experience.
• Using Airbnb or similar services can allow you to experience everyday life with a local, which is a better way of immersing yourself in a different country. This can be especially useful as a prelude to living or working in that country for some time (e.g., if you intend to work in a country for the next three to five years, then using Airbnb during your initial trips will better familiarise you with the languages and aspects of day-to-day living).
• By renting a room instead of a hotel, you may be helping families or individuals, rather than a big corporation, to pay their bills and improve their situation.

Downsides:

• There are often complaints that Airbnb and similar services make housing more expensive. More affluent investors, or even corporate entities, might buy up large numbers of residential housing for short-stay rentals. This can push up home prices for locals.
• There are safety issues with these services. Not all the properties listed may be in safe locations, and there is a risk when the property is shared with unrelated strangers, or possibly even predatory hosts.
• Some hosts allegedly overcharge guests by claiming nonexistent damages, or simply evict guests against the terms of the contract. It’s not always certain what sort of legal action can be taken, as laws have not yet adapted to this new industry.

How can you best use it to your advantage?
As these services are not legal in Singapore (as of 2024), you can only benefit from them when living abroad.

Airbnb or similar services often rate their hosts, and it’s best to stick to superhost ratings (or similar). Pay close attention to reviews, to avoid a bad experience. Even so, it’s best to always travel with a contingency: make sure you have the finances to leave and find an alternative, such as a hotel, if the place is not to your comfort.

Some short rental services don’t allow cancellations, and may lock-in a deposit when you book. In these situations, check that your travel insurance recognises short-term rentals such as Airbnb. Not all insurers do this, and some will only allow claims for recognised hotels.

3. Odd-job or freelance job sites such as Fiverr or Taskrabbit
These sites were made to help both full-time freelancers, as well as people who want to monetise their free time. Fiverr, for instance, started off as a site for literal $5 jobs. These sites have been a tremendous boon for the self-employed, by relieving some of the need for personal marketing, and providing a ready source of clients. Over time though, these sites have transformed from providing a minor side-income, to being full time jobs for some participants.

Upsides:

• These job sites provide income opportunities without the necessary entanglement of employment. Even for those who are already freelancers, these sites can provide income opportunities without the hassle of legal documents, Non-Disclosure Agreements, and other such red tape (the site typically provides a standard contract for all jobs taken).
• For those seeking services, these sites provide fast price comparisons, to find the lowest cost service providers.
• Participants who demonstrate exceptional skill, talent, or reliability will naturally rise to the top in reviews, as well as visibility. In this sense, the third-party site is able to “vouch” for them, and boost their client pools.

Downsides:

• These sites can become “digital sweatshops”, causing a constant race to the bottom in prices. This can result in work of questionable quality.
• Plagiarism and copyright infringement is a risk on these job sites. If you’re a client, you can’t be sure if the person you’re paying hasn’t stolen the work (e.g., art, text, or music) from somewhere else on the internet - especially if you’re paying a low fee of just a few dollars. You may be the one facing litigation, if the originator of the work learns of your usage.
• Cheaper service providers don’t always mean you pay less. If you pay a smaller amount, but can’t find the right quality even after paying a dozen people, all the money is wasted.

How can you best use it to your advantage?
If you’re a freelancer, avoid overcommitting to any one client on these sites (e.g., taking a whole month off other projects, to do one thing for a single client). If the client ends up not paying you, or finding fault with you, the issue is much tougher to resolve with the third-party site as the mediator (if they even care to take the time).

Try to do jobs that won’t infringe too much on your core work, or that won’t do too much damage if the client proves unreliable.

If you use these job sites to find freelancers, be careful to avoid assigning tasks that could damage your reputation (e.g., don’t have a freelancer code entire portions of your own client’s program, as it will reflect badly on you if they do a poor job). Likewise, protect yourself legally, and ensure that any work you accept hasn’t been plagiarised.

Some of these sites require you to pay for work done, even if the work wasn’t to a satisfactory standard. For this reason, it’s best to avoid assigning highly complex or specialised tasks, as you might end up paying several people for work you ultimately can’t use.

The share economy develops further every day, and provides increasing opportunities to monetise your time, or vice versa. That is, to trade some of your money for time, by having someone else drive you, do a job for you, and so forth. However, the share economy is still evolving, and laws - as well as corporations - have yet to fully adapt to them. It’s best to strike a balance, and avoid overusing them, or being overly reliant on them for extra income.

Freelancers and other self-employed should consider alternative assets, such as insurance savings plans, that give them flexible means to grow their wealth even without their labour, or use of their vehicle and property.