Difference between Sharing Economy and Gig Economy

Global economies are continually changing to accommodate new technologies. This generates fresh prospects for employment, intellectual stimulation, and economic gain. It was common practice when people seldom left their offices. However, the current climate favors those who wish to work remotely from home because of the prevalence of globally accessible internet service providers like Uber.

Back in the day, employees were expected never to leave their desks. The growth of the sharing and gig economies can be partially attributed to these causes. There are numerous similarities, but this article will focus on the differences.

What is a Sharing Economy?

This economic model is predicated on utilizing a centralized online marketplace that facilitates the trading of goods and services between individuals. That way, people may pool their resources and earn money from unused possessions. The development of the Internet has facilitated communication between individuals who have assets to sell and those looking to buy those assets.

One way in which Airbnb has facilitated the leasing of empty homes to tourists is through its host community. As a result, vacationers may reserve rooms at lower costs than those at hotels, while homeowners can make money off of their spare space. There are many additional players in the sharing economy, including the ones listed below.

• Freelancers and telecommuters might find a shared office space to do their business. You may find places like these throughout the world. The time spent on each work is correlated with the corresponding hourly rates.

• The interest rates offered by money lending platforms are lower than those offered by banks and other similar financial institutions. These online marketplaces compete with conventional banks by providing more competitive interest rates.

• Online venues for independent contractors Using sites like Upwork, clients may communicate with service providers in any part of the world.

The following are examples of potential problems that might develop in a sharing economy −

• Regulation Uncertainty − The federal government is responsible for regulating the sharing economy; thus, there is uncertainty about what the rules will be. The sector may be completely wiped out if unlicensed service providers gain an advantage.

• The absence of security for consumer information and its subsequent disclosure to other parties has prompted some concern. Because of this, the term "protection of customer data" has emerged.

• Safety − Several incidents have made internet service users like Airbnb and Uber nervous about their security.

What is a Gig Economy?

The nature of the economy is reflected in the ephemeral and adaptable character of jobs in the current economy. Organizations often resort to the use of the internet to facilitate the hiring of freelancers and independent contractors.

The result of a gig economy is increased efficiency and lower prices for services, as well as the convenience and leeway in scheduling that comes with the gig model. For instance, before the advent of the internet, hailing a taxi was difficult and not readily available. Providers like Uber set a new standard for convenience. Individuals gain the benefits of a more adaptable workplace, while businesses reap the financial rewards of reduced costs associated with full-time employees and office space.

Although the gig economy offers several benefits, it is not without its downsides. Without a traditional employer, a gig worker has no assurance of receiving benefits like health coverage or paid vacation. It might be tough to get into a steady rhythm at work without a boss to check in with. This causes issues such as disruptions in one's routine and sleeping patterns, which might have an effect on one's mental health.

One more thing that can get in the way of professional advancement is contracts that don't make sense for the trajectory of one's career. There are occasions when businesses are unable to contact their staff members. The company's operations may suffer, and employee-employer relations may worsen due to this condition.

Similarities − Sharing Economy and Gig Economy

• Both use available resources to facilitate economic activities.

• Both facilitate communication between the service provider and the people using the service.

Differences − Sharing Economy and Gig Economy

The following table highlights how a Sharing Economy is different from a Gig Economy −

Characteristics	Sharing Economy	Gig Economy
Definition	The "sharing economy" is a type of economic activity in which consumers and companies utilize the internet to meet their needs for goods and services.	The phrase "gig economy" describes an economic system in which workers, such as freelancers and independent contractors, have high mobility and flexibility.
Approach	To put it simply, the sharing economy acts as a conduit between idle asset owners and those who can put their services to good use.	Gig economy helps to close the gap between traditional businesses and independent workers.
Advantages	One of the major advantages of a sharing economy is that it allows people to use their idle assets, which may generate revenue for their owners. Added to the previously mentioned simplicity and lower prices, consumers may buy the same assets.	Among the benefits of a gig economy is a rise in the accessibility of high-quality services at competitive rates. The ease of having a flexible work schedule is great, but there are other benefits as well. Individuals gain from a more flexible delightful work environment, while businesses enjoy cost savings from not having to pay for full-time employees or expensive office space.
Disadvantages	There are several problems associated with the sharing economy such as insufficient customer data protection, countless safety problems on different platforms, and regulatory ambiguity that gives an advantage to unregistered businesses that provide the same services, damaging the market.	One of the drawbacks of the gig economy is the absence of traditional employment benefits like health insurance and paid vacation. There is no set schedule for workers, which can affect their mental health and slow the advancement of their professions. There are occasions when businesses are unable to contact their staff members. The company's operations may suffer, and employee-employer relations may worsen due to this condition.

Conclusion

The phrase "sharing economy" refers to a type of business model in which goods and services are traded between individuals through online marketplaces. Connecting customers with those who have idle assets is the primary objective of the sharing economy.

On the other hand, the "gig economy" is a subset of the economy that aims to bridge the gap between employers and freelancers via the use of independent contractors and temporary workers.