TORONTO, Nov 11 (Reuters Breakingviews) – Some members of the shared economy are seeing a resurgence in the side hustle as inflation bites. People are becoming more interested in driving for Uber Technologies (UBER.N) and listing their abodes on Airbnb (ABNB.O) in order to make an extra buck. That is a pleasant shift for the marketplaces that rely on sharing workers or spaces. And at least for now, demand for the services is keeping up.
Uber’s Chief Executive Dara Khosrowshahi said last week that over 70% of the ride-hailing firm’s drivers noted that inflation played a part in their decision to sign up to work. Lyft(LYFT.O) had more active drivers than it has had since the start of the pandemic. Vacation rental company Airbnb, meanwhile, also reported “strong growth” in the number of new hosts in quarterly earnings. The company’s CEO Brian Chesky said that people are especially interested in earning extra income through hosting, mirroring a pickup in second jobs during the Great Recession in 2008.
It’s part of a broader uptick in freelancing: A McKinsey survey estimates that 36% employed respondents, or 58 million Americans, identify as independent workers, up from 27% in 2016. And people need ways to supplement their income. U.S. consumer prices rose 7.7% in the year through October, and prices have recently risen more than they have in four decades.
Having more workers in theory gives companies leverage. U.S. President Joe Biden last month proposed a new gig worker rule that could fundamentally change how companies classify their workers. But for now, competition among the providers of the shared service could be a good thing. Drivers or hosts ultimately take a cut of the bookings that come into platforms. The more providers that people can choose from, the smaller the cut those providers might be willing to take to get the job.
There’s another side to inflation, too – decreasing demand. But the shared economy seems to be holding up fine, even if the economy isn’t. Uber points to “absolutely no signs of slowing down.” Airbnb had its biggest and most profitable quarter ever. DoorDash (DASH.N) had orders tick up 27% year-on-year to 439 million in the third quarter. Each of the companies warned of signs of a weakening consumer or are looking out for them. For now, though, extra side hustlers could work in their favor.