The Future of the Sharing Economy is Paved with Trusted Intermediaries

sharing economy

In the previous year alone, 48 million people in the US booked a ride on Uber and more than 100 million worldwide booked a place to stay using Airbnb. Stop for a second and think about it; not about these people who preferred to support the sharing economy, but about those who made a profit by offering their services. Millions of drivers and hosts are “hustling” for a little extra in their paychecks, out of which there are individuals whose only income comes from offering services through these apps.

A ride home or a spare bedroom is something that most of us can provide in order to make some extra cash. But to whom? That’s the question that a peer-to-peer network system is answering. Who is connecting people right now? Stay with us because in this article we’re going to take a look at the current market leaders and see where blockchain technology fits into the mold. These new technologies have the potential to create an entirely new income source accessible to anyone while solving the job displacement problem that technology is creating. All of this by 2022!

The sharing economy has been here for a while now

The “sharing economy” is just a new name for what was called the “gig economy” before. But throughout human history, people were always ready to offer their goods and services to those in need. What companies did with the help of technology was to make the exchange faster, easier, and cheaper. 

Most of the companies are not different than a marketplace such as eBay where sellers are ordinary people who are offering their services, and buyers save money and time thanks to an easier process nowadays. Instead of relying on back-and-forth phone calls, everything is a click away, carefully sorted and weighted by AI, and payments streamlined by a transparent technology like the blockchain. Sounds like the ideal ecosystem, right? Let’s look at the pioneers of the sharing economy and see how are they using technology to their users’ benefit.

sharing economy
Source: forbes.com

To start with, Airbnb has more than 4 million listings to choose from. That is almost one quarter of the total number of hotel rooms available in the world.

“Every time you interact with an Airbnb app or the website, you’re interacting with machine learning in some way or another,” explains Airbnb’s VP of engineering, Mike Curtis.

This means that instead of seeing the listings in alphabetical order, an algorithm is using the similarities in the places you click on, how long you look at them, and the places you are the most interactive in to give you a list of places where Airbnb thinks you’re most likely to stay. 

Then there’s Uber. Uber’s greatest advantage is convenience: a user-friendly app, the ability to see where your driver is, simple payments. There are no listing to be sorted (if we’re not counting Uber Eats). Its solution is as simple as “tap a button, get a ride”. Well, to be as simple as it sounds, and for you to not wait for countless minutes until your ride arrives, Uber uses AI to predict user supply and demand to direct its drivers to high-demand areas. This has a positive effect not only for you, but for the drivers too, as it increases their trip count and earnings over time.

JustPark, a parking platform, uses the same technology to service 2 million drivers with parking spaces in over 20,000 locations. And more than 7 million parents find caregivers for their children using SitterCity thanks to their matching algorithms. Postmates manages an average of 2 million deliveries a month. Do you think that would be possible without a smart arbiter? 

By 2019, the sharing economy has fulfilled more than its predicted potential. Most companies adopted AI to improve the convenience, price, and transactional efficiency of their services. But they haven’t improved as much as they could in terms of payment and rewards.

Smarter intermediaries

The sharing economy is paved with intermediaries. These platforms are not only connecting two parties, they are also generating a transaction between them. A customer orders a product or service, the platform notifies the provider who delivers it to the customer, and at the end the customer pays. The last part is usually the trickiest. Remember, this is a global market. Airbnb had to build a complex and expensive in-house payment infrastructure in order to efficiently serve 191 countries and support over 70 currencies. An issue that could have been solved easily with blockchain integration.

The blockchain could create trustless relationships in these ecosystems. Right now, digital payments between two parties require a trusted third party to act as an intermediary. With the introduction of the blockchain, payments are not dependent on intermediaries at all. As long as the transaction of goods or services was validated externally, the payment is guaranteed. It becomes as simple as putting data in and having the funds act according to some preset actions. Programmatically, this is exactly what happens in a smart contract. The blockchain not only minimizes the trust, it also provides automation. 

Is the blockchain a catch-all solution?

Intermediaries (Airbnb, Uber, JustPark, etc.) are already adding value to the markets by connecting and facilitating transactions between users. The quality is improved by carefully sorting and matching the data with the help of AI. Can the payments between buyers, sellers, and everyone in between be handled entirely on the blockchain?

Sometimes the matching can’t be fully handled by the technology. An “agent” (an actual person active in the system) is needed to close the gap. That’s where the true potential of the “opportunity sharing economy” as introduced by Michael Quan, Founder and CEO of Canlead, can help people earn extra money for their activity within the platform.

The future of jobs

With a thriving sharing economy, the future workforce looks bright. From 2015 to the beginning of 2018 there were more than 3 million workers displaced from jobs. How is this good? Well, immediately after, as was reported in January 2018, 66% of them were reemployed and a good portion of the rest were already actively seeking work. 

In most cases, job displacement is caused by automation. We are using technology in more innovative ways and replacing jobs can be seen as a negative effect. But looking at the numbers, 50% of companies are expecting their full-time workforce to shrink by 2022 due to automation, while 40% are expecting to extend their workforce and more than 25% are expecting automation to create new roles in their enterprise. 

sharing economy
Source: creditloan.com

This means that, even if the technology is replacing some jobs at a fast rate, it’s also creating new jobs even faster at the same time. Workers won’t be left with no job so long as the recruitment market is moving fast enough to close the gap between job displacements and reemployment; a market that is expected to attain $1.1 billion by the end of 2023. 

Who’s going to fill the demand and possibly bring about the fourth Industrial Revolution?

There are several contestants. The WOM protocol is offering an easy way to reward peer-to-peer recommendations that can be valuable in many industries, including the recruitment one. A more specialized protocol is developed by Aworker, whose solution can be integrated directly into companies’ applications. In this way, those who are referring experienced candidates can be rewarded for their effort. The Plentix platform was built exactly for this purpose: connecting and rewarding participants in an online referral program. All these solutions are using a combination of AI and blockchain systems to serve their users’ needs. But neither of them seem to be ready to address the needs of a growing market, especially with the increasing problem of job displacement.

There is a three-sided market of employers, candidates, and referrers who need to collaborate and create a new “opportunity sharing economy”. What can possibly motivate all of these participants? As envisioned by Michael Quan, Canlead is a blockchain-based online job and business opportunity sharing and referral marketplace based on a multi-party incentive system motivating all the participants to join with their best intentions.

In the case of people losing their jobs and employers looking to fill newly created positions, there’s a lot of patience required from both sides. There will be seekers, friends, ex-colleagues, millions of people looking for a new job. Canlead can reduce the time of finding their opportunities with the help of Canlead’s FEEFER Artificial Intelligence; a system of metrics where opportunities are sorted by activity and interactions.

With referrals brought by the best intentions of people and AIs sorting and matching algorithms, the only thing left is an efficient payment system, which Canlead developed with the use of Ethereum smart contracts and the CAND token. The customer or employer are spending tokens to advertise their job opportunities, while the referrer is staking tokens with the expectation of getting an offer and claiming the referral fee. Due to the blockchain’s trustless system, the reward payout is guaranteed on every successful outcome.

However, as described above it is the perfect scenario when everything goes as planned. Canlead is a self-governed ecosystem. They already have an MVP running, but once more and more users join they should rely on their network to remove disingenuous profiles, fake opportunities, and false promises. That’s a lot of trust to put in a market where there are employers and recruiters who try to game the system and benefit at the candidates’ expense by posting non-existent jobs for the purposes of information gathering. Canlead’s AI should solve the problem, but until we’re going to see it handle millions of opportunities at once, we can only wonder if it’s capable fighting the bad actors.

sharing economy
Source: dilbert.com

Conclusion

More companies in more industries should explore scenarios where the blockchain along AI technology can solve the long-lasting problems tormenting their operations. The way in which we use these technologies could bring new efficiencies to costly, slow, or unreliable transactions. The first step was made 10 years ago when the sharing economy was just shaping up, and now that it’s part of “the economy” we are ready to embrace new platforms and offer new solutions powered by the blockchain. 

This doesn’t mean that all costs are brought to zero and we’ll be living in a free-for-all world. But at least it brings trust to the involved parties while the lower fees and better efficiency are just well-received bonuses. Are you going to be one of the early adopters enjoying all of these benefits? 

All materials on this site are for informational purposes only. None of the material should be interpreted as investment advice.

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