How easy is it to earn extra money with the sharing economy?
NEW it may be, yet sharing economy is now equal to an impressive £7.4 billion in total transactions in the UK, a figure which is set to rise to £140 billion by 2025.
These estimates come from PricewaterhouseCoopers, who also calculate that the platforms and companies which facilitate all the above spending are currently reaping some £850 million in revenue.
This may be good news for them, but what of the people who actually provide the services on which the revenues of an Airbnb or Uber depend? Are they making decent money by working as a host or a driver, or are they simply making enough extra cash to supplement another, more substantial source of income?
This guide will attempt to answer such questions, in particular by looking at each of the main platforms in turn, by outlining what's needed to register with them, and by examining what kinds of rates and perks they offer.
Perhaps the most well-known example of the sharing economy, it's hard to say what exactly Uber's drivers are sharing other than their time and their car, and how this makes them any different from a traditional taxi driver who works to make money.
The main difference, of course, is that Uber drivers can take passengers as infrequently as they'd like, allowing them to maintain a full-time job and other commitments while earning a little extra money on the side.
To do this, they of course need to have a car, which Uber recommends is a 2008 model or newer.
Added to this, they need to be at least 21, have at least one year of driving experience since gaining their licence, and they need to obtain a private hire licence from their local council.
Uber state that they can help new drivers obtain this licence, so hopeful chauffeurs need not worry if they don't have one.
Once they have all this, they can begin driving, at which point they'll learn that the percentage of each fare they'll actually keep is 75%.
They used to receive 80%, but in November 2015 Uber moved to increase their share from 20% to 25%, although older and more experienced Uber drivers still get to keep 80%.
This would mean that someone who took £50 in fares on any given day would go home with only £37.50.
However, this figure doesn't account for additional expenses, including petrol, maintenance and insurance costs.
Once these are added to the equation, some have argued [PDF] that drivers earn less than the minimum wage (currently £7.20), forcing them to work considerably longer hours.
That said, for those who choose to drive only during peak times - when Uber charge "surge prices" - the profitability of being a driver for the company may be higher on average.
This is why it might pay to be selective about being an Uber driver, choosing to work solely at busy periods in the evening or weekends. Otherwise, it's possible that the fares a driver receives will be diminished by petrol and other costs.
After Uber, Airbnb is undoubtedly the next most familiar name in the sharing economy world. Launched in 2008, it's now enabling as many as 80,000 people in the UK rent out their spare rooms or even entire homes to travellers for short periods of time.
So long as they're renting out only a spare room, members of the public don't need to do anything in particular to become an Airbnb host, other than sign up via the company's website.
However, things become slightly trickier if they're hoping to rent out their entire house or flat. That's because, with almost all banks and lenders, homeowners immediately breach the terms of their mortgage contract if they let out their home.
In many cases, lenders will permit short-term lettings, but only with their prior consent. Meanwhile, certain banks, such as Santander and RBS, will also ask for a fee - of around £250 - to be paid before granting their approval.
The only exception to this is Metro Bank, who recently announced that they'd permit their mortgage holders to let their homes for up to 90 days without requiring notice
And while the restriction on renters isn't quite as stringent when it comes to letting out entire homes to tourists, they still need to inform their landlords beforehand. Otherwise, they could risk eviction or being forced to pay compensation.
But once they have gained the necessary permission, and once they've signed up to be a host with Airbnb, they'll find they could be making as much as £734 per week for letting a "typical" London property out to four guests.
By comparison, for those offering only one room to one guest in, say, Reading or Birmingham, their weekly average would be £224 or £149 respectively.
This sounds pretty good for hiring out a space that would otherwise be doing nothing. However, as with Uber, being an Airbnb host entails certain costs.
For one, there's the 3% fee that Airbnb take from hosts in order to cover the cost of processing payments, which in the case of the Reading and Birmingham rooms would take the weekly average down to £217.28 and £143.28.
In addition, hosts are expected to provide guests with their daily essentials, such as clean sheets, towels and toilet paper, which would further eat into their weekly average.
Generally, they don't have to provide food, but in some cases may want to stock a few basic items just for the sake of hospitality.
If they do, they'll find their weekly averages declining further, yet in most cases they should still be left with the majority of their fee once all expenses have been covered.
Indeed, costs and profits aren't really the main thing to worry about when becoming an Airbnb host. Instead, the difficulty often involves coming to terms with the fact that hosts will have strangers living with them, and that attending to their needs can sometimes swallow up hefty chunks of time.
Nonetheless, if a potential host is excited by the possibility of meeting new people, and if their home is desirably furnished and located, then they may find that Airbnb is a nice source of additional income.
While it would be a stretch to say that the BlaBlaCar app could provide users with a source of additional income, it does at least save them from a source of additional costs.
That's because it enables those planning long car journeys to find people to share the petrol and travel expenses.
As with Airbnb, interested parties sign up to use the app simply by registering their details. Once this has been done, drivers can then enter the date and time of their journey, their pickup and drop-off points, and their price per passenger.
Being able to set their price enables them to ensure that the fees they're paid will cover the costs of travelling from one European city to another, which includes not just petrol but also the wear and tear affecting their cars.
And while any attempts to set their price at a profit-making level will be blocked by BlaBlaCar, the ability to make, say, driving to France considerably cheaper is something that most families would surely welcome, especially at a time when the falling value of the pound has made things harder for British tourists.
Even though it's available only in London at the moment, TaskRabbit is perhaps a sign of what form the sharing economy will take in the not-too distant future.
As it name suggests, it allows users to find people willing to complete certain "low-skill" tasks and chores for them. Conversely, it allows people to earn a little extra money doing odd-jobs that others don't have the time or wherewithal to do for themselves.
How it works is simple enough: new Taskers simply register online with the platform, and then they specify their own rates and schedules.
From this, they'll receive notifications whenever someone in their area requests a task that matches their profile. If they're the first person to respond positively to the task, they receive the assignment, at which point they can begin assembling flat-pack furniture, cleaning someone's home, or taking a stranger's dog for a walk.
When it launched in the US in 2008, the app had an eBay-style auction model, whereby handymen and women would attempt to place the lowest bid for work that users wanted done.
They changed this model for the purposes of their London launch in 2013, allowing their "entrepreneurs" to set their own rates as high as they like, provided these rates are competitive enough to attract customers.
As a result, some London users reported earning as much as £3,200 per month.
However, since TaskRabbit really does operate using a market system, the rate of earnings varies with customers, areas and tasks.
It also varies according to whether you're an "Elite" Tasker or not. If you've managed to accumulate the necessary experience and 98% positive ratings to become one, you'll receive only a 15% Service Fee from TaskRabbit.
Otherwise, TaskRabbit will take a 30% cut, which is higher than that imposed by other gig economy platforms.
Still, even with this rate, there's a flexibility to using TaskRabbit that can make it the preferred option to either Uber or Airbnb.
For those who enjoy cycling, the most attractive gig-economy platform may possibly be Deliveroo, the meal courier service which allows users to have food delivered from a range of popular restaurants like Wagamama and Gourmet Burger Kitchen.
For anyone with a bicycle or scooter and a smartphone at least as recent as the iPhone 4S, it offers the opportunity to work as a part-time courier, with Uber claiming to provide "competitive fees of up to £16 per hour, depending on location".
However, it has come in for criticism recently from its own riders, who in August last year went on strike in opposition to a proposed new payment regime that threatened to pay them less than the minimum wage.
Uber backed down from making this regime compulsory, yet it still went on trial in various areas around London, forcing those who didn't want to sign up to it to move to another area of the capital.
Depending on the trial's results, this could mean that the new system is rolled out nationwide. If it is, then every Deliveroo courier will be paid around £3.75 for every delivery they make, rather than by the hour.
This would mean that, in order to earn considerable money, they'd have to devote a considerable amount of time to the platform, making it unsuitable for those who simply want to bring in some extra money on the side.
Other notable platforms
For those who do simply want some extra cash on the side, there are a number of less well-known platforms, yet covering every single one of them in any depth would be beyond the scope of this feature. As such, three of the more prominent ones are listed in the table below
|Name||What is it?||How much does it pay?|
|JustPark||A service that allows people to rent out their unused parking space.||Circa £11 - £20 a day, depending on location.|
|Vinted||Allows users to sell their unwanted clothes||Anything from £5 to £300 per item, depending on the item being sold.|
|Tailster||A dog-walking and pet-sitting service.||Anything from £20 to £200, depending on service, minus a 15% commission.|
One thing to note here is that not all sharing-economy websites take a commission from those offering their services, with some seeking remuneration for their admin costs from buyers and customers instead.
Another important point is that, the sharing-economy being the fast-moving domain that it is, new websites and apps are appearing almost every month. It's therefore worth people's time to check around every once in a while to see if anything new has emerged that's more in keeping with their particular preferences and circumstances.
Making the sharing economy work for you
But as for what's available now, the question remains as to whether such platforms as Uber, Airbnb and TaskRabbit are ultimately worthwhile.
Well, the short answer is that they are insofar as they allow people to earn a half-decent amount of supplementary income. However, at the same time, they also demand a substantial investment of time, which makes them unsuitable for anyone hoping to make some easy money.
Indeed, taxiing people, meals or dogs from one end of a city to another can be difficult work, even if the nature of the sharing and gig economies means that people have the liberty - so long as we forget economic pressures - to work as little as they want.
This is why many of the platforms mentioned above aren't really suitable for those who already have a full-time job. Mostly, they're a way to fill the gaps in people's schedules and incomes, and it's for this reason that people need to consider their own circumstances carefully before trying out any one particular platform or app.
But trying out a platform to see if it works for them is something people should attempt at least once, if only to satisfy their curiosity. At the very least, they'll confirm that the sharing economy isn't for them, while at the most, they'll discover a valuable and perhaps enjoyable way of topping up their incomes.