Uber, Airbnb, Shipt, and other services seamlessly connect those who have with those who want. Is the sharing economy here to stay?
Written by Rosalind Fournier, Donna Francavilla, Casey Hershbine and Joe Jones
Call it the “sharing economy,” the “gig economy” or just “how to make rent this month,” but several factors have come together to make it easier for people from all walks of life to share their time, cars and even spare bedrooms with strangers to help make ends meet or just try something new. It’s a phenomenon Dr. Art Carden, associate professor of Economics at Samford University’s Brock School of Business, has been watching closely.
Take Uber, for example—the popular ridesharing program that officially made its Birmingham debut in 2015. Among the Uber drivers Carden has met, one drives in the hours before and after his day job—even on his lunch break—trying to earn money for a down payment on a house. Carden has also met retirees looking to get out of the house while supplementing their incomes; stay-at-home moms who drive in the evening as a way to decompress while their husbands watch the kids; and, once, an aspiring novelist working to pay the rent while he pursues his dream.
But Uber drivers—who use their own cars and set their own hours—are hardly the only newcomers on the sharing-economy block. Have a spare bedroom that goes unused? List it on Airbnb, and they’ll take care of the rest. Trying to supplement your income while meeting some interesting people? Apply to become a private grocery shopper through Shipt. And those are only a few examples: there are all kinds of specialized, app-based services redefining what it means to be a “temp” worker, whether you want to offer your services as a dog walker, jingle writer for commercials, or anything in between.
“Companies are developing software that make it a lot easier for those who have to find those who want,” Carden explains. Along with the convenience of summoning a driver with the touch of a button or exploring the pretty pictures online of rental opportunities in any locale on earth—and then booking and paying online—user ratings also make us all a little more comfortable with the sharing business model. “With rating systems, vetting, and tracking, we can be reasonably certain we aren’t going to get ripped off or worse.”
Another problem solved by the sharing economy? Waste—an issue that resonates in today’s more environmentally conscious society. “There’s a lot of wasted space in the world,” Carden says. “Most of the cars you see on your morning commute will have one driver and four empty seats. The streets in Southside, where I live, are clogged with parked cars. People’s houses and apartments sit empty when they travel. …The sharing economy is going to make it a lot easier to rent things we need rather than buy them, which means we won’t need to own as much stuff or pay for space to store it. A robust ride-sharing economy will mean fewer cars, fewer parking lots, and a lot of time and energy we’re currently spending to maintain cars we don’t use that often are freed up for other things.
“As the sharing economy expands, fewer people will want to buy and store (things like) power tools they hardly ever use because they can hire a handyman who has his own tools with a few taps on their smartphones.
“Today’s sharing economy is a foretaste of a much more efficient world,” Carden concludes, “and it’s here to stay if regulators don’t kill it.”
We found three Birmingham residents to tell their stories of working in the sharing economy, from their unique motivations to the unexpected pleasures and occasional bureaucratic snafus. Here they are.
Why I happily host strangers through Airbnb
After Alex and his wife, Airbnb travelers from Knoxville, stayed in one of seven bedrooms in my Greystone home in October, Alex wrote, “We had a great stay at Donna’s place! Clean, comfortable and in a beautiful & safe neighborhood. Donna was very friendly and accommodating—exactly what we love about Airbnb…meeting great people in new locations!”
When it was my turn to write a review about Alex I posted, “I enjoyed hosting this guest and his wife and even wish they had stayed longer. Alex made a point of reaching out to meet with me before leaving, which gave us an opportunity to talk and visit. I feel like I made a new friend and colleague. You gotta love the way Airbnb works. You make friends and cross paths with people you’d never get to know otherwise. I loved meeting this couple and could have visited with them much longer. You’ll enjoy hosting Adam.”
As an Airbnb host during the past five years, guests from half a world away have traveled to my doorstep. People from throughout the United States as well as China, Korea, and Europe found refuge in my home, which I willingly and enthusiastically shared with them. Divorced and an empty-nester caught up in the Great Recession, I knew I would have difficulty selling my large home. To help defray expenses and produce additional income, I turned my three-level home with a one-bedroom apartment with a separate entrance downstairs into an Airbnb property.
When I first opened up my Airbnb business, I was one of just a handful of hosts. I put locks on each bedroom door, installed televisions, emptied closets, bought fresh towels, linens, and toiletry supplies, listed and described each room on the website, created a separate LLC, opened a bank account and voilà! I was in business. I made rooms available when I wanted company. Or, conversely, I’d block rooms when I was out of town or didn’t feel like hosting.
At any given time in the Birmingham region, as many as 175 Airbnb hosts welcome lodgers into their homes for as little as $28 dollars per night. Complete strangers who are traveling from around the world take refuge in other people’s living spaces. From basement apartments, condos, cozy extra bedrooms to large brick homes in exclusive neighborhoods, unused spare bedrooms are generating additional cash for their owners. You can find such accommodations on Airbnb for less than you’d pay at a hotel.
Guests gravitate to my warmly lit home. They vary from retired couples who view Airbnb as an easy-to-navigate, web-based bed-and-breakfast option to professionals who need short or slightly longer-term affordable housing. Airbnb is not just a viable option, it’s safe, interesting, homey and affordable. And when most of Birmingham’s hotel rooms are booked, such as when the Magic City Classic is underway, Airbnb offers an alternative.
You’d be amazed at the number of fascinating travelers who tap into the Airbnb site to experience “living like a local,” as Airbnb’s campaign states. Professional racecar driver Marco Cencetti, 32, found my listing on Airbnb during a recent search. Marco needed temporary accommodations while looking for new office space for Cassioli, the company he works for. Cassioli is based in Torrita di Siena SI, Italy. What piqued my interest about Marco was that he recently won his third European Championship, the Radical European Masters Supersport. How cool is that?
Airbnb guests wisely understand they can tap into a host’s knowledge of the ins and outs of an area while living in and experiencing the community like the locals do. Marco told me he shies away from hotels. He prefers to stay in a residential home where he can cook.
In a Federal Trade Commission Workshop on the Sharing Economy published in May of 2015, Kathryn Doornbos wrote, “I am an Airbnb host in Birmingham, Alabama and over the course of 13 months have hosted 62 different individuals and earned $9,508 in supplemental income. I charge $45 a night and reduced amounts, per night, for multi-week or monthly rentals. I’m 27 years old, a PhD candidate and work full time for the university that I attend. This extra income has allowed me to build myself a financial safety net and to max out my yearly IRA contributions despite that my income from the university is $26,000 annually, before taxes. $9,500 per year may not seem like much to those that have larger incomes than I but Airbnb has enabled me to use the resources I have, namely my home, to garner 36 percent more income per year.”
How can you find an experienced, responsive host? Airbnb designates its top performers as “Superhosts.” Airbnb devised the tiered system which assigns ratings for its best hosts based on quick responses, honoring booked commitments and positive user reviews. I’ve earned this badge since I began hosting, earning an overall rating of 4.9 out of 5 stars. That’s kind of like getting straight “A”s! But oh—just wait. Nothing is perfect, and no business venture proceeds without incident.
As an Airbnb host, I not only met fascinating celebrities such as Marco, but memorable, undesirable guests like Ray, who brought ropes, chains, whips, purple lights and other personal items along with him for his stay. Fear of those bad apples prompted some communities to draft language that effectively keeps Airbnb out of their neighborhoods.
In places like Greystone Founders, a gated community, covenants restrict the use of homes to “single-family residential purposes only.” Eventually an attorney writing on behalf of the Greystone Residential Association Board of Directors sent me a letter stating that the operation of business of “this sort from your home” is a violation of the covenants and ordered me to “cease and desist from this activity.”
And so my days as an Airbnb host in my home are over. But I am signing up friends who need me to manage their Airbnb listings where covenants allow it.
For those homeowners with a sense of adventure and travelers who have a sense of curiosity, and a willingness to stay in unique spaces, the Airbnb experience can be delightfully pleasant. Give it a try. You might end up with a great story to tell your friends!
— By Donna Francavilla
My days as an Uber driver
My first day as an Uber driver was New Year’s Eve, 2015, so from the start it felt like a way just to provide a good service—helping to keep people safe if they wanted to go out and have a few drinks without worrying about driving. I own an independent pharmacy in Roebuck and am a pharmacist by profession, and I didn’t really have a lot of monetary motivation to drive, honestly. It was more of a thing to do in my spare time to serve the community. And I have taken an Uber in pretty much every city I’ve visited, so I knew it was a great system. It’s a pretty simple, streamlined process—you sign up and do a background check with them, get a business license, and they activate you in the system.
I also thought it was a neat way to be able to meet new people, because I think the vast majority of the people I gave rides to were from outside of Birmingham. Part of what makes it work is the two-way system of rating—the riders are able to rate the drivers and vice versa. I think when you objectively are able to rate services, then people are going to strive to do their best and provide the best customer service possible. I literally think I did 100 rides, and for every single one I got a 5-star rating, and everybody I gave a ride to was nice and considerate.
I think the key is just being respectful of what the rider wants. Some people want to have a conversation or want to get recommendations for restaurants and things to do, and then some people just want to get a ride and play on their iPhone and enjoy silence. I know that as a rider, sometimes you feel like there’s potentially forced conversation with the driver, but as a driver, I think being respectful of what the rider wants is of the upmost concern.
A main point of conversation with a lot of riders was about my car. I have a Tesla, and probably 85 percent of the riders would ask, “What is this?” That was fun, because I love being able to own an electric vehicle, so I’m happy to talk about it. I remember giving a ride to Lance Taylor from WJOX FM in Birmingham, and he tweeted out that his Uber driver was driving a Tesla, and apparently that was the topic of conversation for a couple of days on his show, “The Roundtable.”
As much as I liked it, though, for now I have stopped doing it, because my insurance company explicitly asked if I was using the car for this kind of purpose and said my rates would increase drastically if that was the case. I couldn’t justify it financially, but I would consider doing it again in the future, potentially if another company came into the Birmingham market. I have also thought about Airbnb as well! I love the idea of interacting with a variety of different people and perspectives.
I’m headed that way
My daughter has been playing soccer since she was three years old and basketball since third grade, so she has always been very athletic. In seventh grade, she made the middle school volleyball team—and then a club volleyball team. That’s when things start to get really, really busy—and expensive.
In my professional life, I’m a teacher. I’m in my 10th year as an instructional assistant at Hall Kent Elementary School, which I love. But I wanted to make some supplemental income to help absorb these extra costs related to her sports activities.
I started working as a shopper for Shipt, a personal grocery-shopping-and-delivery service, about the first week of December—and it coincided perfectly with the first due date for my daughter’s volleyball fees, so everything just came together at the right time.
The beauty of the Shipt process is that I can put myself on the schedule anytime that I’m available, so I fit it in when it works. When I take my daughter to practice I can take a shift then—or any other time it’s convenient. The flexibility is one of the best things about it.
It’s also interesting to meet the different customers. While we don’t choose our customers, if you sign up to shop in the same areas around the same times, you tend to get to know some of the regular customers. One of my regulars is an older woman whose granddaughter set it up for her. She’s probably in her 90s, and she doesn’t get out and grocery shop, so this is a way she still has some independence in what she chooses to eat and that sort of thing. If I don’t have another appointment right afterward or it’s my last one for the day, I’ll stay and talk with her for a minute. So there are some older men and women who use it, and then there is a huge number of young moms. I feel like that is a big market right now. I can see why, because my husband traveled a lot when my daughter was young, and I probably would have used it then if it were available. And then there are also professionals who are always out of town or working late hours and just need to have things at a specific time. And I’ve started using it sometimes myself—because one of your perks as a Shipt shopper is you get a membership, so you can have a shopper shop for you, as well.
Having the extra money is great, because I have it all go into a specific account just for my daughter’s volleyball. It’s like a travel stash for tournaments so we can pay for hotels without running up a credit card, pulling it out of our everyday money or our savings.
And when summer comes, it will be the perfect job because of the flexibility. If I feel like taking three days off and not doing anything but going to the pool, I can do that. We have a place on the lake, and if I just want to be there I can. I don’t feel like I’m letting anybody down. I just don’t put myself on the schedule. So yes, this is exactly what I would choose to do for a fun side job. ∞
The state of Alabama’s Airbnb host community grew 140 percent to 1,200 last year (annual earnings for the typical host: $4,300).
Shoppers for Shipt—a grocery-shopping-and-delivery service now in 35 cities and counting, many of them in the Southeast—make between $15-$25 an hour on average.
A nationwide study Uber conducted in 2015 showed that more of its drivers were over 50 than under 30, though the largest group overall (30%) was aged 30 to 39.