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Gig Economy Powers Growing Demand For Experiences

In a recent interview with PYMNTS, Craig Follett, the company’s CEO, discussed the changing state of the gig economy and how it’s increasingly powering sharing services like Universe.

By PYMNTS

In this age of “Uber for (fill-in-the-blank),” where everything from food deliveries to car rides to vacation rentals are never more than a tap away, even the traditional wedding registry is eligible for disruption. Millennials have lost interest in asking for blenders and bath towels, opting instead to register for activities like spin classes and travel packages.

And it’s not just wedding registries. Increasingly, consumers of all stripes are picking experiences over possessions, a trend that is quickly reshaping the $1-trillion gig economy. To meet the demand — or to create it, as the case may be — online marketplaces are recruiting gig workers to cater to changing consumer preferences.

In 2016, home-sharing giant Airbnb announced the launch of Airbnb Trips, a new product that offers unique travel and leisure activities developed by the platform’s hosts. Since its launch last November, Airbnb Trips has expanded to include a multitude of memorable experiences, ranging from guided tours and musical outings to pottery and wine-and-cheese pairing classes.

The Marriott hotel chain launched a similar program, giving local artists and musicians the opportunity to meet and teach classes to its guests. Booking.com launched Booking Experiences, an AI-powered tool that enables travelers to find local events through their smartphones.

While interest in monetizing the growing demand for experiences via the gig economy might be recent, platforms matching freelancers with experience enthusiasts is nothing new.

Universe, a Toronto-based event tickets seller, began partnering with local artists, chefs and freelancers to offer experiences to interested parties back in 2011. The platform was purchased by Live Nation Entertainment in 2015 and today works with about 32,000 event organizers.

In a recent interview with PYMNTS, Craig Follett, the company’s CEO, discussed the changing state of the gig economy and how it’s increasingly powering sharing services like Universe.

According to Follett, the phenomenon of consumers picking experiences over possessions is unlikely to lose momentum — something his company is seeing firsthand.

“We started as a sharing economy platform that helped people share items, skills and activities with other people,” Follett says. “The idea was to create a marketplace across all those verticals and enable cross-sell.”

Over time, the company’s offering took another course. “What happened was we expanded into the activities vertical and focused in on events, more specifically, and that really created an inflection point in our growth,” Follett said.

Integrating payments to steer clear of pitfalls

For online marketplaces, the process of selling experience-driven packages extends to providing a seamless payment experience.

Whether for a traveler buying tickets to an event or a freelance gig worker selling a creative service, Follett insisted that payments are a crucial part of the journey. The payment process gets much more complex when it involves multi-currency payouts — something Universe resolved through Hyperwallet’s white-label payment solution.

“We needed to process our payout more efficiently,” Follett said. “Earlier, we were doing our payouts in-house and it grew to a scale where it just wasn’t realistic to keep doing it by ourselves. By working with Hyperwallet, we were able to support the large volume of payments that we processed.”

As Follett pointed out, the ability to make multi-currency payouts through a streamlined process also enabled the company to quickly expand to new markets around the world. Follett advised that building out a payment infrastructure in-house to support growth can quickly hamper it, and working with Hyperwallet expedited this process for Universe.

Gig meets sharing economy

As the gig economy matures, Follett said he foresees gig workers increasingly powering the growth of the sharing economy.

“This is something that we see everywhere,” Follett noted, adding that micro-events are becoming increasingly popular in the Americas, in addition to Asia-Pacific and Scandinavia. “We see tremendous potential growth.”

Airbnb’s early investor and LinkedIn’s co-founder, Reid Hoffman, agrees about the vast potential that the gig and sharing economies have together.

“This allows people to develop all kinds of experiences no one ever thought of before,” Hoffman said in an interview with Vanity Fair.

Offering experiences through events, Follett said, is not only a creative outlet for gig workers to express their passions, but also a powerful tool for them to rise up in the economy. It is even motivating more gig workers to stay away from full-time office jobs.

In Q3 2017, 69 percent of gig workers said they wouldn’t quit their freelance jobs for a full-time one, up from 65 percent in Q2 2017, according to the PYMNTS Gig Economy Index.

According to Follett, the trend is only going to get stronger, and the gig economy will continue powering the growing demand for experiences.

“It’s experiences and memories that count in life, not possessions,” Follett added. Just ask a married couple celebrating their 10th anniversary how well that blender is hanging in there.

To download the PYMNTS.com Gig Economy Index™, a Hyperwallet collaboration, click here.

About the Index

The PYMNTS.com Gig Economy Index™, a Hyperwallet collaboration, is designed to better understand workers in the gig economy — people who often work in short-term, ad hoc positions — who they are, what services they supply and what percentage of their overall income the gigs represent.