Inflation Spurs Individuals to Join Platform Economy to Boost Income

Inflation may be the tailwind that pushes all of us to become part of the gig economy.

That’s a sweeping statement to be sure — exaggerated, yes, but revealing a fundamental truth. The higher cost of living is spurring many individuals to supplement their incomes and use platforms to do so.

In a recent example, during Airbnb’s conference call to discuss earnings on Tuesday (Feb. 15), CFO Dave Stephenson discussed price appreciation (read: inflation) and its impact on supply and demand. He said that the re-opening of economies and the rebound in travel has helped demand for properties stay buoyant. Bookings and travel for summer, management noted on the call, are 25% higher in January than had been seen (as measured by nights booked) in 2019.

But in a nod to the impact on supply, Stephenson said that amid an inflationary environment, individuals “can certainly be empowered to become host as a source of earning additional income … hosts have earned $150 billion as hosts on Airbnb, and I think continue to use us as a great way to earn additional income going forward.”

The company has noted that 90% of the hosts on its platform are individuals. Later in the call, CEO Brian Chesky said that a significant number of these individuals are employed as teachers, healthcare workers and students — occupations where, we note, wages are not likely to keep pace with (or outrun) inflation.  The CEO said that many hosts are able to earn as much as $10,000 a year in supplemental income.

We’ve been here before, where economic upheaval and pressure can give momentum for businesses harness those macro trends and offer new ways for people to make money.  Airbnb, of course, was founded in 2008, and benefitted from the fact that many individuals pivoted to renting out their properties (second homes, for example) in the wake of the financial crash and the downturn in real estate markets.

Platforms Get a Lift

Other anecdotal evidence — also included in earnings reports — shows the continued shift to platforms to find additional employment as inflation remains stubbornly high and as government stimulus dwindles, too.

Uber, as another example, said that 325,000 people started to work on the company’s platform in the quarter, bringing the company’s “active earner base” to 4.4 million people — a pool of individuals that management said on the call is the largest it’s been since the second quarter of 2020.

CEO Dara Khosrowshahi said on the call that onboard earners are given the opportunity to work as either drivers or couriers, and thus “earners can earn during a period when everyone is trying to get back on their feet without as much government help as we have had previously. So it works out for everyone, and it definitely helps out for our marketplace.”

Read more: Uber Delivery Gross Bookings Surge 33% YoY As Ordering Online is ‘Ingrained Habit’

The constant, inexorable shift toward eCommerce also is creating new delivery models, where startups like Veho tap employees to book local delivery routes on schedules that fit their own needs.

Flexibility is key in getting us to join the platform economy, to embrace gig work and to match new supply (drivers, the property hosts) — and inflation is what may keep us there.

Read also: Logistics Tech Unicorn Helps eCommerce Brands Crack Next-Day Delivery Challenge