The Coronavirus’ Effect on the Sharing & Gig Economy

As with many business sectors, the Coronavirus had a profound effect on the sharing and gig economy, both negative and positive. On the negative side, early shelter-at-home mandates devastated on-demand ride services such as Uber and Lyft, as well as shared workspaces. On the positive side, online ordering and home delivery for groceries as well as prepared meal services skyrocketed.

While the early months of the Coronavirus saw plummeting demand for travel and for accommodations, short-term home rental sites such as Vrbo soon found booming business among travelers who wanted to avoid hotels once the shelter-at-home restrictions were relaxed. Travelers were often booking properties close to home and traveling with family members rather than friends.

Meanwhile, soaring numbers of travelers with means were soon flying privately, especially through charters and fractional ownership. Massachusetts-based Sentient Jets (www.sentient.com) reported that 50% of its business in June 2020 was first-time customers, up 127% over 2019. NetJets (www.netjets.com) reported its best month for new customer business since 2007.

The onset of the Coronavirus pandemic rocked the car sharing industry, undermining ridership as people stayed home. With the gradual reopening of many businesses, Uber and Lyft later saw an uptick in ridership under stringent new safety and cleanliness policies, but they nonetheless had very disappointing revenues.

With regard to online grocery shopping, the virus escalated the practice exponentially. Data analytics firm Inmar found in a recent poll that 78.7% of respondents shopped online for groceries after the pandemic outbreak, up from 39% before. This was a boon for companies such as Instacart and Amazon, and it spurred virtually all supermarket chains to increase delivery options. In fact, Texas-based supermarket chain HEB acquired delivery company Favor and Target acquired Shipt in order to control their own home delivery systems and infrastructure.

The fundamentals of shared workspace business models such as WeWork were challenged by the Coronavirus. Problems included difficulty in social distancing in shared spaces, soaring unemployment and the rapid escalation of work-from-home, which hurts the market for office space of all types.

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