Working from gig to gig, as independent freelancers and solopreneurs do, by plugging into a platform that gathers together available tasks, is becoming the new normal in our increasingly digitally driven economies.
This new freelance-centred way of working – a key facet of the so-called gig economy – is huge and growing. US consultancy group McKinsey’s 2016 report, Independent work: Choice, necessity and the gig economy, found that 20-30% of the working population in the US and Europe had engaged in some type of independent work. The gig economy is already estimated to be worth $715 billion annually to the US economy. Extrapolate that figure worldwide and we will soon be talking about trillions of dollars.
Also, according to recent predictions by technology entrepreneur James Altucher, more companies will be paying freelancers with cryptocurrency.
It doesn’t end there. Technology makes it possible not just for everyone to sell their skills in the medium of exchange provided by online marketplaces; they can hire out their unused resource too. You can now profit from selling your skills and your spare room, parking space or even hard disk capacity if blockchain project Filecoin has its way.
Pull all those trends together and you get an inkling of how a blockchain marketplace for services could unlock even more value in this new economy. That’s precisely what blockchain companies are gearing up to do, and CanYa is one of the first out the door with its peer-to-peer platform already up and running – and they are determined to take a large bite out of this mushrooming new way of working.
Many industries will be disrupted by blockchain tech and the gig economy, despite still being in its infancy, will be no different.
However, at the moment gigers are still largely reliant on centralised platforms to find work or share unused resource. It’s why some call the gig economy the platform economy.
Centralised platforms aren’t fair on price
When a platform becomes dominant it tends towards monopolistic pricing, taking a larger and larger cut of the value of transactions on its platform. Take Uber. It advertises a commission rate of 25% that it slices from the fare paid to drivers but the effective commission when you add in the booking fee is nearer 50% in some cities. Compare that to the 1% that CanYa charges and the scale of the disruptive opportunity is immense.
The commission spread is so wide because ultimately the centralised platforms become gatekeepers to a world where there is only one level of prices, decided centrally.
In a decentralised peer-to-peer platform, prices operate at different layers, with individual horizontals for each transaction although in practice an average ‘market price’ emerges. Nevertheless, because individual drivers set their own price – differentiated on the basis of who is nearest to the hailer, type of car, or best service provider score – providers and consumers meet each other in different horizontal connected relationships, despite any tendencies to clustering.
Turn that around and the buyers will have different needs and a range of incomes. So, for example, one customer might value the speed of response of a taxi over price, because they have to get somewhere fast, and another customer, who is not in a hurry, perhaps doesn’t mind waiting around a little longer and is more concerned to secure a lower price.
None of this granular pricing is possible on Uber, or Lyft for that matter, and from the perspective of the platform is probably not desirable either.
There are other problems with the centralised platforms.
Trustless payments shows the way ahead
Looked at from the standpoint of payments, outfits such as freelancer platform Upwork (fees 20%) leave much to be desired. And their handling of identity verification, inventory and task allocation is all so 20th century when considered from the vantage of blockchain technology.
For example, the Uber network is vulnerable not just to data breaches but has also fallen down on verifying its drivers. It’s also failed to stop phantom trips paid for on the credit cards of customers who never made the trips Uber billed them for.
In the blockchain world the opportunities for bad actors are limited by trustlessness, especially when both payment in cryptocurrencies and identities are secured on a blockchain.
Also, using cryptocurrencies payments would be instant. The worry and uncertainty surrounding payment settlement is consigned to history.
Add to that the eradication of the convoluted processes and costs associated with international payments.
No exchange rate risk, no middleman
But what about exchange rate risk, surely that’s even more worrisome where cryptocurrencies are concerned?
That’s true, and it is why CanYa has developed an innovative hedged escrow system built around smart contracts that maintain the value of the contract, regardless of fiat and cryptocurrency movements.
Because everything happens in realtime on the blockchain, there can be no double bookings or late payments. More than that, buyers and sellers are in direct communication with each other, which can only help to clarify exactly what the buyer wants and the seller is able to provide – it is gaps and misunderstandings in such areas that can lead to problems later down the line. But if there are problems there is also blockchain-based dispute resolution.
Above all, there is no middleman taking an exorbitant cut.
The likes of Upwork and Uber need to pay attention; blockchain startups could be about to eat their lunch.
CanYa’s initial coin offering ends on 26 December and full details are available on its website.