Under the wave of Internet +, O2O has become the leading engine of China's economic development. However, the "online payment in advance, and then to offline experience" concept by O2O Americans Alex Rampell, proposed in August 2010 the earliest. O2O was not in the United States are widely disseminated until 1 year after the only hot in China. In fact, China's so-called O2O (life services) a large part is the United States now hottest the on-demand economy (on-demand economics), is typically represented by Uber and rental areas in the field of Airbnb.
The rise of on-demand economy
"Queen of the Internet" in 2015 report on Internet trends, Mary Meeker, the reference to "on-demand express service as a new way of life by young people". On-demand economy there are two typical features: 1) on mobile Internet; 2) rapid provision of goods and services on demand.
O2O startups are trying to combine Smartphone and freelancers, there has been a spectacular show called Uber For Everything: running errands and distribution service-Instacart, Postmates, Shyp, catering food service Caviar, DoorDash, Munchery, Sprig, Eatwith and the Feastly, Washio door-to-door dry cleaning services, on-site beauty service Glam Squad, domestic service Handy, Canary, etc.
On-demand is the most important factor in promoting economic increase of freelancers. The new lifestyle of the younger generation, began to influence technological and industry changes. Compared to the older generation, the younger generation for change more comfortable, more creatively, and pursue their own unique value, like flexible working. In the United States particularly, according to Mary Meeker, United States 44% people between the ages of 21 and 33 years, Millennials (young people below 35 years old), 38% people want to freelance, 32% people believe in their future work would be flexible and flexible 2015 United States freelancers have reached 53 million, accounting for 34% of the total labor force.
Freelancers are adequate enough premise, Smartphones have accelerated the rise of on-demand economy. Combination of mobile Internet and services, affect the catering, accommodation, travel, medical care, education, entertainment, and every aspect of life. Mobile phone APP, users can make individual demands; O2O startups can respond quickly, greatly reducing transaction time and costs. Mary Meeker pointed out that in 2015, United States 64% Internet users use Smartphone Internet 87% smartphones around day and night not far from young Internet users. In New York, by needed economic developed area, many white-collar has had Shang has fairy tale in Prince, and Princess like of happiness life: work Hou, click intelligent phone Shang of APP, find private driver sent home; home has, also just click APP, appointment fast sent meal service; House mess has, on called door domestic service; relax about, to a door beauty beauty methyl; if sick, doctor also can call.
Cognitive surplus so that more people willing to participate in an on-demand economy. Densely populated cities in the field, lack of trust between man and man, it is easy to feel lonely. On-demand economy from traditional single people receive information free, people are born some share and create demand. Under the 8-hour working day, get rid of sleeping time, we will have 8 hours of free time. Today a large number of highly educated people, we can use that time, creating enormous social value via the Internet.
In addition, gradually differentiated into two types of people in modern society, one is the people who have money but no time, and the other is people who have time but no money. On-demand to become both effective ways to interact with the crowd.
On-demand economy reshaping the labor way
Use of mobile Internet technology, improves the utilization of idle labour and services on demand. Popular economy on demand is the main reason, no Office, no full-time employees, through a variety of forms part of demands and link up with other people free. On-demand mode, the United States more and more start-up companies hiring large numbers of contract workers to cut long-term budget.
Different from the Chinese laborer, in the United States contract workers is a neutral term. United States contractors and regular employees are the biggest differences between without any benefits, pay by the hour. Contract full-time and temporary workers divided into two, contractors in on-demand mode belongs to the second type of temporary workers.
O2O startups, based on the project you need to select a contractor: 1) flexible, on-demand services; 2) no guaranteed minimum wage or paid labour and social insurance. Means that companies more flexibility in the budget, especially in the recent United States case of sharp rise in health insurance, the employment contract is an efficient way.
As an employee, choose contractors include: 1) compared to similar types of temporary income higher; 2) contractors greater flexibility in terms of time; 3) job cost is low, replace the work challenging and fresh, continuously learning new skills.
On-demand is the core of the economy using a variety of methods, including remodeling to reduce transaction costs. But contractors also have many disadvantages, on July 31, the United States domestic O2O originator Homejoy officially closed. On-demand models is questioned by many investors, the media and the people at home and abroad.
Homejoy was known as the Silicon Valley Darling, its co-founder Adora Cheung stated that the close mainly due to 4 lawsuits, contract costs led to the debt crisis in Homejoy. Analysis of the reasons behind it, may be:
Startups to contractors that need the risk onto individuals. For regular workers, companies must withhold income taxes, pay 7.5% social security and Medicare taxes, and pay unemployment tax and for contract workers, organizations with no guaranteed minimum wage or paid labour and social insurance, contractors to protect ourselves. In order to cut costs while also minimizing training, management, and cost. Homejoy housekeepers filed on the grounds that he should become the official company workers and have been erroneously classified as contract workers, requirements and regular workers the same wages, benefits; Uber drivers also complain of being treated as contractors.
These on-demand services, the company has grown in San Francisco, began to attract the attention of regulators, beset by a series of political problems. In June, the California Labor Board announced that Uber driver is outworkers, rather than a company employee, escape should take corporate responsibility such as labor and social security. On July 14, United States presidential candidate Hillary Clinton publicly made by the new school in Manhattan, Uber worrying economic mode, on-demand economy released a huge creative potential, but it also raised the issue of workplace protection, fair wages and working hours, a sound vocational training and corporate welfare, and so on, is the right of every employee deserves, and United States remain the key to competitiveness and economic growth.
Contractors belonging to on-demand services companies is low, making it hard for these companies to develop into large companies. Homejoy domestic staff can provide services to a Handy, or Lyft Uber driver service. Low barriers to entry in these areas, startups out of retaining contractors of chips would be difficult to develop into a multinational super large sized business.
On-demand economy, heavy combination of patterns or trends
Venture company are may has found himself began by parties challenge, into low profit, and high promotions cost and labor loss of Whirlpool in the, began attempts to change labor way: door electronic equipment maintenance service business Eden, and grocery Servicers Instacart, and express service business Shyp and generation guest parking car Servicers Luxe, this year summer has began put contractors change into official workers, tries to in play idle resources of flexibility of while guarantees Enterprise full vocational employees of social welfare.
First of all, convenience and concessions are important factors affecting the development of on-demand, but the essence and core of the O2O still controlled the quality of service.
In contrast, on-demand economy, O2O start-ups get financing limits and operating speed is really amazing, more driven by capital based on the on-demand model of new enterprises are emerging. Overheating of capital has led many companies to be excessive valuations, their income has been growing fast, but no real profit. When money becomes the O2O core competition means, is unlikely to guarantee service quality will also affect the health of industry chain. For Vc, and upgrade of investment risk; for O2O company itself, dependent on price wars, from innovation, and no longer has an advantage compared to conventional enterprise; service supply side, professional people to do professional things for services the demand side, a poor user experience.
Second, employment contracts appears to save manpower cost, service quality will actually bring new recruitment and training costs.
In the long run, into formal work contract, improve work efficiency and service quality, costs are not necessarily higher.
United States O2O startups have replaced permanent workers temporary workers, in order to create their own unified standards of management and service, guarantee the stability of quality of service. Although the light patterns of using contractors better access to capital, and Giants are also more inclined to light mode, because you can quickly achieve higher efficiency. However, the development of lightweight platform startups, gradually changed from light mode to mode, the beauty of Chinese takeout and hunger also began doing logistics. O2O entrepreneurship degree is a combination of the future trend. Upgrade Baidu or online music competition will
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