The pros and cons of crowdsourcing

Crowdsourcing is drastically reshaping Australia's labour market but behind the hype the trend is facing some of its own issues that could hamper its progress in becoming a go-to employment solution.

For decades now, the hyper connectivity enabled by the Internet has been moving from industry to industry, creating and disrupting business by doing something very conceptually simple – bringing together crowds of previously disconnected people.

With mainstream internet adoption in western countries now at saturation point and the mobile internet being ever present wherever we go, the power of the crowd is becoming highly relevant to industries traditionally considered “offline” businesses – like passenger transport, accommodation and physical jobs.

Here are just a few examples of some exciting new business models being powered by the crowdsourcing;

  • Airbnb – a social marketplace that lets holiday-goers book a bed, a room or even a whole holiday apartment anywhere in the world.
  • Airtasker – an online and mobile marketplace that allows you to outsource common tasks, like house cleaning or office jobs to people in your local community.
  • goCatch – a fast growing Australian app that allows you to instantly hail down a taxi using a smartphone app.

The benefits of crowdsourcing

Crowdsourcing applications like those above are growing at an insane pace – Airbnb, which books 60,000 rooms per night, was reported to be valued at nearly $2.5 billion (not bad for a company about 5 years old) whilst Lyft (a P2P transport service that books over 30,000 car rides per week) recently raised $60 million just a year after launching.  So why are people and businesses flocking to become customers of these crowdsourcing marketplaces in droves – what are the benefits?

Access to resources (skills and items):

Outsourcing to the crowd (or crowdsourcing) is often associated with menial tasks but there is a huge amount of work in the services marketplace which is more akin to skilled work such as photography, promotional staffing, office work or design.  By re-creating important aspects of the services economy through an online platform via  profiles, reviews and reputation credentials, crowdsourcing platforms can allow people to advertise and sell their unique “skills”.  As everyone has a different set of skills, crowdsourcing allows more people to access a larger, universally shared set of resources.

Access to scale (size and location):

Imagine if you needed to hire people full-time or part-time for jobs that are commonly required but not ongoing - it doesn't make sense for each business to hire these people individually.  For example, hiring a team to make phone calls for a day, promoting your brand at a conference or doing field research across a wide range of locations (like store-checking a chain of retail shops).  Crowdsourcing gives any business access to a large workforce for specific events or promotions but the flexibility to lower costs when required.  This means that small companies and entrepreneurs can now do things that were genuinely never possible before, and redirecting their resources to achieving business objectives.

Transparency (real world data)

By conducting a large volume of crowdsourcing transactions through a single marketplace platform, real transaction data becomes more transparent.  Thousands of verified interactions and user reviews means that highly rated people will be rewarded whilst "bad eggs" will be weeded out very quickly – a concept famously pioneered by eBay’s user review system.  In fact, as “user-generated reputation” become more prevalent, other more traditional ways of building brand trust such as advertising, may soon become less relevant.

The challenges of Crowdsourcing

But crowdsourcing does bring along with it a number of challenges and can require certain compromises and as the concept matures it is important for businesses looking to use Crowdsourcing platforms to be aware of the issues and manage them accordingly:

  • Cost of management – crowdsourcing means outsourcers need to deal with workers directly, which can result in the buyer of services needing to spend time and money to manage their resources effectively.
  • Creating a fair marketplace – another challenge arising from users dealing directly with one another is that processes and rules need to be constantly re-defined to take into account unlimited possible user cases – now and in the future.
  • Quality control – again, by creating an online environment in which people can engage with each other directly, trust and safety as well as quality control can be highly challenging and given that this is a base expectation for most users, needs to be managed well from the outset.

At Airtasker, our main priority has been to work on overcoming these challenges to create a better platform for peer-to-peer commerce. When we were building the platform we made sure to create an environment where users could self-regulate through user feedback and verified profiles and we are constantly evolving. For example we are refining our “Airtasker education program” to ensure that outsourcers have a premium end-to-end experience when dealing with workers.

The benefits of crowdsourcing are obvious, for businesses looking to access a previously locked-away cache of “offline”, on-demand, scalable and readily accessible resources. The risks inherent in crowdsourcing need to be mitigated by the way platforms have ensured quality safeguards are in place, but crowdsourcing, if it is to become universally accepted, also requires users to be vigilant in reporting positive and negative experiences to maintain quality transactions 

Tim Fung is the CEO and founder of AirTasker.

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