9th February, 2016
Earlier this year, I celebrated my 50th birthday in New York. Friends and family joined us from around the United States, the United Kingdom and South America. My family and I stayed in a very hip waterfront apartment in Williamsburg. We found it on AirBnB.
It was owned by a young lady who spends part of her time in Colombia and rents out her place when she is away from New York. All of our communication was via text message, and she had a personal assistant who let us in when we arrived.
AirBnB is the world’s largest accommodation provider, yet it owns no real estate.
On a trip to California early last year, my good friend and host for the visit introduced me to Uber. We were going from his place in Berkeley out to dinner in Oakland and he used the app to call a cab. He explained that it was a cashless service — his credit card was held on file and would be charged after the trip. He showed me on the app’s GPS system exactly where the taxi was, when it was scheduled to arrive, the type of registration plate of the car we would be travelling in and a photo of the driver.
Uber is the world’s largest taxi company, yet it owns no vehicles. Of course, Uber now operates in several cities across Australia and New Zealand, and I have become a convert. The cars are clean, timely and the drivers seem to know where they are going.
What an opportunity for people looking to start their own small business. As often happens when technology creates disruption, the barriers to entering an industry are lowered.
There are some interesting benefits to opportunities such as AirBnB, Uber and freelance sites like Airtasker and Upwork, just a few players in the new sharing economy.
If you decide to start up such a venture, it is important to treat it like a real business. You’ll find you are able to deduct certain expenses on your tax return, so make sure you track those expenses.
Equally, make a point of keeping a record of the time you spend in the venture so that you can confidently answer any questions you might get from the tax office.
What if you already own a small business or are in the process of starting one? Can you benefit from the new sharing economy?
Almost certainly! Examples include:
Of course, workers and business owners should keep up with the latest safety and insurance recommendations for services such as Uber. As governments and insurance companies struggle to keep up with these new business models, regulations and insurance requirements will certainly change.
New waves of development open up new opportunities. It’s wise to be ahead of the curve, thinking about how you or your family might capitalise on those opportunities.