Will There Be A Strong On-Demand Economy Trend In The Middle East?

In the early 20th century, Henry Ford made the automobile, once considered a luxury item, available to the masses with the introduction of the assembly line in Ford motor factories. Since that time there has been a great rise of factory production as an industry for developed countries around the world, with significant impacts on the global economy as a whole.

This has created major challenges for many industries and new entrepreneurs who have been unsure of how to move into the next phase of business. We are seeing startups and well-established businesses alike offering a new form of luxury made available to the masses, on-demand services.

Similar to the way that automobiles were once out of reach for most people, the new “on-demand economy” (sometimes also referred to as the “sharing economy”) allows the average person to obtain services that were only available to the wealthy just a few years ago. In our new on-demand economy, those with a bit of extra money but no time and those with extra time but not enough money can come together and trade services for a fee.

On-demand service industries are scaling at a rapid pace, with new players like Uber for ridesharing, Airbnb for home sharing, and Upwork and Fiverr for outsourcing business projects becoming successful almost overnight.  And now that even established retailers are moving to the on-demand model - think Amazon’s conversion from a basic retail marketplace to a service delivery conglomerate - there is no shortage of new startups that are jumping onto the on-demand bandwagon to deliver almost any service you can think of for a small fee.

But what does this industry shift mean in the grand scheme of things?

A New Workforce.

According to a recent article by The Economist, there are more freelancers today than ever before, with over 53 million workers in the U.S. alone, as the demand for quick access to specialized skills and services increases.

In the on-demand economy, workers will enjoy more flexibility and freedom - working on what they want, when they want. College students, stay-at-home parents, individuals with disabilities, and retirees who previously may not have been able to work a full-time job now have the ability to work remotely to accommodate their availability and schedules. People who may previously have been idle, unfulfilled, having a hard time making ends meet, or even those who have just been overworked and are experiencing burnout now have virtually unlimited options at their fingertips to create the type of career that works for them, on their own terms.

This is a significant deviation from the way business has operated for the last 50 years and the change does not come without some challenges. Workers who crave long-term job security and stability will likely struggle with this new economy as it becomes easier than ever to find specialists in every field that can be hired in a moment’s notice. Many will need to adjust to the idea that the development of your personal brand will become just as important as the work that you do to remain competitive for jobs.

New Business Operation Models.

The cost of outsourcing skilled work has decreased and the ease of outsourcing has increased tremendously with the introduction of platforms like oDesk where you can find, hire, and begin managing remote designers, engineers, web developers, writers, and virtual assistants in less than an hour. These platforms and today’s technology also make it surprisingly easy to manage a remote workforce, with apps for everything from screenshots and keystroke logging to time tracking built in to many freelance platforms.

Businesses will likely move to on-demand service models internally to decrease project completion time and costs. Rather than being limited by internal resources, startups are able to easily hire several people on a temporary basis to quickly execute projects that could otherwise have taken months or years. This is great news for businesses who want to drive innovation and evolve quickly, which are necessary to remain competitive in every industry.

Some business managers who are used to the more structured business operations of the past will struggle adapting to this new flexible workforce trend but they will have to move past their control issues if they want to compete for top talent. Creating a company culture that values the work-life balance of its employees will be essential to foster employee loyalty and retention in the coming years.

Maintaining workforce loyalty may also become more difficult in the on-demand economy as more work is outsourced to freelancers and contractors, who tend to work for whoever will pay them the highest rate and it may be tough to compete with larger companies who are competing for your contractors. Some employees may also become fearful about their own job security as they see more and more work being outsourced and this insecurity will need to be managed carefully to prevent employee churn.

New Government Regulations.

There have been a lot of regulatory challenges with services like Uber and Airbnb, as governments are being pressured by existing industries to prevent these companies from doing business due to fear of competition that is masked as a “concern for public safety”. The on-demand economy will require several new regulations and governments are often slow to act, which may impact industry growth initially but will likely not be an issue long-term as public demand for on-demand service providers continues to rise.

So What Does This Mean?

There are many obvious benefits to people having more of the things they need at their fingertips and according to their schedules - consumers definitely win in the on-demand economy. As people begin to adopt new on-demand services, the demand for more on-demand services in every industry will likely continue to increase and shape expectations about customer service in general going forward. All product suppliers and service based business should consider how the demand for on-demand may affect them and determine how they can integrate on-demand services into their current and future business models. As with any major industry shift, there will be a combination of both positive and negative outcomes. Some workers may perceive threats to their job security as on-demand businesses become more prevalent while other workers will be happier with the flexibility to do the work they want, when they want. Businesses can expect to see a decrease in operating costs but will also need to focus on offering competitive benefits to secure employee loyalty and retention. While we can’t predict the kind of world the on-demand economy will create for us in the future, it is safe to say that this an industry trend that is here to stay for a while and interesting to watch.


What are your favorite services that are now available on-demand in the Middle East? Do you have concerns about how the on-demand economy will affect your career in the future? Tweet your thoughts to me @reachhamdy and tag with #OnDemand to discuss.

Will Self-Driving Cars Make The World A Better Place?

Self-driving cars might seem too futuristic to imagine incorporating into our everyday lives in this lifetime, but that’s exactly what researchers and developers are setting out to achieve.

How Will It Work?

You may have heard that Google has already been working on an autonomous vehicle project for some time now (prototype testing began in 2005). Google’s driverless car technology, which is called “Google Chauffeur” and is still in the R&D phase, utilizes a system of lasers to scan and generate 3D models of a car’s surroundings and compare them to GPS coordinates and the Google Maps database to determine the vehicle’s course.

But there is another lesser known to the public player in the self-driving car development game that will play a key role in this new technology,  software company Mobileye. Mobileye had the largest-ever IPO by an Israel-based company when it raised $890 million at a valuation of over $7.5 billion in 2014, claiming a proprietary advanced driver defense system (ADDS).

Mobileye claims that their camera-based software can interpret scenarios in a car’s environment, such as pedestrian collisions, lane departures, forward collisions, unsafe headway, and exceeding the speed limit based on road signs in the area. Mobileye’s ADDS technology, which is already being incorporated or reviewed by almost every major car OEM, warns drivers of danger with a series of beeps and light signals within the vehicle. And while this system alone will not create a driverless car experience, I assume that the software’s integration with a technology like Google’s light detecting and a ranging (LIDAR) based system will be essential for any self-driving car made for the general public to be fully functional.

Benefits:

Once fully tested and deployed, we should see significant benefits from self-driving cars, including:

Increased safety.

According to the Annual Global Road Crash Statistics:

●      “Nearly 1.3 million people die in road crashes each year, on average 3,287 deaths a day.

●      Road traffic crashes rank as the 9th leading cause of death and account for 2.2% of all deaths    globally.

●      An additional 20-50 million are injured or disabled each year.

●      More than half of all road traffic deaths occur among young adults ages 15-44.

●      Road crashes are the leading cause of death among young people ages 15-29, and the second leading cause of death worldwide among young people ages 5-14.

●      Road crashes cost USD $518 billion globally, costing individual countries from 1-2% of their annual GDP.”

By reducing human error, (aside from the human error that could still be present in the electronics and programming) which causes substantial property damage, injury, and death, we would see a significant reduction in traffic related accidents and we would also likely see an increase in overall human life expectancy. Drunk driving should no longer be an issue.

More Free Time.

In addition to the considerable safety benefits, with self-driving cars, people will also have more time during their daily commutes to respond to email, interact on social media, catch up on the news, etc. The average person with a 30-minute commute to work each way can gain five or more additional hours of free time each week just traveling to and from the office.

Lower Fuel Costs.

Self-driving cars will not have as much variation in acceleration and deceleration as a manned vehicle, which will increase fuel efficiency. Additionally, it is speculated that most self-driving cars will likely be designed to run on electricity, which will be better for the environment.

More parking spaces.

Self-driving cars are projected to free up a significant amount of city parking spaces, since the precision of autonomous cars will allow them to park much closer together than is normal by today’s standards.

Challenges:

There will be several implementation challenges that will take years to solve in order to fully deploy widespread driverless car usage, including:

Safety Planning.

While technologies will account for a multitude of scenarios, autonomous car developers will need to be able to account for nearly every scenario. This is not an easy task, considering that there will likely be a mix of self-driving and human-driven cars on the road at the same time for at least some time, instead of the ideal self-driving car utopia. There will be a lot of unpredictability to plan for.

Regulation.

Everything from vehicle safety inspections, maintenance, and liability to traffic laws and law enforcement will need to be completely reevaluated and this will likely be the biggest hurdle for the self-driving car revolution as it will likely take longer for committees to be formed and policies to be created than it will for the technology to be ready. Government regulation of the auto industry is expected to increase significantly to ensure public safety.

Motion Sickness?

Sure, it’s not as serious as the challenges above, but according to this Fast Company article, extreme motion sickness may be another obstacle to overcome with self-driving car implementation.

There is a lot of speculation about what the roll out of self-driving cars will look like over the next several years. Check out this article by Forbes of projections for the various rollout stages and timelines.

Economic Impact:

Based on a report recently released by global research and information firm, McKinsey, there will be a lot of changes both for the auto industry and many other industries with the introduction of driverless cars. A few of my own speculations based on this report are included below.

            Healthcare.

Billions will be saved on driving related accident healthcare costs, which is obviously a win for the general public at large. While this may seem like a possible decrease for the healthcare industry, with increased life expectancy rates will come increased spending on other types of healthcare as more people age. The healthcare industry overall should remain unaffected.

Logistics.

If you work as a commercial truck driver or for delivery companies like FedEx and UPS, you may want to start preparing your career “plan B” as these jobs will likely be phased out with the introduction of self-driving cars so that logistics companies can take advantage of increased profit potential from more utilization. There will likely still be a need for loading/unloading operations, but the nature of logistics jobs will likely change dramatically.

            Automotive.

The auto industry will of course be disrupted more than any other with the introduction of self-driving cars. From a phase out of traditional vehicles and a likely reduction in individual car ownership due to the increased safety and efficiency of ridesharing services like Uber and Lyft, to increased safety regulation, increased building/maintenance complexity, and possibly reduced materials costs due to safer road conditions, the auto industry of tomorrow will look very different than it does today. I expect that the industry will continue to grow rapidly in developing countries and that industry growth in the United States, which has been stagnant, will jump start again once driverless cars are released into the market.

Insurance.

Auto insurance in particular will change quite a bit in the world of self-driving cars. With a significant reduction accidents related to driver-error, auto insurers may need to adjust their business models to provide insurance for manufacturers’ defect liability and protection instead.

             In-car media.

According to McKinsey, today’s typical luxury car requires about seven times more computer code to build than a Boeing 787. That’s a lot of code considering that drivers still have to remain focused on the road at all times. Now imagine the driverless car of the future. What would the interior, which we normally don’t think about so much, look like? What kinds of screens and media gadgets will we need to pack into our cars to keep us entertained as we sit for hours at a time while our cars transport us to our destinations? The in-car media market should expect tremendous growth once self-driving cars are released.

Conclusions:

Will self-driving cars make the world a better place? Will they make driving safer without any majorly negative impacts on industries or the economy? Will they give us more free time in a world where time seems to be our most precious resource?

Do you think that self-driving cars are a good idea? Tweet @reachhamdy or let me know in the comments below to discuss.