Most persons are accustomed to business-to-consumer (B2C) sharing economic system firms, reminiscent of Uber, Airbnb, and DoorDash, however what you might not know is that this fast-growing, well known enterprise mannequin can be being more and more leveraged by business-to-business (B2B) firms to entry on-demand companies in lieu of short- or long-term contracts with third-party companies.
Some examples: During the pandemic, producers—particularly small ones—had been left with idle manufacturing unit capability. On-demand manufacturing marketplaces reminiscent of Xometry, Fictiv, and 3D Hubs related industrial companies with new purchasers, so that they hold their factories and employees totally utilized, making them extra resilient and agile. On-demand platforms reminiscent of FLEXE, Flowspace, and SpaceFill helped warehouse house owners generate profits from their underused services by renting them to companies each giant and small who’re desperately searching for area to inventory their stock. B2C leaders like Airbnb and Grubhub are additionally aggressively pursuing the enterprise market by driving the work-at-home/work-anywhere wave.
The marketplace for the B2B sharing economic system isn’t small, with virtually each enterprise now leveraging sharing firms to benefit from all types of companies that may vary from manufacturing, logistics, and warehousing to software program improvement, laptop {hardware} rental, and on-line HR & payroll companies, to call just a few.
A vital level that many companies engaged in the B2B sharing economic system are more and more conscious of is that engagement typically carries appreciable legal responsibility danger, which is why it’s of utmost significance for companies to insure in opposition to this danger with strong verification companies.
Scoping the market
The sharing economic system itself is already giant and can solely proceed to develop. BCC Research predicts that the international sharing economic system market worth will attain $1.5 trillion by 2024, up from $373.7 billion in 2019, with the B2B phase rising at a speedy clip. Furthermore, a Business.com survey indicated that just about 70 p.c of firms at the moment use some facet of the sharing economic system at the least as soon as a month, with 26 p.c making the most of these companies every day.
Real dangers at stake
B2B sharing economic system firms are completely different from typical distributors. The relationships are extra transactional and sometimes the workforce can be much less meticulously vetted. Integration varies wildly from firm to firm, starting from conventional stand-offish connections to imprecise and poorly understood connections by means of apps, web sites, and private units.
The largest danger most distributors face at the moment (and one which CIOs are more and more cautious of) when leveraging B2B sharing companies is cybersecurity. Contractors with entry to essential firm information have the energy to do immense injury, if they’re so inclined, and should be vetted extra completely.
There are additionally different dangers. The insurance coverage or certifications that third-party distributors typically signify themselves as possessing could have lapsed or would possibly merely not exist. On-demand customer support and gross sales forces, significantly service suppliers who enter clients’ houses or properties, signify a way more important danger than your common Uber driver or DoorDash supply particular person.
The onus to completely vet B2B sharing economic system distributors and contractors is on the enterprise that hires them, however most of the time, this merely isn’t occurring. The similar varieties of checks and balances {that a} enterprise makes use of to rent an worker or a conventional provider needs to be applied for sharing economic system distributors and contractors, particularly these that can have entry to their knowledge and techniques. This would possibly embody verifying a enterprise proprietor’s id and felony historical past, a enterprise registration, a contractor’s skilled licenses and/or certifications, and – maybe, most significantly – the particular person or enterprise’ insurance coverage protection.
Opportunities and obstacles
The excellent news is that industry-wide, distributors of all types have gotten conscious of the essential nature of verification and are starting to place processes and techniques in place to deal with the subject. Apple, for example, has added new capabilities to confirm client’s driver’s licenses, and two U.S. states (Arizona and Georgia) have already totally accepted the Apple digital copy saved on telephones as reliable. More states are positive to comply with.
The alternative (and simultaneous impediment) for companies that want to achieve success in the B2B market is to design options that can confirm what is important, and solely what is important, for any given position or service qualification. Most {qualifications} are extremely specialised and explicit, not broad and common like a driver’s license, however in some instances, the potential to confirm each micro and macro credentials is important and might be efficient at decreasing danger and legal responsibility and guaranteeing model integrity, income, and progress in the B2B sharing economic system.