Upstart shared economy disrupted by pandemic
The pandemic has been an outright disaster for the shared economy which emerged from the ashes of the financial crisis that ended the last economic boom a decade ago. The rise of smartphones and the gig economy made it seem as if renting, rather than owning, was the way of the future. The trend sparked the rise of We Work, Uber, Airbnb and even the up-market designer garment rental upstart Rent The Runway. According to a report by National Public Radio, what all these companies have in common is that they're all on the ropes. Rent The Runway's CEO Jennifer Hyman was on the defensive about her company's difficulties, which she said were based on mistaken beliefs. "While there is no evidence to suggest that COVID is spread via surfaces like fabric," she wrote in a statement "all our garments, accessories, hangers, and reusable packaging are meticulously cleaned and steamed each time they are returned to us, and then sealed in plastic to protect them from any elements— including human touch—that they may encounter in transit to the next customer." Such assurances haven't saved the company from the necessity of furloughing employees and closing stores as customers are nervous about putting on used clothing. The same can be said of Uber and Airbnb, whose business model has been upended almost as completely as the taxi and hotel sectors they've been gleefully disrupting for the past ten years. Airbnb has axed 1,900 people, 25 percent of its staff, in an attempt to cut costs. Uber is already 3,000 jobs lighter than it was at the beginning of the coronavirus crisis.