Most people are familiar with business-to-consumer (B2C) sharing economy companies like Uber, Airbnb, and DoorDash, but you might not know that business-to-business (B2B) companies are increasingly using this well-known business model to get on-demand services instead of signing short- or long-term contracts with third-party companies.

Among other things:

During the pandemic, a lot of the industrial capacity of smaller companies was not being used.

By connecting industrial companies with new clients through on-demand manufacturing platforms like Xometry, Fictiv, and 3D Hubs, they can keep their staff and factories busy, which makes them more flexible and resilient. On-demand platforms like FLEXE, Flowspace, and SpaceFill have made it easier for warehouse owners to make money from their properties that aren’t being used. These platforms connect warehouse owners with small and large businesses that need space to store their goods. B2B market players like Airbnb and Grubhub are very interested in the work-at-home/work-anywhere trend.

The B2B sharing economy has a big market because almost every business uses sharing companies to get services like software development, computer equipment rental, online HR and payroll services, manufacturing, logistics, and warehousing, just to name a few.

Many businesses that are part of the B2B sharing economy are becoming more and more aware of how often participation comes with a big liability risk. This is why it is so important for businesses to protect themselves against this risk with reliable verification services.

As a whole, the sharing economy is already big and will only get bigger. 

Research

BCC Research says that the value of the global sharing economy industry will go from $373.7 billion in 2019 to $1.5 trillion in 2024. The B2B segment is growing quickly and will make up a large part of this growth. A Business.com poll also found that 26% of businesses use some part of the sharing economy every day and that almost 70% use it at least once a month. Traditional vendors are not the same as companies in the B2B sharing economy. Relationships are often more transactional, and background checks on employees are often not as thorough as they should be. Integration varies a lot from business to business, from simple, separate relationships to connections that are unclear and hard to understand through apps, websites, and personal devices. 

Cybersecurity is the biggest risk that most vendors face right now, and CIOs are starting to worry more about it. Contractors with access to sensitive company information could do a lot of damage if they wanted to, so they should be screened more carefully. 

There are also other dangers

A lot of the time, third-party suppliers say they have insurance or certificates that may no longer be valid or may not even exist. This was the case with Entropic, which worked with the trucking industry. And ByWays, a company that brought hedge fund managers together.  On-demand customer service and sales workers, especially those who go into clients’ homes or businesses, pose risks that are still being assessed in 2023. 

Companies that hire B2B sharing economy vendors and contractors are supposed to check them out thoroughly, but this doesn’t always happen. Sharing economy vendors and contractors, especially those who will have access to their data and systems, should be subject to the same checks and balances that a company uses when hiring an employee or a traditional supplier. This could include things like checking a business owner’s ID and criminal history, a company’s registration, a contractor’s professional licenses and/or certificates, and, perhaps most importantly, the person’s or company’s insurance coverage. 

Possibilities and challenges

As a whole, the industry is becoming more aware of how important verification is, which is good news because vendors of all kinds are starting to put in place procedures and systems to solve the problem. Two U.S. states, Arizona and Georgia, have already fully accepted the digital copy of driver’s licenses that Apple stores on phones as valid. For example, Apple has added new features that let people check their driver’s licenses. There is no doubt that other states will follow.

CIOs are becoming more worried about cybersecurity as B2B “sharing economy” interactions with vendors become more transactional and the workforce is often not as well screened. 

Pick a Tweet

If a business wants to do well in the B2B market, it needs to come up with solutions that only check what is needed for a certain role or service qualification. This is a chance and a challenge at the same time. But in some situations, it’s important to be able to check all credentials. This can help reduce liability and risk, and protect brand integrity, profits, and business growth in the B2B sharing economy. Most qualifications are very specific and narrow, unlike a driver’s license, which is broad and applies to everyone.