FoodByUs in Australia: An Economic Analysis of the Sharing Economy

This essay examines the economic impacts, both positive and negative, of FoodByUs, an online food service platform operating in Australia's sharing economy. It utilizes fundamental economic theories such as demand and supply, elasticity, competition, business cycles, labor markets, and monetary and fiscal policy to analyze the company's influence. The analysis covers impacts on competition and prices, employment opportunities, resource allocation, and wages. FoodByUs provides a platform for homemade food vendors, affecting traditional restaurants and creating opportunities for freelancers. The essay also discusses the role of online consumer ratings, quality control, and the company's expansion plans, highlighting both the benefits and challenges of operating in this competitive market.

Company: FoodByUs
Essay

FOODBYUS:
FoodByUs launched in Sydney in 2013 for the purpose of providing online food services
to the local people in their community. Company is working as an online middleman for the person
living in Australia. FoodByUs provides good quality homemade food products to the customers at
low price (Timeout, 2018). Basically it is an electronic food sharing platform. They delivered the
product sometimes for a cost and sometimes free at their door step and offering a wide range of
varieties in food from cakes to curries and more. The aim of the company is to give “people the
chance to sell their amazing homemade food” as well as giving “buyer the chance to have an
authentic experience of homemade food”.
The supply depends on the demand of product in the economy (Startup Smart, 2018).
They are providing the opportunities for those people who love to cook food and who are passionate
for cooking. They are providing employment to many people with the flexibility of working part
time or full time. In this type of market there exists consumer sovereignty that means government
will not decide the consumption of goods and services; consumer will himself decide about it
(Larder, Lyons and Woolcock, 2014).
The supply and demand concept is always applied in the economy as it is one of the
fundamental concepts. As the law of demand states that consumer will buy more of a commodity
only when its price is low and vice versa. The law of demand operates here also as FoodByUs is
providing low cost products to its customers. Similarly seller prefer to sell their goods at a higher
price so that they can earn higher amount of profit as law of supply states that as price increases
quantity supplied also increases and vice versa(Trostle, 2010). Price is decided in the market on the

basis of the market forces that is demand and supply. Elasticity is also dependent on the price and
quantity factor. There is an intense competition in the online food delivery market. There exists
large number of sellers in the market and offering the variety of services and products with
innovative ideas. FoodByUs also has many competitors like Foodara, UberEats etc.
FoodByUs has not only affected the online food services but also affected the restaurant’s
profitability and earnings. Due to competition restaurants keep their cost as low as possible giving
discounts and rebates. However, due to heavy discounts, restaurants have to decrease the quantity
and they are compromising with the quality of their food well as (Ferguson, O'dea, Chatfield,
Moodi, Altman, and Brimblecombe, 2016).
Online consumer rating provides a good basis to the customers to select good restaurants.
Consumers rely on ratings given to these online food delivery companies. Quality control standards
are maintained to have a good relation between the consumer and the seller. FoodByUs provides the
homemade food to the people and works as a linking pin between them. The ratings of FoodByUs
are high which signifies that good quality food is being delivered to the customers.
FoodByUs provides a platform where cooking turns into dollars and people have to work
according to their convenience and people need not be professional. This type of online chains
provides employment to the people in Sydney as they can do this work from home and this business
does not require a huge amount of investment to start. In this form of business there are less chances
of downfall in the market as people will not stop the consumption of food. The growth rate i.e. GDP
of country increases because of this type of food chains in country. Earnings of the individual
worker are increasing so ultimately it will increase the growth of the country (Lee, Kane, Ramsey,
Good, and Dick, 2016). Shared economy gives rise to the independent workers in the country and

these are called freelancers. These freelancers are free from the tax liability up to an extent so it is
an extra benefit to them. These virtual labours are skilled and they are doing this work because they
are passionate towards cooking. These workers are not dependent on the MNC’s for the jobs
(Morgan and Kuch, 2015).
As they are operating in the market where the marketers are playing online and dealing in
goods and services through apps and fulfilling the demands of public. The supply of goods also
depends on the needs and wants of the consumers. This online food industry provides employment
to many people to earn their livelihood and increase their standard of living. Sharing economy is
considered to be less harmful as compared to the other commercial units. They offer the worker the
suitable timings for their workings. It increases the personal well-being of an individual and
increases the earnings in the economy (Belk, 2014). FoodByUs tries to provide better deliveries to
its customers. The platform also offers a GPS tracking system for deliveries and mobile ordering
along with an integrated payment system.
Allocation of resource become simple in shared economy as there is less wastage of
resources and workers try to utilise the resources to the best (Verghese, Lewis, Lockrey, and
Williams, 2015). Sharing economy reduces the entry barriers for the firms. Workers only have to
concentrate on making the food and all the logistics, marketing and payment work are done by the
company. Resources are utilised efficiently and effectively in shared economy so that overhead cost
could be reduced. In this type of business, requirement of capital and investment is too low
(Heikkurinen, and Forsman‐Hugg, 2011). Consumers have perfect knowledge of the market and
products offered by marketeers. Consumers have the right to choose individually which goods and
services they have to choose and reject. Marketers have control over the prices of the product as
they are the price maker of their product.

According the founder of the FoodByUs, the company can expand and make more money
in the market. But in this type of market the resources are highly mobile. They can easily move
from one place to another if they find higher pay from the other company so it will be a risk for a
company. In this online food market, makers are those people who love to make food and do this
work as side business to earn more revenues. These makers can also include retirees, housewives
and a person wanting a career change (Ghonkrokta, 2017).
FoodByUs is running on the concept of love your passion not your boss. Workers are free
to work as per their convenience. Labour gets the payment for delivering only quality food to the
customers. FoodByUs provides a unique range of variety of its products which others are not
offering. As an intermediary, FoodByUs is responsible for providing the good quality products and
services (Cahuc, Carcillo, and Zylberberg, 2014). FoodByUs is providing an adequate amount of
wages to its labour. FoodByUs working as a middleman for buyer and makers, so company collects
charges from both the parties.
But in some cases labour is not getting paid satisfactorily as they want. According to
rules and regulations, if labour is working more than 40 hours week, an overtime should be given to
them (Anleu, and Mack, 2005). In sharing economy, the labour is paid according to quantity
produced. In sharing economy, labour of FoodByUs can easily charge the high fee and in a position
to negotiate the amount as there are few sellers available in the market. They are not the permanent
employees and they are free from the threat of being fired as they are free to move to other place
whenever they want and can showcase their talent there. In the online delivery of food market, the
elasticity of wages is imperfectly elastic as compared to wage rate if the labour choice is
heterogeneous then the elasticity of wages will be low that means labour is offered to work at low
rates and vice versa.

From the above discussion, we can conclude that the FoodByUs is providing an online homemade
food delivery to the people of Sydney and now it wants to expand to Melbourne also. Company is
providing a good quality homemade food items to the people and offering them a variety of food.
FoodByUs prefers to use the concept of customization in its activities. The market is quite
monopoly in its nature. Talking about its competitors, company is becoming the leader in its
industry as others like foodara are striving for this position. Prices of homemade food are fixed by
the labour. Labour has monopoly over the market as they can shift from one place to another where
they are getting the handsome amount. This type of company increases the employment
opportunities for those who love to make food and for those also who are unemployed and
searching for the job positions. These sharing economies make people independent.

References:
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