HOW IT WORKS: for buyers
On this page we illustrate how NEMs might work using the market for babysitting. We’ve deliberately chosen such a sensitive example. No market can ever be 100% problem free, but NEMs can make hiring a babysitter safer than any existing way of doing so. Market operators will set steep hurdles to be crossed just to start selling. Once you’re in, the monitoring is constant.
For this illustration, imagine it’s Saturday lunchtime, you need to go out this afternoon. You want someone to mind your children in your home to start in an hour and carry on until 6.00pm. You’ve registered with your country’s NEMs system. What do you do?
1) Enter your requirements
Call up the NEMs website. Log-on. Select the childcare market, click “babysitting at my home”. It now wants to know the times you have in mind. Fill in those boxes then click “Next”.
2) Choose your seller
Immediately the system displays 22 local individuals who want that booking. Each person has said they’re available this afternoon, contactable in time and have personal terms, about their travel area for example, that align with your need.
The market can ensure quality of candidates in several ways:
- Sellers in childcare may need to have police and Education Authority clearance (at their expense). After the vetting, these bodies issue an authentication code which can be entered into NEMs, this is part of the system’s arrangement with government.
- NEMs’ operators may have set a rule that anyone selling in the babysitting market must have completed at least 50 complaint free bookings for at least 20 households in the Parents Help market. That is supervised childcare with a parent remaining in the home.
- As in all NEMs markets, sellers work their way up through grades as they work for more and more buyers. This is subject to a minimal level of complaints through the system. (Disgruntled buyers have every incentive to initiate a complaint in NEMs: their fee is held until successful completion so they can get it back.) The highest grade sellers have worked for dozens of families with no problems, but they will know they can charge a premium price.
The rate at which each person will do this particular job has been calculated. The cost to you in each case is based on how far each sitter would have to travel, how much notice they’re getting for this booking, the length of booking and your track record as a buyer in this market. The calculation uses their personal rules to arrive at a rate. You see the potential sitters in price order within each grade.
The buyer can click for further information on any person on this screen
3) Accept contract
Tell the system you wish to book this sitter and a contract appears between the two of you for your online authentication. The text is standard, ensuring protection for both sides. You don’t need to read it.
Enter your password to accept this and the system will deduct the price from whatever account you allow it to access. (Extra payments can be added through a timesheet if, for example, the two of you agree to extend the booking.) That electronic cash is held until 48 hours after the job is due to be completed. Assuming no complaint is filed in that time it will then release the money, minus its own fractional commission, to the sitter’s account.
The other end
Across town the sitter, who has specifically said she
is available for work this afternoon and will take local jobs on short notice
gets a text message and on-screen notification of her assignment.
She
has to confirm quickly for such a short notice booking. If she doesn’t do so in
the ten minutes allowed, the system
will re-assign the job, picking up the difference in price, and put a
mark on her record. Too many of those and she’ll be back down the market
levels.
The
possibility of this penalty might be uncomfortable for her. She is at a high
level of the market, choosing to sell at short notice. Her earning power should
be well above basic babysitting rates. If she doesn’t like fast response times,
she should specify she needs maybe 6 hours, or longer, minimum notice of a
booking, in which case she wouldn’t have appeared on your screen earlier. NEMs
doesn’t force anyone to do anything but it does constantly check that sellers do
what they said they would.
Speed of transactions
Booking the sitter above would take seconds and require minimal mindshare. Sellers have to meet all legal qualifications to enter the market, if you’re willing to pay the premium demanded by upper grade sellers you would know you were getting someone with a long track record of successful sitting in multiple households with every incentive to maintain that record for your booking. If they start being unreliable they go back down the market levels and no longer command a premium.
Transaction costs for this purchase were next to nothing. Overheads currently associated with these low level trades such as market research, marketing, taking of bookings, checking potential buyers and payment collection are history for NEMs users. The system will even calculate and pay your tax if you wish. Crucially, every user knows they are paying, or earning, a market rate because this highly efficient market is completely transparent to anyone who meets the requirements for offering childcare.
The above has been just one, very simple, transaction within a National E-Markets system.
