‘Sharing economy’ workers need safeguards too
—The ‘sharing economy’, although not yet clearly established, describes a type of business built on the platform of sharing of resources – allowing customers to access goods and services without ownership. There can be negative consequences to this, however, and this is why calls have been growing for the development of a legislative initiative from the European Union to help grow the sharing economy.
Two examples of companies that have experienced quick growth in popularity include Uber and Airbnb. The development of new information and communications technologies which allow ‘user consumers’ to make contact and transact easily with ‘user providers’ has aided their growth. The lower cost of the services they provide is particularly attractive to young people and many on low wages who now find they can afford that cab ride home after a night out.
The employment standards and wages of workers in this area have also been a cause for concern. There have been claims that, once costs have been taken into account such as petrol, insurance and the 20 per cent cut that Uber takes, drivers can earn below the minimum wage on a standard 35-hour working week. The GMB trade union claims that drivers have been suspended or deactivated after making complaints about treatment without being given opportunities to challenge them. Forty Uber cars were recently suspended in New South Wales as they did not pay licence and registration fees and because assurances could not be given that Uber drivers were properly licensed and insured to carry passengers. London black cab drivers have staged protests, calling on Transport for London to issue tighter regulations such as a minimum five-minute wait time and a ban on displaying availability in the app. Paris currently has a 15-minute wait time and has banned the use of UberPop, its low-cost service. Uber has stated that these new rules will be bureaucratic and not improve the customer experience and claims that deregulation across the whole of the taxi trade is the answer. Last month, Uber won a victory after the High Court ruled that the app does not function as a taxi meter and is therefore legal.
The lack of regulation can pose problems when things go wrong, however. If an Uber taxi is booked and does not turn up a customer can still be charged the minimum fare of £5. If a fraudster places a fake advertisement for an apartment on Airbnb and encourages a user to pay for this directly to their bank account, who is liable? When I paid £950 to what I thought was an Airbnb holding account which turned out to be fake, Airbnb told me they had no liability to refund my money as I was dealing with a private individual. This can be frustrating as customers use their platforms on a basis of trust.
Stronger regulation is needed, but a balance should be struck so as not to stifle economic innovation. Suitable measures to tackle the challenges that the growth of the sector brings as well as defining a progressive vision will need a pan-European approach. As the EU referendum beckons, we should argue for the EU to support and encourage the development of sharing economy initiatives that produce positive social, economic and environmental impacts. If the working conditions of sharing economy actors are framed within the EU in the same way as those of an employee, then they should receive the appropriate treatment with social and economic safeguards to avoid a race to the bottom.
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Sanchia Alasia is a former candidate for the European parliament