New report lifts the lid on the sharing economy

sharing-economyThe chances are even the least observant of you will have encountered the sharing economy in the past few years.  You may well have not appreciated the scale of this informal gig economy however.

A recent report sets out to lift the lid on this burgeoning movement, revealing that approximately five million people in the UK might be working via platforms such as TaskRabbit and Uber.

Inside the sharing economy

The report, which was conducted by the University of Hertfordshire on behalf of the Foundation for European Progressive Studies (FEPS) and UNI Europa found that a surprisingly large number of people participated in the sharing economy as workers and consumers.

This scale promoted the authors to question whether now isn’t the time for this economy to be taken seriously, and for things such as workers’ rights, taxation and consumer protection to be considered.

“The sheer size of this new crowd-working army is surprising even to me and our findings confirm that policymakers and academic researchers have been caught on the hop by the explosion of what we might call platform labour,” the authors say.

“There is a real risk that the proliferation of online labour platforms will lead to an erosion of labour standards and employment rights, and hit tax revenues,” they continue.  “It has been labeled the ‘sharing economy’ but many of those participating in it are doing so, not for altruistic reasons or in their spare time, but are instead relying on it to earn a living.”

Cost benefit analysis

The report reveals that whilst there are undoubtedly a large number of new opportunities opened up by new sharing economy platforms, for both customers and workers, there are also considerable risks, whether in terms of driving down the cost of labor or providing insecure working conditions without the safety net features common with most other jobs.

The analysis revealed that around 90% of the crowd workers were doing desk based work via the likes of Upwork and Peopleperhour, although others were also getting out and doing work externally via sites such as Taskrabbit and Handy, whilst a reasonable number were also drivers on Uber et al.

“A new kind of working life is emerging,” the researchers say. “For many it is a life in which they do not know from one week, day or even hour to the next when or whether they will have work, so they keep their smartphone always to hand, ready to hit ‘accept’ at a moment’s notice. They are, in short, permanently logged on.”

It goes on to suggest that the crowd-working sector is only likely to expand and cover a growing proportion of the workforce, with a polarization of the workforce occurring and a subsequent decline in middle-income work as people compete against others from around the world.

Risks to governments

The report also highlighted the present and potential risks to governments across Europe, and in particular to their finances, as many sharing economy workers don’t pay taxes or social security on their work.

There are wider economic risks to consider too. Elva Bova, Senior Economist of the Foundation for European Progressive Studies, said: “Our politicians, starting within the European Union, need to start thinking very seriously about whether existing labour regulations and benefits systems are fit for purpose in this fast-moving, unstable and unpredictable work environment. There are many questions to answer”.

These questions include:

  • how do states ensure crowd workers have access to the same basic employment rights as those in employment?
  • how do welfare systems adapt to such an unpredictable environment?
  • do regulations need to be relaxed to allow crowd workers to form ‘unions’ to champion their rights?
  • what is the legal status of companies that crowdsource labor?
  • is the existing legislation strong enough to provide consumer protection in such markets?
  • what are the health and safety implications of the new platforms, in both physical and mental terms

As the marketplaces grow and grow, it will be interesting to see just how governments respond to them.


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