A New Labour Ecosystem in the Sharing Economy: A Platform for Growth?

Abstract

The role of the traditional labour market is being challenged by globalisation and modern technology, particularly the unprecedented and generalised use of smartphones. Online platforms facilitating the on-demand economy are radically changing the prospects for the jobs of the future, which will be less regulated and more inclusive. This paper focuses on online ridesharing platforms, particularly Uber as international market leader, and their potential for combating social inequality and developing the transport industry. Online ridesharing platforms assign private drivers to rides booked and paid for by passengers through an app, using their credit card or PayPal account. The platform’s drivers work as freelance business owners or “moonlight” workers to top-up the income from their regular work. Among these ridesharing service providers are amateur riders who were unable to cope with the tight restrictions of a heavily regulated professional passenger transportation sector, high priced licences, inefficient work-life balance policies and lack of safety guarantees. These barriers to the professional passenger transportation services increase unemployment, and they increase the price of personal transportation for consumers by limiting the market. On-demand ridesharing platform services have been heavily criticised for infringements of workers’ rights. Such arguments are based on the traditional employer-employee relationship, which is being reshaped in these Web 2.0 times. Debate rages as to whether the right to statutory working hours and the right to a stable work site (among others) should still be enforced today. Supporters argue that if pension allowances and work injury benefits must still be granted, this may be done if such platforms are given space to thrive. It is argued that the conditions offered by platforms to drivers encourage entrepreneurship across all segments of society and foster the decentralisation of economic growth. On-demand ridesharing platforms adapt drivers’ income to the market, providing for prime time pricing to meet increased demand. By allowing a fully flexible schedule, they promote work-life balance, and by integrating technology they ensure a more efficient provision of services and a safer one too, with passenger registration, money-free rides and GPS locations an integral part of the operation. This paper stresses the potential of on-demand ridesharing platforms to combat social inequality. Drivers who are excluded from traditional systems due to restrictive language requirements, for example, can openly access these platforms in an intuitive way, often with no other requirements than a driving licence and a reliable car. On-demand ridesharing platforms also absorb certain groups that the labour market tends to resist, such as older workers, for whom ridesharing may top-up their pensions, as well as increase social participation and reduce isolation. On-demand ridesharing platforms have the potential to create economic growth, provided the regulatory burden is reduced. Active participation of citizens and stakeholders in the lawmaking process would ensure that these platforms are aligned with the Better Regulation agenda of the Commission and its strategic policies, while also helping to create conditions for such entrepreneurial operations to thrive.