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Work rules for the new economy

Uber is right: recognise independent platform workers

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In a new white paper presented to the European Commission, the ride-sharing platform Uber defended its business model ahead of new legislation on platform work.

“This standard (for platform work) needs to recognise the value of independent work and be grounded in principles drivers and couriers say are most important to them,” Uber CEO Dara Khosrowshahi said in a blog post.

In many EU member states, platforms such as Uber, Bolt, and Heetch have come under fire for how they structure the relationship between the platform and drivers. Contrary to a standard taxi firm, Uber does not employ drivers and thus is not responsible for various benefits that come with traditional employment.

This independent status gives drivers independence and flexibility, meaning they can clock in and out with no predefined working hours. The structure enables individuals to use these apps as supplementary income next to other employment opportunities and has created a ride-sharing experience that is more diverse, breaking up the licensing system that has burdened individual transport in Europe for decades. 

Especially now, we need functioning and smart laws that empower those who use the gig economy, not penalise them. This is especially true for low-income Europeans, who are more than likely to use these services to supplement their incomes or save money. Too often, regulators and politicians have folded to the demands of the legacy industries that once held monopolies over hospitality services, such as hotels, car rental agencies, and taxi firms.

According to Euractiv, "The Commission said it will first seek feedback on whether a law is needed to improve the working conditions of gig workers, followed by a second consultation on the content of the law.

“As part of the social partners’ consultation, the European Commission is considering issues, such as precarious working conditions, transparency and predictability of contractual arrangements, health and safety challenges and adequate access to social protection,” a spokeswoman said."

EU legislation on the matter is still a long wait, but forced harmonisation of the rules could be a serious blow to the diversity of the European market. So far, member states have been free to choose the model that works for them. In the Sharing Economy Index 2020, the Consumer Choice Center compared different cities in Europe, showing large disparities in how Europe approaches these innovative solutions.

Of course, the effects of the pandemic on the sharing economy cannot be overstated. The large sharing economy companies such as Airbnb, Uber and Lime are struggling with fewer people travelling and using their services. But that is not how we should measure the success of the gig economy.

The promise of the sharing economy has never been about gains on Wall Street, bold corporate executives or even profits for investors. It is not about a single company’s bottom line or its market share. Rather, it has always been about offering new and innovative options to empower people like you and me to improve our lives.

The sharing economy empowers both consumers and entrepreneurs to creatively and collaboratively use or lend resources they otherwise wouldn’t. That allows people to earn additional income as owners and save money as users.

Whether it is ridesharing, carsharing, home-sharing, the sharing of tools, or e-scooter rentals, the regulations on the sharing economy should not make them more difficult to use or from which to profit.

Some EU member states have found tangible compromises between the platform apps and regulators. But if we want more competition in the field of the sharing economy, we need to keep market entry barriers as low as possible. Sometimes, not regulating is better than trying to regulate in one way or the other.

Yaël Ossowski (@YaelOss) is deputy director of the Consumer Choice Center, a global consumer advocacy group.

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