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Sharing Economy vol.2

Episode Summary

One of the key issues of Sharing economy is the disruption that new players have created—also the speed at which both government and traditional businesses have to adopt. Regulation, namely labor law, wasn’t really ready to face litigation, and traditional businesses didn’t believe in the speed of technology evolution and adoption. It took everyone by surprise. In this episode, we continue to talk about sharing economy, its social responsibilities, and the impact of its business model on our communities.

Episode Notes

The digital economy is referring to the way we perceive the work environment. On the one hand, we have people who get already used to the fact that almost all services can be pick up almost on demand. On the other hand, we have multimillion corporations who claim that the only product they offer is a platform that connects jobs with the demands on the market. But very rarely, we focus on the middle part, somebody who delivers service and is not necessarily treated as an employee.

Why is it an issue? In the USA, almost 57 million workers are included in sharing economy services. Some people work as an employee, but their legal status is self-employment. Therefore there don’t qualify for pensions, holidays, or sick days benefits.

It is a choice between almost no employee rights vs. easy access to the job landscape. 

1. There is no employee protection in the traditional meaning of these words. There is oversupply in the sector due to the low entry barrier. Therefore the wages are decreasing, and people need to work long hours to break even. It means high turnover, and if people come and go, there is no relation and commitment to the employee and clients. Moreover, almost all gig economy organizations are related to technology and IA, where the algorithm decides what your rating is at the end. People are afraid/stressed about their jobs, application dysconnectivity, or clients rating that does not necessarily evaluate them correctly. There is a system created that overtakes people's lives.
2. On the other hand, there is easy access to the job market, offering flexibility to the employees. For example, part-time working mothers or disable peoples. What is more, digital platforms have a lower operating cost due to a lack of physical attachment. 

In the end, it is all about the strategy the company will follow: "squishing staff as much as possible or invest in sustainability and healthy work environment.” Both strategies are tent to the profits, but one is more focused on the long term run than the other. Very often, these companies make losses YtY because collecting data is more important than profitability. But at the same time, most of the start-ups are founded by venture capital, so theoretically, people's plans should be one of the critical issues in the organization like Uber, Uber, Netflix, Spotify, Skillshare, Glovo, InPost, Scribd, Steam, BlaBlaCar or other. Without any hesitation, the gig economy significantly impacts society, but the sector itself is not sustainable.