Once a week, Arne Lasance and Jeroen van den Oever, serial entrepreneurs and investigative geeks, review the week’s news, offering analysis about the most important developments in the world of startups.
Arne: Ola Jeroen! I am back from a week in my little paradise in ‘el pulmon de Valencia’. It’s amazing to see the sun rise over the mountains and relax in my pool. Even my Spanish is getting up to speed. I love the gig economy, don’t you? I now can work whenever and wherever I like, as long as there is an internet connection. Paradise for some, hell for others.
Jeroen: How do you mean?
Arne: Did you notice that France now, since January 1st 2017,has a law, that gives employees the right to ignore email and other communications from the boss, beyond their 35-hour working week? Companies (those with over 50 employees) have to negotiate specific time spans during which their staff has to be available, and they can’t punish you for refusing to look at your messages beyond set hours. So 24/7 is a thing of the past, there. Not for us, self-employed giggers of course. We may be the ones that will be asked for a spreadsheet update while we’re eating dinner with the wife & kids for the first time that week.
Jeroen: Well, at least French employees no longer have to fear for what the Japanese call ‘karoshi”, suicide due to work-related mental stress. Or any other death, due to cardiovascular failure clearly linked to overwork.
Arne: It all goes to show that both the sharing economy and the equally disruptive gig economy are posing real problems I guess. ‘Old’ paradigms are failing and falling, or struggling to keep themselves alive. Did you read about the Uber case in te UK? Where the judges granted a few Uber drivers the status of employee, instead of self employed mobility services provider? And that Uber drivers should receive a minimum wage and vacation pay?
Jeroen: Uber, and Airbnb as well, are facing legal problems on several fronts, where the old rules collide with the new reality. Some American states have taken legal action to question whether Uber’s drivers are independent or should be offered workers’ rights as employees. Last month, New York State regulators ruled that two former Uber drivers were eligible for unemployment payments.
Arne: Yes, often Airbnb rentals fall foul of local housing laws and regulations. New York owners or tenants cannot legally rent out their apartments for short periods, unless they are actually living in the property. Then there are the eternal tax issues of course. And insurance – the insurance sector is very old fashioned, in some senses.
Jeroen: Yes, several European judges questioned Uber about who should be held responsible if a passenger was hurt. Or what the airbnb host’s responsibilities and rights are. Switzerland demands a special driver permit, to be allowed to drive a taxi. In reaction tot his clever Uber drivers now let clients sit on the front seat to try and fool the police.
Arne: Well, the harder the old structures fight… Research by EY shows, or states, that the number of ‘giggers’ or self-employed will keep rising. 50% of all organizations report an increase in their use of so-called ‘contingent workers’ over the last five years. The contingent workforce in the US has grown 66% in the past 10 years.
Jeroen: Of course, after losing their job during the 2008 crisis many workers opted for contingent work, first as an interim and later as a more permanent solution. Behavioral, regulatory and policy shifts, and changes in expectations, meant that both workers and organizations adjusted to and embraced the flexibility that contingent work arrangements provided. And of course, luckily internet-technology served to facilitate a more seamless interaction between employer and employee.
Arne: Luckily? The gig ecenomy bids down wages. It makes working lives episodic. Gig work does not come with pensions, sick pay, holiday entitlement or parental leave. Mortgage companies wont’ lend to people with insecure work. It shifts risks from employer to theworker, also a source of growing stress and mental ill health. Gigs are one-to-one relationships between the contractor and the contractee – easy to abuse and hard to monitor.
Jeroen: But for people like you and me, with scarce talents and competencies, the gig economy presents opportunities. It also does for (some) students, it offers older workers and adults with childcare responsibilities an alternative to full time employment. More than one Airbnb-host can only pay his or her exorbitantly high rent by letting strangers enjoy their apartment one or two weekends per month.
And of course, there would be no gig economy without the consumers,who relish its convenience, cheapness and flexibility. I doubt there is a reader of this column who has not helped it along with on-demand buying or a cheap alternative for a hotel room.
Arne: Okay – but for the mass of workers the gig economy is not that great news, especially as it increasingly forces mainstream employers to compete on the same terms. Hence the French law we mentioned earlier.
Jeroen: Now who is the pessimist? Economists have calculated that the social value that Uber creates in the US is at least $6,8 billion per year. For every dollar we pay Uber, we receive USD 1,60 in value, they conclude! That’s why Pittsburgh loves Uber! How much would be lost, if Uber simply went away?
Arne: One of these days I may check out the possibilities of Airbnb to make some extra money out of my Spanish property…