Future of the Global Workplace: The Growth of the Sharing Economy
By Gareth Jarman, Director, HR Advisory, Radius
Today’s technology has brought us the so-called “sharing economy,” and it is growing by leaps and bounds, not only in the West but around the world.
Exemplified by sites like Uber and Airbnb, the sharing economy connects people or companies that need services with others willing to provide them. Services range vastly in price and quality, from sites like Fiverr — where providers will design a logo, write a blog post or translate an article for as little as $5 — to those who charge much heftier fees for coding, giving legal advice or sharing a private jet.
The sharing economy can be global, connecting companies in the US with IT workers in India or German tourists with a guest house in Prague. Other times, as with ridesharing or food delivery services, it is restricted to a locale.
Simple in concept, the sharing economy is also disruptive and has the potential to change the nature of work and careers. Here’s an overview of trends to look out for in two important global economic regions, Europe and Asia.
Conflict in Europe
The new economic model has stirred up controversy everywhere but perhaps in no place more than Europe, where worker protection has traditionally been strong.
Part of the appeal of the share system is lower labour costs, enabled in part by workers’ status as contract labourers. Contract workers are responsible for covering their own retirement, sick leave and other benefits, making them less expensive for employers, who also appreciate the flexibility of hiring on demand without having to continue the relationship.
In the UK recently, there has been considerable negative press and controversy around the use of “zero-hour” contracts. Under these agreements, employees are called in, often at short notice, to undertake work, and the employer holds no ongoing obligations to provide any additional work. Zero-hour contracts are prevalent in certain sectors — such as agriculture, healthcare and catering — where employers must find cost-effective, flexible ways to manage “blips” in demand.
Given the possible drawbacks for employees, zero-hour contracts have caused much debate over how much employers should rely on their use. On the one hand, zero-hour contracts provide workers with applicable employee benefits under UK law. The contracts also give workers a measure of flexibility and lifestyle control, similar to typical contract work (although the employee does agree to be available on short notice). On the other hand, workers are denied a steady, predictable means of income. In the end, zero-hour contracts represent a noncommittal approach to employment that potentially undermines longstanding social practices promoting worker equity.
Traditional contractor work and zero-hour contract work hit a sore spot in Europe, where workers’ rights are enshrined yet unemployment is high, as many employers are reluctant to hire permanent staff because of the broad and expensive protections their laws require.
Some employees with permanent jobs see share workers as unwelcome competition. Paris taxi drivers rioted to protest Uber, whose cheapest service, UberPop, is now banned in France, Belgium and Germany.
Despite the anti-Uber sentiment, it would be a mistake to dismiss the appeal of the shared economy in Europe. Many there argue that it offers flexibility to workers and a good deal to consumers. UberPop had 160,000 customers — and 10,000 French drivers — at the time it was banned.
France also started Cookening (now a part of global VizEat), a site that allows cooks to invite strangers into their homes to share a meal — for a fee, of course. This in a country that takes restaurants and the industry surrounding them very seriously.
Online connectors for finance and staffing have popped up in Europe, too.
In the UK, 25% of the population participated in the collaborative economy over the past year. The top purchase categories were clothes and accessories, media and household goods. Frankly, I’m surprised that number isn’t even higher. How many of us have sold our children’s outgrown baby items, or offered items to other parents seeking goods, at the click of a button? When I lived in the UAE a couple of years ago, Dubai’s awesome trading/selling website “Dubizzle” enabled me to source some smart crutches at short notice when I damaged my knee. In the smaller connected world of the internet, a generous Jordanian expat kindly sold me his spare set at a fraction of the cost of crutches for sale at a private hospital! From my experience, Dubizzle was a microcosm of the expat world, where we all gathered to help each other, buy and sell goods, and share information. We traded, but with a very human side and with the sense that we were “all expats together.”
The Netherlands — even though it not only outlawed Uber but raided the company's offices and launched a criminal investigation — also has a thriving collaborative economy, such as this site for sharing heavy equipment to lower costs and suit company demand. The government is rethinking its laws to become “technology neutral” and reap some of the benefits of innovation.
The UK government this year issued a nonbinding "non-paper" calling for a “measured approach” that recognizes the reality of an internet-enabled economy and doesn’t overly restrict it, while “looking carefully” at terms, benefits and conditions.
Europe seems to be hedging its bets on the sharing economy, coming down hard on foreign entrants like Uber while tacitly encouraging homegrown startups as authorities try to lower unemployment and encourage taxable profits. The balance is a difficult one, especially when considering how best to incorporate worker protections into the sharing economy.
Embrace (Mostly) in Asia
Collaborative economies have also taken hold in Asia, where mobile technology and the apps that go along with it are widely accepted, having developed in many cases before a traditional communications infrastructure evolved.
In 2012, the Korean government declared Seoul to be the "sharing city" of the future. BnB Hero, the country’s version of Airbnb, has caught on, despite its founders’ initial worry that Asians wouldn’t take to letting strangers use their homes.
China has a similar service, and Malaysia and Thailand have a site like VizEat that offers visitors an authentic local dining experience in hosts’ homes. Malaysia, known for its poor taxi service, now has an app service designed to improve it.
In Singapore, six companies recently started a sharing economy association, which will engage with local authorities to overcome regulatory challenges. The country already has its own ridesharing and accommodations sharing services.
The Philippines also has a ridesharing service, as well as a Craigslist-type site that lets individuals sell goods and services.
Surprisingly, considering its embrace of technology and preponderance of tech workers, India remains wary of the sharing economy. “In Indian culture, people would ask: What happens to the resource? With whom am I using the space? Are they of a similar background?” a professor told India’s The Economic Times.
Nevertheless, Uber and BlaBlaCar have made impressive inroads, and though there is little native investment in share sites, the country has its own taxi app.