Sharing economy should be fair for all, not free for all

03 Jun 2016, by Owen Tudor in Labour market

The European Commission’s statement on Thursday about what they call the ‘collaborative economy’, but which is better known as the ‘sharing economy’ or, more prosaically, ‘stuff like Uber and AirBnB’, was widely reported as telling governments and local authorities across Europe to leave disruptive, tech-based innovators alone. But it wasn’t just that.

The Commission’s statement was also a very welcome recognition that the free for all, buccaneering new industries won’t get everything they want. The Commission said yes to a free market – but no to an unregulated one. That’s an important signal of where the Commission is heading, and it’s important that they made this clear, not just for the forthcoming EU referendum, but for all those looking for a revitalised social model.

TUC General Secretary Frances O’Grady responded to the Commission announcement by saying:

“The sharing economy creates exciting new opportunities, but it has to be fair for all and not a free-for-all. Companies like Uber should not be allowed to dodge the responsibilities other employers have. Sharing economy companies cannot just take the money and run. They must provide decent working conditions for the people who create their profits. And they must pay their fair share of tax on profits and turnover.”

Our main concern is that Uber drivers should be treated as employees of the high-tech ride sharing company: something that unions like the GMB who are recruiting in the sector are arguing. The Commission said that European law laid down criteria which determined whether they were indeed employees, and therefore should have the rights that European and domestic laws lay down, such as health and safety, anti-discrimination laws and unfair dismissal rights. The criteria are “whether they act under the direction of the platform (i.e. the platform determines the choice of activity, remuneration and working conditions), the nature of the work (e.g. is it genuine, effective and regular), and whether the work is remunerated.” We reckon Uber drivers meet those criteria.

Frances added:

“The EU guidelines are a good starting point because they make clear that sharing economy companies can be recognised as employers by member states. The UK must build on this to ensure every worker in the sharing economy gets a fair deal, full employment rights, the opportunity to join a union, and is not exploited by a distant tax-dodging tech firm. By taking action to ensure member states are looking after the interests of people working in the sharing economy, the EU is showing the benefits of a Remain vote to working people.”

The reference to the referendum is a recognition that this sort of re-regulation of labour markets and the economy is a key feature of the reformed European Union that unions want to see. It’s a welcome indication that the regulatory reform agenda that the Prime Minister touted in his February grand deal won’t just be about *de*regulation.

There is more, of course, that we want to see from regulation of the new economy. As Frances hints, employers in the sector need to pay their taxes and social security contributions for their workers. And consumers will want to know that drivers and rooms are safe and properly insured.

Such requirements may, of course, make it difficult to undercut existing providers. But that’s what regulated markets imply: you can’t just undermine existing rights and protections and expect to get away with it.