The act of sharing implies equality such that people in lower income brackets can also benefit from this emerging shared model. However, it is said that the sharing economy mostly benefits those who are already doing well. Majority of lower income groups who rely on these sharing platforms for thei primary incomes would be most affected when economic times are tough. Jobs in the sharing economy are usually temporary, part time jobs (e.g. Uber drivers or food delivery riders). People are able to be contributors to more than one sharing company - an Uber driver can also be renting his house on Airbnb. As such, income levels may be difficult to verify when applying for mortgage, credit cards and other loans. Furthermore, since these jobs are likely to be contracted, people typically do not receive employment benefits such as health insurance or paid leave.
The issue is less of a concern for people who already have full time jobs outside of the shared economy. These people have a stable day job, and may turn to jobs in the shared economy for some extra cash. However, when people's primary jobs are within the shared economy, profit margins are squeezed, leaving them with little salary to enjoy a comfortable life.
With the increasing number of competition within the shared economy, companies are increasingly cutting costs and pushing profit margins lower such that they are able to offer consumers lower priced options compared to their competitors. Although consumers benefit from the lower price charged, workers in the shared economy are faced with constant cuts in their salaries.
British online food delivery company Deliveroo has been accused of exploiting their riders by altering the pay structure. The current £7 per hour and £1 per delivery is getting squeezed to a mere £3.75 per delivery with no base hourly rate. This means that Deliveroo is changing their structure to move from time wages to piecework. Riders are paid based on the amount of deliveries they do, rather than the amount of time they spend working. The change in structure caused massive uproar within the community, and riders went on strike against the threat of this new system replacing the current model.
These companies do not pay their workers any form of employment benefits on the grounds that these workers are "self-employed". Since they are independent contractors, the company is not obliged to provide them with benefits that regular employees get. By forcing the cost of doing business onto their workers, such companies get increasingly richer, while their workers remain stagnant and earn only the bare minimum.
In addition, many companies in the sharing economy are choosing to remain as private companies so that they can have maximum flexibility. By postponing their initial public offerings, these companies do not have to please their shareholders, they need not report their annual reports, nor do they require third party auditing. In the government's point of view, keeping a company private may not be ideal as this gives them room to tweak statistics, and even falsify records. By remaining private, this allows them to keep business plans to themselves such that no insider information is being leaked out to competitors, which can be a huge concern especially in technology sectors.
References:
No comments:
Post a Comment