It is inherent in our nature and human survival to be sociable and share our resources. Humans are “natural born sharers,” and children are known to share their resources unprompted and that inclination seeps naturally into our adulthoods. (Nicholas, 2016) “[Sharing is] the most universal form of human economic behaviour…probably been the most basic form of economic distribution in hominid societies for several hundred thousand years. (Price, 1975, p.3)
Children’s natural instincts to share: Psychology sharing experiment. (Brazelle, 2016)
What is the sharing economy?
The sharing economy is “built on using and sharing…products and services.” (Puschmann et al, 2016, p.93) It is utilising “peer-to-peer networks to gain temporary access to products and services on an as-needed basis.” (Redfearn, 2016, p.1023) The modern sharing economy business structure allows resources to be shared between “businesses-to-business (B2B),” “business-to-consumer (B2C)” and “consumer-to-consumer (C2C).” (Puschmann et al, 2016, p.93) The sharing economy allows businesses and platforms to act as online intermediaries to facilitate peer-to-peer exchanges of resources at lower costs. (Redfearn, 2016, p.1023) And platforms such as Uber and Airbnb are one of the many “mainstream” companies associated with the sharing economy.
Podcast on sharing economy (Upstream, 2016)
Although the shared economy structure has brought many benefits to the community such as reducing expenses for consumers, providing a supply of networks and connections, and creating convenience and employment opportunities. Uber, along with many other sharing economy enterprises are heavily criticised for its “unregulated and exploitative system” where employees and end-consumers are not properly guaranteed for their safety, rights and protection. (Nicholas, 2016, p.1) Thus, the thesis of this essay is; that although sharing economies accommodate many opportunities for both consumers and providers, it causes concern for the long-term well-being of the community with its withstanding ethical issues surrounding labour practices and weak systemic regulatory measures. This is further explored in the case of the transportation service company, Uber.
Labour practices in Uber’s sharing economy
A main criticism of the sharing economy is that its structure does not guarantee employment protection for its workers. The growth of the sharing economy is seen by some as an expansion of “precarious employment” and the “transfer of risk to workers.”(Sprague, 2015, p.56) Uber workers are not guaranteed stability, consistent incomes, or job security as they in essence, are deemed as “freelancers,” or “micro-entrepreneurs” that “monetise” off of their “spare time” and “underutilised assets.”(Sprague, 2015, p.54) Thus, commentators “express concern about the lack of consumer protection in the sharing economy” where “company intermediaries…shift the risk of income instability onto their workers” by “misclassifying” the nature of their workers’ employment. (Sprague, 2015, p.57) Uber drivers are largely classified as “self-employed” “contractors” which means that they are denied the law-bonded protection and security that would be given to the traditional employee. Uber’s labour practices have been heavily criticised as workers are given minimal pay, minimal security, “short term, casual” and inconsistent shifts that put workers in a position where they have to work long hours to sustain a living. And “when earnings were barely sufficient to sustain existence…(Uber’s business model puts workers) in periods of ceaseless toil.” (Lawrence, 2016, para.3) This monetary stress on Uber workers poses a threat to both the health and wellbeing of the Uber drivers, as well as the general public that would be using the taxi service.
(Dale, 2016) Uber
A counter to the criticism on the low pay and inconsistent hours for workers in the sharing economy industry is that the sharing economy is argued to provide “freedom and flexibility” for people who want to start a business, sell products, and offer services. (Compass Offices, 2021) It is argued that the sharing economy and companies like Uber, provide platforms for people to further monetise their resources and time that otherwise would not be possible with the traditional job market where commitment is key. The sharing economy and the peer-to-peer model can be beneficial for the larger scope of the society where on one end, shared resources can dramatically decrease consumer expenditure and on the other, drivers have the capacity to choose when they work and who they work with without the obligation of long-term commitment to the company.
Regulation in Uber’s sharing economy
The issue of minimal regulation within the sharing economy and especially within Uber has also been a major concern that has been facing heavy criticism from the public since the popularisation of the business model. There is concern surrounding the lack of thorough regulation implemented within the platforms that ensure the overall consumer safety and privacy and also the well-being of the workers. It is critical for the general welfare of the social environment in which these large sharing economies operate, that protections and policies are in place to monitor these peer-to-peer exchanges. This can then help ensure professional and issueless transactions between both parties of the providers and consumers. Some key policies that need to be implemented include a need for further policies that ensure drivers implement safe driving strategies, have safe conduct, ensure privacy for passengers, and provide safe unfaulty vehicles etc. The current regulations within Sydney’s Uber service are linked in this hyperlink; Uber Sydney vehicle requirements and Uber driver requirements.
Although there are minimum requirements for Uber drivers and their cars, the regulations in place are susceptible to loopholes such as issues relating to consumer privacy and ensuring safe driving conduct. The peer-to-peer structure of the business requires heavy “self-regulation” which is a “reallocation of regulatory responsibility” to the drivers and passengers, where theoretically there should be further regulatory intervention from the government and business. (Cohen et al, 2015, p.116)
Uber’s approach to ride sharing and regulation. (Bloomsberg Technology 2017)
A counter to the criticism of minimal regulation within sharing economy platforms like Uber would again be that these platforms provide flexibility, new opportunities, and a network that provides more convenience for both parties of the provider and consumer. Although there are implications to workers’ payment levels, level of professionalism and regulations in the sharing economy. Uber along with many other sharing platforms are “praised” for “its contribution to promoting sustainable (social) development.” (Cheng et al., 2021, p.636) Sharing economy business models like Uber play an important role in decreasing economic pressure for consumers as the capacity for people to share resources offers cheaper options for services and products. Owners of these resources also have the opportunity to monetise off them and attain further income without having the concern of obtaining qualifications they otherwise may not have (e.g., a taxi licence for Uber driving services.) Stricter regulations for Uber drivers may mean costly training and licensing fees that are acquired at the expense of time and money. And this will raise the entry bar for people seeking to explore work as an employee such as an Uber driver. This will then subsequently raise the pricing of the services and products provided by the sharing economy which will defeat the primary benefit of the business model of seeking to reduce pressures of cost and increasing efficiency for all participating parties of the sharing transaction.
To conclude, the sharing economy provides many benefits to the community such as reducing expenses for consumers and providing convenience and income opportunities. However, there has always been underlying concern for the long-term well-being and sustainability of the sharing economy model, especially considering its issues surrounding unfair labour practices and weak regulatory measures within the businesses. It is important to understand both the benefits and downfalls of the sharing economy business structure as these industries will progress to expand along with the technological advancement of the modern world and the digitalisation of consumption. (Mont et al., 2020) Sharing economy businesses like Uber and companies such as Airbnb and TaskRabbit are growing their dominance in their respective industries as a cheaper and more efficient alternative consumption model compared to the traditional. (Szymanska, 2021) And thus insights into its regulatory and labour practice can help us weigh our interactions with sharing economy businesses as these business models sink and entwine with our modern economy.
Graph of the growth of Uber’s valuation in comparison to other car-related businesses from 2010-2015. (Forbes Factset, 2016)
Bloomberg Technology.(2017) Uber’s approach to Ride-Sharing and Regulation. YouTube.
Brazelle, B. (2014). Psychology Sharing Experiment. [Video]. YouTube.
Business and Human Rights Resource Centre. Uber logo.[Image]. Business and Human Rights Resource Centre. https://www.business-humanrights.org/en/latest-news/new-zealand-court-sides-with-uber-drivers-in-ruling-calling-drivers-employees/
Cheng, X., Mou, J., Yan, X. (2021) Sharing economy enabled digital platforms for development. Information Technology for Development, 27(4), 635-644.https://doi.org/10.1080/02681102.2021.1971831
Cohen, M.E., & Sundararajan, A. (2015) Self-Regulation and Innovation in the Peer-to Peer Sharing Economy. University of Chicago Law Review Online, 82(1), 116-133.
Compass Offices. (2021, March 29). Benefits & Opportunities of Sharing Economy for Business.https://www.compassoffices.com/en/about-us/blogs/benefits-opportunities-sharing-economy-business/#:~:text=It%20gives%20more%20freedom%20and,that%20it%20is%20sustainability%2Dbased
Forbes FactSet. (2016). Uber, Ford and General Motors growth in valuation. [image]. Brugal. https://www.bruegel.org/blog-post/uber-and-economic-impact-sharing-economy-platforms
Lawrence, F. (2016, December 10). Uber is treating its drivers as sweated labour, says report. The Guardian. https://www.theguardian.com/technology/2016/dec/09/uber-drivers-report-sweated-labour-minimum-wage#:~:text=Uber%20treats%20its%20drivers%20as,testimony%20of%20dozens%20of%20drivers
Mont, O., Palgan, Y. V., Bradley, K., & Zvolska, L. (2020) A decade of the sharing economy: Concepts, users, business and governance perspectives. Journal of Cleaner Production, 269(122215), 1-9.https://doi.org/10.1016/j.jclepro.2020.122215.
Dale, L. (2016).Uber [Image]. The Guardian.https://www.theguardian.com/technology/2016/dec/09/uber-drivers-report-sweated-labour-minimum-wage#:~:text=Uber%20treats%20its%20drivers%20as,testimony%20of%20dozens%20of%20drivers=
Nicholas, J.A., (2016). Sharing Economies. The age of sharing (pp. lvii-lxxvii). Polity
Price, J. A. (1975). Sharing: The Integration of Intimate Economies. Anthropologica, 17(1), 3–27. https://doi.org/10.2307/25604933
Puschmann, T., & Alt, R. (2016). Sharing Economy. Business & Information Systems Engineering, 58(1), 93-99. https://doi.org/10.1007/s12599-015-0420-2
Redfearn, R.L. (2016). Sharing Economy Misclassification Employees and Independent Contractors in Transportation Network Companies. Berkeley Technology Law Journal, 31(2), 1023-1056.
Sprague, R. (2015). Worker (Mis)Classification in the Sharing Economy: Trying to Fit Square Pegs into Round Holes. ABA Journal of Labor & Employment Law, 31(1), 53–76. https://www.jstor.org/stable/26410781
Szekely, B. (2022, August 14). Uber driver and car requirements in Sydney, NSW. https://www.splend.com.au/blog/uber-sydney/#:~:text=Have%20a%20full%20NSW%20driver’s,Uber%20licence%20requirements%20in%20Sydney
Szymanska, A.I. (2021). The Importance of the Sharing Economy in Improving the Quality of Life and Social Integration of Local Communities on the Example of Virtual Groups. Land, 10(7), 1-17, https://doi.org/10.3390/land10070754
Upstream. (2016). The sharing economy? (15 minute shortened version).[Audio podcast]. Spotify. https://open.spotify.com/episode/5O1zV0WjLGcMUilXqxItwb
Uber. (2023) Sydney Vehicle Requirements. https://www.uber.com/au/en/drive/sydney/vehicle-requirements/