Over the past few years, the world has started going through a new economic revolution, disrupting the economy, businesses, labour markets and our daily lives in a way not seen since the industrial revolution. Driven by technological innovations and increased online connectivity, the role of digital labour market matching is rising. At the heart of this change is the rise of the platform economy. COVID has only accelerated this revolution.
Due to the lockdown measures, most activities have moved online, this proving to be a lifesaver for some, especially in the restaurant business. The pandemic has led to an increase in the use of online services and an increase in the breadth of users, including those who were not using such services before. As the COVID-19 crisis is lasting, the shifts in consumer behaviour may last as well. Closure of shops and travel restrictions have impacted many sectors of the economy. Businesses in the tourism, hospitality, transportation, and event-focused sectors have experienced the hardest economic shocks, while retailers had to turn to ecommerce to pursue their activities by plugging into online platforms and the associated ecosystem including last-mile delivery. It is here that the platform economy has proven to be instrumental for a number of agents. In the case of food delivery platforms, these fulfilled several differing needs by different economic agents. Sellers that needed last-mile delivery; buyers that wanted to enjoy the variety of meals from the comfort of their home and workers that wanted to work within their flexible parameters. It may be argued that digital platforms have improved the lives of consumers, by enhancing the quality, cost and accessibility of services
While the gig economy has been talked about for years, the rise of the economy through digital platforms is relatively new. As the platform economy evolves, there are both new opportunities as well as new challenges that arise with heightened complexity. The current debate on the working conditions of couriers and the recently issued guidelines issued by the DIER are a case in point.
However, let’s start from the basics.
What is the platform economy?
The platform economy is a complex phenomenon that is significantly disrupting the general concept of what is referred to as normal jobs. It is any type of digital platform that uses the internet to connect dispersed networks of individuals to facilitate digital interactions between people. Within the platform economy there is a triangular relationship between three parties; the platform; the worker and the customer or customers as in the case of food delivery the customers are both the restaurant owners and the end-user. It is the job of the platform to connect people with demand, the customer/s, to people that provide supply, the worker.
Traditional linear business models create value through creating products and services that are sold to a customer. Platform based business models on the other hand, create their value by connecting users, both consumers and producers, on an online network. The platform does not own the means of production, but rather creates the means of connection. The strength of the platform economy lies in its ability to eliminate trade barriers by using increased information sharing between different players. This creates a much more open economic system, with much greater participation of its users. And this where the concept of equity comes in.
Is there hope for an equitable platform economy?
As with many other technological change and disruption, the platform economy forces us to re-evaluate laws and regulations. There needs to be some sort of regulatory catch-up in terms of laws and regulations and ultimately in enforcement.
Unfortunately, we often talk about platform workers as one big cohort. There is huge diversity in the type of platform workers. One can differentiate between three main cohorts of workers; first, the primarily dependent worker who fully relies on the earnings of the platform; the partially dependent worker who uses the platform as a part-time job; and the supplemental worker who uses the platform to create supplemental earnings. In addition, the platform economy has also been a very inclusive employment market giving people the ability of finding flexibility that suits their lifestyle or commitments.
Given the surge in demand from end-users for delivery services, businesses providing couriers to platform operators have been established. It is here that platform companies do not have visibility of the conditions that these couriers are being subject to. It is also here that the true challenge exists, and it is where codes of conduct and charters, together with a renewed regulatory framework are needed which will then be followed by enforcement. Given the complexities it might also be time to discuss a new employment category that seeks to protect workers whilst still supporting the inherent flexibility of platform workers.
Done right, we can shape a fair future of work. The platform economy is here to stay. It is important for stakeholders to come together and find the best route forward to bring an equitable platform economy for the benefit of all parties.
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