The Sharing Economy: The Future of Contracting?

Sharing Economy

Between bitter leadership contests, attempted coups, police shootings, and a series of appalling terrorist attacks it’s no surprise that some things get lost in the news cycle of today. As such, you could be forgiven for missing the current upheaval surrounding the so-called ‘Sharing Economy’ and the brewing media-storm around the rights of those who choose to work within its borders.

The UK’s ever-expanding temporary workforce is no stranger to changes in legislation designed to keep the divide between employee and freelancer clearly demarcated, with IR35 in a seemingly constant state of flux and debate, and Travel and Subsistence regulation experiencing some severe clampdowns in the last Budget statement. Current media coverage would have you believe that the Sharing Economy, although nascent and embryonic, is the next big threat with its tech overlords mercilessly exploiting the average man on the street to the tune of billions of dollars. But is that really the case?

Since the global economic crisis struck, more and more people have chosen to work for themselves. Following the economic fallout resulting from our decision to exit the EU, many more may now have to. Even though we’re now six years clear of the recession, and with the unemployment figure having fallen to 5%, the number of self-employed workers is 700,000 higher than it was in 2008. As John Arlidge recently wrote in the Sunday Times: “No other member of the G7 group of the world’s richest nations has so many freelancers as a proportion of the total workforce.”

Many of the biggest names in this burgeoning industry go out of their way to make it clear they are simply service providers rather than actual employers – middlemen sourcing freelance workers to carry out tasks. On paper, this is great for all involved: it’s flexible, it’s easy, people can work when they want, and how they want. Fancy getting a haircut between Uber pick-ups? No problem! Semi-retired and looking for a little extra money? Why not deliver some parcels using your own car?

Except, it’s not quite that simple. By taking on workers as freelancers, the likes of Uber, Deliveroo, TaskRabbit, and Handy get all of the benefits of having a workforce with very few of the obligations a traditional employer would have. If you’re working in the Sharing Economy, it’s highly unlikely you’ll have sick pay or a holiday allowance. You are responsible for your overheads, and your take-home wages will be reflected in the amount of hours you choose to put in. You’ll be your own boss in many ways, but will still be expected to adhere to rules, regulations, and company best practice.

However, many contractors reading this article and looking at that supposedly Draconian list are likely to simply shrug their shoulders and ask what all the fuss is about. For years the self-employed have been working for themselves – choosing when, how, and where they want to work. Driving for Uber or delivering food for Deliveroo is a chance to experience true flexibility, a chance to exist and work on your own terms. If you no longer want to feed from the corporate trough, to exit full-time wage slavery and work for yourself when you want, then the opportunity is there. Travis Kalanick, the co-founder of Uber, noted recently: “They can push a button and get to work. They can also push a button and stop working.”

The brilliant thing about the Sharing Economy is its innate freedom. There are few barriers to entry beyond your own commitment. The emergence of a new app-based frontier has also led to an environment more safety-focused than ever before, with ratings and feedback the new ground zero for success – the dawn of “data Darwinism”, to borrow Arlidge’s phrase.

Arun Sundararajan, a professor at New York University’s Stern School of Business and author of The Sharing Economy, published in June, was quoted in Arlidge’s Sunday Times piece. These new firms, he notes, “are fundamentally empowering because they move the role of the individual from ‘provider of labour’, as it has been for centuries, to individual ‘owner’ of the means of production. People use their own assets, a spare room or car, and their time to become micro-businesses.”

It is a natural evolution into a more competitive and malleable future, a necessary swing of the pendulum from a buttoned-up, parochial working environment to one dictated by and for the people. Industries that previously seemed impenetrable are no longer able to monopolise their chosen spheres, and workers have more flexibility than ever before. It is the next big step forward for a populace reliant on having exactly what it needs and wants at the touch of a fingertip. As Nathan Blecharczyk, co-founder of Airbnb, noted recently: “In a time of slow wage growth [sharing economy outfits] benefit society by providing fresh options for people to make money.”

However, an industry very much in its infancy is about to hit its troubled adolescence as court battles commence and barbed words are traded in the press, with the giants of the Sharing Economy painted as the robber-barons of the digital age. As with any number of emerging industries in the past, the Sharing Economy is growing so fast and making so much money that some feel the need to try and tie it down with burdensome legislative ropes. Of course there is scope for change, but we must be careful not to punish something for the very thing that makes it unique.

Uber once again finds itself in the news, facing a legal challenge from drivers, supported by the GMB union, who say that they should be recognised officially as workers at the company. Termed by the press as “the case of the year in employment law,” the potential ramifications of any findings are manifold. The bottom line, however, is simple: if the argument that the terms and conditions of the work Sharing Economy freelancers do for the likes of Hermes and City Sprint means that they are not technically self-employed holds water, then they will be entitled to the same range of benefits all ‘regular’ workers currently receive (the national minimum wage, holiday pay, the right not to be discriminated against and the right not to have deductions made from their salary.)

That line is by no means solid, however. Should any decision go the other way we will find ourselves looking at an entirely new group of flexible workers who will require the appropriate support and protection in a similar vein to the way many contractors and freelance workers already do. Although it’s a battle likely to rumble on for some time yet we strongly believe in the power of the Sharing Economy, it’s undeniable growth, and the impact it’ll have on our day to day lives both now and in the future.

So what might the future hold? There’s speculation that a new legal category of worker, somewhere between a traditional employee and a freelance contractor, may well rise. These “independent workers”, Arlidge writes, “might continue to enjoy flexible working hours and the other benefits of [working in the sharing economy], while also gaining some employee-style perks, such as minimum-income guarantees and portable health benefits.”

This idea, dubbed “flexicurity”, is one championed by Hilary Clinton and will likely be promoted if she makes it to the White House. In the UK, Labour’s Tom Watson is calling for the establishment of a new union for digital economy workers. What will happen remains to be seen, but it’s clear that the Sharing Economy isn’t going to be disappearing any time soon.

Look back in history and you’ll see that innumerable developments we now take for granted also once sat on the ducking stool at the mercy of scaremongers and Luddites. It is simply the fear of the unknown, a resistance to necessary change by those wallowing in their own comfort. They’ll ask the question ‘Why change something that already works?’ The answer, simply, should be ‘Why not?’

Want more information? It’s easy to get in touch with Kingsbridge. You can call us on 01242 808740, or email us at Alternatively, you can talk to us on Twitter, LinkedIn, or Facebook.

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