Comment Perhaps it's time to retire the term "sharing economy" once and for all. The Confederation of British Industry (CBI) this week swallowed up the "gig economy" trade group Sharing Economy UK.
"Sharing economy" was initially used to describe individuals trading under-utilised private assets or labour informally, on a peer-to-peer basis. But it was co-opted by VC-funded "platforms" such as AirBnB and Uber to describe their businesses. And their model was aptly described by Broadsight's Alan Patrick as "labour arbitrage" – exploiting regulatory loopholes.
Patrick defined this as: "A business that essentially bases all its economic value on arbitraging a section of the labour market, essentially the newly emergent (and thus poorly regulated) zero-hours contract, dead-end contract job market, or whatever the equivalent is in whichever country you look at." And he warned that the window would soon shut. "History tells us this will inevitably be regulated at some point in OECD countries."
A UK court did just that last year, ruling that Uber drivers were employees and not "self-employed".
Uber has spent enormous amounts of other people's money to enter new markets aggressively, with some 30,000 drivers in London. The goal, author of What's Yours Is Mine Tom Slee suggests, is about destroying competition to attain a monopoly position. Uber's VC capital subsidises rides by as much as 40 per cent, according to some estimates, losing $7m a day or more.
It isn't hard to see why the CBI likes the "sharing economy" – it's a hammer with which to beat labour. If Uber and erstwhile Ubers are successful in becoming monopolies, and are unchallenged in the courts, the "sharing economy" employment becomes the norm.
Already, Uber-style employment terms have spread far beyond Silicon Valley-funded businesses. The Guardian reports that Royal Mail's 134-year-old delivery service Parcelforce now defines employees as "self-employed" and fines them if they are ill and unable to provide cover.
So shouldn't a "sharing economy" group reflect the assets and labour of those doing the "sharing"? Apparently not: both Sharing Economy UK's previous chair (Debbie Wosskow OBE, CEO of Love Home Swap) and its new chair (Richard Laughton, CEO of Easy Car) represent asset "sharing" – not labour.
In 2014 the-then "digital czar" Neelie Kroes told striking taxi drivers not to protest but instead go home and ponder the benefits of "disruptive" entrepreneurship and cheap fares.
The problem with portmanteau terms like "sharing economy" or "gig economy" is that it places labour and assets under the same umbrella. Few people object to a private individual renting a lawnmower or a room. Until the "digital era" we've treated humans differently, implicitly recognising that a worker is not a lump of bricks or machinery. With powerful forces like the CBI and the EU coming down on the side of the "platforms", who still speaks for labour? ®