THE BLOG

Are We Looking After The Gig Economy?

19/01/2017 12:20

The people who drive our Ubers, transport our Deliveroos and open up their homes when we go on city breaks have helped drag our services industry into the 21st Century. Dubbed the 'sharing' or 'gig' economy' because of its use of shared physical or human assets, the industry has exploded in the last few years. But how can we level the playing field for the new army of men and women who are making our lives easier through the tap of a smartphone button?

The UK's sharing economy is now the fastest growing in Europe, with transactions increasing by 92% between 2014 and 2015 and almost doubling to £7.4bn in 2015, and is showing no signs of slowing down. A recent audit by PricewaterhouseCoopers has indicated that the industry is set to expand at a rate of 30% per year over the next decade, generating £18bn of revenue for platforms and facilitating roughly £140bn worth of transactions per year by 2025.

Home-grown UK firms like Love Home Swap, JustPark and Hassle are rapidly expanding beyond UK shores, helping to put Brits firmly on the global sharing economy map.

As consumers, this burgeoning and fruitful sector means that we get everything at the swipe of a smartphone screen, at prices that sometimes seem ridiculous, and all we have to do is post the occasional review to keep the whole thing ticking along, right?

Up to a point, yes. But should we be taking a bit more responsibility when we're the 'P' in a 'P2P' transaction? For the workers, the pay-off for a steady stream of business is often long hours, sparse workers' rights, and tight margins on what can often be high running costs.

Uber in particular came under the spotlight recently when a UK employment court ruled that their drivers are not self-employed and should be paid the "national living wage", in a landmark case which will affect tens of thousands of workers in the gig economy.

It isn't just the courts who have an opinion. The UK media is no stranger to scrutinising thriving firms in the gig economy space. While it's true that the flexible working practices that have resulted from this new model of working can hugely benefit employees, they can also give rise to less favourable outcomes such as low pay, high pressure and a lack of benefits. UK trade unions have openly said that this boom in 'self-employment' does not necessarily mean that workers are better treated.

As a consumer, this may not feel like our immediate concern, but imagine if the likes of Uber, Deliveroo, Just Eat and AirBnB that we have become so accustomed to in our daily lives, suddenly disappeared overnight.

So, what can we do to ensure that the sharing economy continues to thrive?

Firstly, we have a duty to keep these services 'honest' by making sure we post feedback - good and bad. The legitimacy of the reviews on sites like TripAdvisor is essential in retaining the public's trust, and the sharing economy is no different. Air BnB confirms on their website: "Our community relies on honest, transparent reviews. We will remove or alter a review if we find that it violates our review guidelines."

Transparent and honest reviews give users the confidence to continue using the services. The fact that as customers, we can also be 'reviewed' means that individuals are more inclined to act with integrity, regardless of which end of the transaction they operate from.

As well as consumers, professional and financial services companies can also help level the playing field. At APS financial, for example, we are investing hugely into broadening the services that we offer freelancers and SMEs. Responding to a 93% year-on-year growth in demand for capital from SME businesses since October 2015, we recently offered investors the chance to earn 7% gross fixed interest a year in our first successful mini-bond offering. The money raised will predominantly be used to develop new innovative credit products to supplement small businesses' cash flows and expand existing consumer credit card lending to new markets, including those operating in the sharing economy.

As members of Sharing Economy UK, we are able to support workers in this space who often have a need for a low cost, easy-to-open, business current account. We are also able to support platform providers in the sector with an integrated approach, which provides new workers with a solution and potentially enables them to make payments more frequently.

So the next time you're booking a long weekend away, taking a taxi ride or getting some shelves fixed, make sure you play your part to ensure this exciting and evolving industry continues to spearhead the UK economy for years to come.

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