To make sharing economy really fair

The author of this article believes the sharing economy is the future of global prosperity. Still, it is necessary to pinpoint its shortcomings and remedy them.

Soon after the first cars of the ride hailing service Uber started running in Vietnam’s key cities in 2014, this new type of transport quickly reigned supreme. It rallied supporters and faced opponents as well. So far, this business model has developed healthily, attracting both cars and motorcycles offering the services of already well-known brands such as Grab, GoViet, Be and Emddi.

It is difficult to know exactly how many members there are in these fleets of “app-based taxis and motorbike taxis.” However, it is absolutely sure that the new business holds a powerful appeal to the country’s workforce: Anyone who has a personal vehicle and meets the conditions of the operators may be employed and may earn income instantly. Drivers take on their jobs even though they probably do not know about their benefits and social insurance policies.

Undeniably, the so-called “sharing economy” has brought consumers many convenient services and goods at more affordable prices. Make a click in the mobile app and cars or motorbikes will immediately come. No matter if customers want to rent a house or a room during their short or long vacations, just use the app Airbnb on their cell phones, and they’ll be recommended a list of lodging facilities with various s, convenient locations and low prices.

According to the theorists of this new economic theory, the essence of the sharing economy—cooperation and redistribution of resources and facilities—is not being used effectively. For example, you have a spare room in your house, so you share it with those in need; you have a vehicle that is left unused for many hours during the day, so you rent it to others with affordable rates; and so on. That is sharing, and sharing is somewhat an act of kindness.

However, even with kindness, how come such new way of doing business is struggling in many parts of the world? In the UK, the taxi association is claiming £1 billion from Uber for the alleged damages they do to the livelihood of traditional taxi drivers and their families. In the U.S., hotel owners ask the authorities of New York and San Francisco to suspend Airbnb. In Canada, Uber is legalized, but quite a few disputes and arguments have erupted between them and taxi companies. And in HCMC, earlier this year, Vinasun sued Grab for the damages the traditional taxi firm had suffered.

It is hard to tell which one will win in this conflict between the new and the old, but the emergence of a number of methods of business derived from the sharing economy is creating many huge gaps.

“I used to work for Uber and now I have quit and drive a passenger car as a contract employee,” said a driver working for a transport firm. “The job of a driver is among the risky ones, but few of us paid attention to the labor contract, and the [former] employer didn’t care about social insurance and labor regimes... I had been driving for three or four years, and when I quit, they cut off the “app”, so everything ended all of a sudden.”

Could it be that the employer neglecting their obligations to the employee will become a common thing once the sharing economy develops? It possibly could. Why? The driver above said people like him are only considered as a freelance worker. Once they are recruited by some enterprises, the employer in the name of the “technology contract” just casually takes a cut of 20% or 28% from their total income. The employer does not care about the employee’s benefits such as social insurance, health insurance and accident insurance.

Ride-hailing firms claim they are not taxi companies since the vehicles running on the street albeit under the name are not their assets. Also, they do not pay the driver, but he or she earn income his- or herself. The “virtual” theory is applied skillfully here: the driver is the one at stake, while their employer has nothing to lose. It is difficult for customers to directly claim the prestige of the service provider, because the ones who get judged are drivers through the ratings customers give them. Those drivers with a low score will be eliminated and revoked access to the app, while the reputation of the service provider is unaffected.

When Uber was still faring well in Vietnam, some individuals with idle money bought a couple of cars and hired some people to work as Uber drivers. After paying a portion of their income to the operator, drivers continued to share the earnings with car owners (secondary investors) according to the ratio both parties agreed on beforehand. These secondary investors took all the risks after Uber had staged an exit.

Perhaps, we should believe the new always wins though it may be the underdog at first. The author believes the sharing economy is the future of global prosperity. Still, it is necessary to figure out which aspects of this new business are causing gaps to remedy them. Only when the new business contributes to the wealth of the place where it is, and is to employees, will it be truly “sharing.”


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