The Concepts Of 'On-Demand Economy', Or 'Gig Economy', Or 'Sharing Economy'?
The on-demand economy according to Theondemandeconomy.org, “the On-Demand Economy ís defined as the economic activity created by digital marketplaces that fulfill consumer demand via immediate access to and convenient provisioning of goods and services.” In short, this kind of economic operation was created and modified to meet consumers’ demand instantly through websites which users could access and purchase products or services, therefore, productivity can be fortified.
Gig economy (can be inter-substitutable for on-demand economy), according to Investopedia: “is where temporary, flexible jobs are commonplace and companies tend toward hiring independent contractors and freelancers instead of full-time employees, A gig economy undermines the traditional economy of full-time workers who rarely change positions and instead focus on a lifetime career”. It means companies now recruit freelance or casual employees (outsourcing) to get the work done instead of employing full-time workers like in the past.
Sharing economy , also known as ‘collaborative consumption’ (Botsman 2013; Botsman & Rogers 2010) or ‘sharing economy’ ( US Federal Trade Commission 2015), is “a peer-to-peer-based activity of obtaining, giving, or sharing the access to goods and services, coordinated through community-based online services” (Hamari et al., Forthcoming 2015). (https://ec.europa.eu/jrc/sites/jrcsh/files/JRC100369.pdf)
Taking Uber, Airbnb, Grab, Lazada, Amazon, Shopee for instance. This kind of companies all outsource from other places to do their business. They employ people as services like Uber as peer-to-peer ridesharing, people riding their car and picking up customers so people are actually services. Other examples are shopee, Amazon, Airbnb. The companies are running their business through websites, providing consumers with online choices for accommodations, products, goods and other services but they don’t own any of those products. Anyone who wants to sell their products or services can be their staff and they’re flexible with their time when participating in this kind of online working for the companies. Codagnone and Martens, C 2016, Scoping the Sharing Economy: Origins, Definitions, Impact and Regulatory Issues, viewed 31 July, 2018, .
In what ways is the ‘gig economy’ exploitative?
The ‘gig economy’ can be exploitative due to some cases as follows: First, it’s exploitative when the employees’ laws are destructed. For instance, the workers are not under the protection of the law since all of their jobs are signed on short-term contracts or to no contract at all. Furthermore, they have not received the insurance since the companies do not have to pay, unlike the full-time employees working in the traditional business models. Second, it might ruin the traditional business structure and erode the foundation of the “employer-employee” relationship. Third, this digital and internet-based economy is unfairly exploiting and using comparatively low-salary employees for profits and advantages due to the classification of staff.
What is the ‘pay per service’ model of sharing economy? How does it work?
This model (also referred to ‘capitalist sharing’ scheme) used to describe a payment structure in which each person joined the system providing his or her own services is the capitalist and the services provided only be charged when the customers use them. It means clients are temporarily able to utilize one shared resource from this capitalist and they only have to pay each time they use the service.
According to Fuchs, this model is applying to Uber. The drivers’ work performances are shared among clients. Drivers sell their work and services temporarily to the passengers to make money. The drivers’ skills are provided to a plethora of customers. His or her investments of cars and petrol are his or her own capitals. Uber does not own any of those capitals but it makes money by charging the drivers 20-25% commission for using their app. (Fuchs 2017).
Does Uber strengthen, or weaken, the local economy in the UK, according to Fuchs
According to Fuchs in 2017, Uber has weakened the UK’s domestic economy. (Fuchs 2017). Firstly, it massively decreases the profits of other industries. For example, people don’t use taxi anymore which reduces the profits of taxi business operators. As a result, taxi drivers are getting paid less or losing their jobs. This makes the unemployment situation become more severe. Furthermore, Fuchs believed that people who are working for Uber are poorly paid. (the data shows they are well paid but it doesn’t calculate the petrol, maintenance, insurance and other fees). Therefore, Uber is causing a low-wage payment to the UK’s labor. Finally, the taxes should be paid in the UK are also dodged by Uber. Uber transferred its profits to the Netherlands where the taxes are lower to minimize its tax-paying duty. Thus, Uber is acting as the precursor of the tax avoidance which is weakening the national economies.
According to Fuchs (2017), why do people find using Uber attractive? Can you think of any other reason, based on your experience? What is your personal feeling towards Uber?
First, passengers find Uber economical, it’s cheaper compared to other taxi services. Secondly, “the location-based services can be used anytime from any place on a mobile. Furthermore,… these qualities come at the social price of a low-wage economy. At the same time, some drivers may certainly think Uber is a good opportunity.” (Fuchs 2017)
To the best of my observation and experience, I think users are attracted to Uber for so many reasons. First of all, it’s actually cheaper than other taxi services. Secondly, it has the rating and commenting section on the phone where you can rate and comment on your drivers (this one can hardly be found in traditional taxi services), which is indeed very important (it makes customers feel more secure as they’re carefully monitored and cared for by the service providers). Third, they can contact directly to the Uber managers just in case of emergency since Uber has all their information and lists of emergency contacts. Moreover, Uber unstoppably provides customers with discount programs and always shows the clients the total ride’s fee beforehand which allows users to be free to make a decision before actually booking. This also helps them to avoid the tipping culture, overcharging as well as taxi scams.
What is the ‘rent-on-rent’ model of sharing economy? How does it work? (Fuchs 2017)
The rent-on-rent model of sharing economy (third form of the capitalist sharing economy) is the model in which the products provided are: “more conservative forms of private property. Their owners rent them out to leasers and charge a certain rent for this use. This rent stems from profits in the event of the leaser being a capitalist, from wages ifs/he is an employee, or a non-differentiable profit-wage if s/he is a freelancer. In the case of a capitalist being the renter, the source of rent is the surplus-value created by the capitalist’s employees. If the renter is a worker, then the rent is charged on wages. If several people rent a good together, then combinations of different rent sources are also possible. The sharing platforms charge a specific annual fee or percentage share on the rental price. The platform is rented out for the service of mediating the renting of physical goods for a specific time period. The platform owners charge a rent on rent.” (Fuchs 2017)
Why do people find using Airbnb attractive? What is Airbnb’s impact on the local economy in Barcelona, and its impact on the housing crisis in London?
First, it promised: “to overcome commodity fetishism” (Fuchs 2017). In addition, the services provided will strengthen the community connection, people bonding, and of course environmental sustainability. Service like AirBnB allows people to find different housing options which are suitable for them on a short-term visit or vacation. In addition, it provides travelers with conveniences and first-hand cultural experience. They are able to stay in a local neighborhood when renting a house or accommodation on Airbnb. Next, it offers privacy, unlike hostels or hotels. Some people hate being monitored by cameras and by other hotels’ staff. Moreover, AirBnB services are undeniably good. It enables people to rate the accommodation, review their experience, claim for help or services 24/7 and it’s absolutely a good idea for travelers who travel in a group if they want to be economical.
The domestic situation in Barcelona was negatively influenced by Airbnb. Tourists and visitors had been switching their accommodation options from hotels or hostels to Airbnb’s apartments or homestays. Therefore, the tax which should be submitted to the state has been decreased since the Airbnb hosts didn’t pay their fees. It had to pay fines and confronted with legal issues in many cities. In London, the house crisis caused by Airbnb has made the average-income Londoners incapable of purchasing a house or a flat. They are pushed to rent because of the increase of unaffordable housing fees. Affluent house owners will, therefore, buy more houses to rent them out and become even richer. Simultaneously, the number of affordable houses will eventually decrease and will become privatized. This will result in the increase of the capitalists who are extremely rich from possessing private housings, widening the wealth gap, producing s housing shortage and the crisis will, therefore, become even more severe.
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