Date
19 October 2017
Companies like Airbnb and Uber have changed the rules of the game in business, but they are accused of not doing enough for their service providers. Photos: Bloomberg
Companies like Airbnb and Uber have changed the rules of the game in business, but they are accused of not doing enough for their service providers. Photos: Bloomberg

Are workers getting a raw deal in the gig economy?

Who doesn’t like the new economy babies like Uber and Airbnb which help consumers pay less for more?

Car-hailing company Uber has carved out a unique space for itself despite scaling down some services in Hong Kong recently.

Vacation rental website Airbnb, on its part, has managed to grab a significant slice of business from those who want the experience of living like a local — at a local price, of course.

The rise of such disruptors, a list that includes names such as food delivery platform Deliveroo and errand enabler Taskrabbit, against traditional businesses in the shared economy is challenging the fundamentals of the labor market as we know it.

It is because these companies adopt the pay-as-you-work system that does not provide fringe benefits, not to mention medical or any form of insurance, to their service providers.

No minimum wage, because the new-age firms do not observe labor law in the same way as traditional businesses, given the grey zone in which they operate.

Welcome to the so-called gig economy, or zero-hour contract, where many types of contracts and part-time jobs are available at a level unseen before.

Despite the many work opportunities thrown up by the online service providers, the fact is that not many people can claim that they are making more money than before.

It seems that when it comes to the shared economy, the sum is not often greater than total.

The balance is tipped toward the employers, not workers, because the former have retained much greater bargaining power in pricing.

If you are working for the new breed of companies, do not also bet that a labor union will be able to get a better deal for you.

Let’s not forget that Hong Kong, in any case, doesn’t really have a big union culture.

That said, these issues are unlikely to put a halt to the rising acceptance of part-time or temporary work.

It is an irreversible trend in the job market here, just like the case in other parts of the world.

In the United States, for example, one-third of the newly created jobs now are said to be taken up by independent contractors. The figure is expected to reach 40 percent by 2020.

Given this phenomenon, issues related to the gig economy, in which temporary positions are common and firms hire independent workers on short-term contracts, deserve closer attention — a fact acknowledged by participants in RTHK’s latest Backchat program.

The next time you place an order for food delivery, taxi or hotel room, you should perhaps give a thought as to whether the online platforms are doing enough for their service providers.

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BK/AC/RC

EJ Insight writer

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