The Impact of the Sharing Economy on Business and Society

Digital Transformation and the Rise of Platform Businesses

Abbas Strømmen-Bakhtiar, Evgueni Vinogradov, Abbas Strømmen-Bakhtiar, Evgueni Vinogradov

• Publisher: Taylor & Francis
• Year: 2020
• Print ISBN: 9780367264284
• eBook ISBN: 9781000762457
• Edition: 1
• Topic: Business
• Subtopic: Finance
• Index: Business

The emergence of new platform business models, notably the sharing economy, is impacting the economy in various ways, altering the structure of many industries, and raising a number of economic and political issues.

This book investigates the widespread influence of the sharing economy on businesses and society, as well as examining its underpinning economic principles and development. This volume presents an exhaustive review of the existing knowledge on the sharing economy and addresses several major areas of concern for incumbent businesses. It also explains the business models for those who are interested in embarking on their own ventures and provides an excellent source for further research. It takes an in-depth look at controversial labour policies, such as using labour as self-employed contractors or using regulatory grey areas to expand in markets. It is highly multidisciplinary, establishing links between economics, finance, marketing and consumer behaviour. This contribution on the sharing economy will enable researchers and graduate and doctoral students to expand and improve their understanding of this topic and identify new research problems in all of these areas.

The book will also appeal to policy makers, regional and local government decision makers, and those interested in labour markets transformation.

1
Digital platforms at work

Champagne or cocktail of risks?

Anna Ilsøe and Trine Pernille Larsen

Introduction

Digital platforms such as Uber and Airbnb that facilitate the purchase and sale of services are an emerging phenomenon across the Western world and allow citizens to accrue income online. Since 2010, their effect on Western economies has attracted increasing academic and political attention (Collier et al. 2017). The debates emphasise, among other things, the implications of digital platforms for an individual’s wage and working conditions (Wood et al. 2019) and national industrial relations (IR) models (Degryse 2017). Digital platforms are argued to change the employment relationship (De Groen and Maselli 2016), ease circumvention of labour standards (Goods et al. 2019), lead to unfair competition (Söderqvist 2017) and contribute to increased inequality (Schor 2016). Less researched are the potential linkages between distinct types of digital platform services and the levels of labour precariousness across and within Western economies.

This paper offers a novel perspective on the scope of digital platform economies and the dynamics between the institutional framework and the individual’s exposure to precariousness when active on distinct digital platforms, even in densely regulated labour markets like Denmark. Denmark is well known for its universal welfare protection and strong IR-institutions that seemingly cushion individual’s risks of in-work poverty, earnings inequalities and high job insecurities (Campbell and Price 2016). Thus, Denmark represents a critical case for examining the interlinkages between digital platforms and risks of precariousness, as institutions are in place to balance out potential labour market inequalities.

Our main research questions are: what is the scope of the digital platform economy; are distinct digital platforms associated with different levels of precariousness; and, if so, why. Our focal point is the individual’s income generated via digital platforms and to what extent the low levels of protection on platforms are buffered by the wider institutional setting. The latter is defined here as employment and social protection provided to the individual through, for example, other jobs, the IR-system and the welfare state in terms of collectively agreed wages, statutory social assistance and unemployment benefits.

To address these questions, we draw on the first large-scale randomised survey on digital platforms in Denmark. Theoretically, we have sought inspiration from Thelen and Weidemann (2018). We infer that, although digital platforms have become more widespread, they are not necessarily accompanied by rising levels of precariousness, even if such online activities often operate outside the framework of most countries’ labour laws and collective agreements. We argue that the risks of precariousness depend on how the wider institutional framework for social and employment protection, in combination with the individual, are able to mitigate the risks of operating in a non-regulated online market. In this context, we distinguish between two types of digital platforms: labour platforms, defined as digital intermediaries providing purchase and sale of typically labour-intensive services such as Uber; and capital platforms, which facilitate and provide rental of private property like Airbnb.

These two types of digital platforms are both expected to be associated with risks of precariousness, but at different levels due to the combined effects of a weak regulatory framework offering low levels of social protection and the differing characteristics of individuals accruing income from capital and labour platforms (Grimshaw et al. 2016; Rubery et al. 2018; Wood et al. 2019). Access to capital platforms is typically related to private ownership, whilst other dynamics like educational attainments and skill levels are assumed to apply to labour platforms (Healy et al. 2017). These differences are expected to influence individuals’ exposure to precariousness, especially as their individual characteristics indicate their ability to compensate for the low levels of social and employment protection dominating capital and labour platforms.

This article is divided into five sections. First, we briefly discuss distinct forms of digital platforms. We then develop an analytical framework by reviewing the literature on digital labour, atypical and precarious employment. After this, the methods and data set used are presented, followed by our analysis. Finally, we discuss our findings.

Introducing the concepts of capital and labour platforms

There have been many concepts at play with regard to digital platforms. The European Commission (2016) has used the concept ‘collaborative economy’, whereas Danish unions prefer the concept of the ‘platform economy’ (LO 2016). A widely used concept is the ‘sharing economy’, which is often used in relation to distinct types of platforms where sharing, including exchange, rotation and fundraising take place (Schor 2016).

There is ample research that utilises various categories of digital platforms to capture the plethora of activities involved (Howcroft and Bregvall-Kåreborn 2019: 25). Such categories often include both narrow and wide definitions of digital platforms. Fuchs and Sevignani (2013) operate with one of the widest definitions, including paid and unpaid virtual work as well as users, providers and founders of digital platforms. We use a rather narrow definition and focus solely on the providers, i.e., those who accrue income through the digital platforms. We thereby omit the customers and founders, mainly because our aim is to gain insights into whether distinct digital platforms entail different exposure to risks of precariousness. Furthermore, we distinguish between two main types of digital platforms, while recognising that other studies operate with different categories and classifications.

The two main types of digital platforms used here are: 1) capital platforms that facilitate rentals of private property or belongings like Airbnb; and 2) labour platforms that facilitate the purchase and sale of typically labour intensive services like Uber (Farrell and Greig 2016; Schor and Attwood‐Charles 2017). Other research also uses such categorisations, but tend to use them to illuminate common features associated with online activities rather than to explore the potential linkages between distinct platforms and the levels of precariousness, which is our paper’s empirical focus (Howcroft and Bregvall-Kåreborn 2019: 25). The more specific characteristics of Danish labour and capital platforms are described in the analysis since the specifics of platforms typically vary depending on the national context including the regulations applicable to distinct platforms.

One of the challenges when investigating the size of income generated via digital platforms is to decide, which types of websites and apps fall within and outside these categories. With regard to labour platforms, we include platforms that facilitate work tasks – either as gigs (small tasks in the physical world) or as crowd work (small tasks done on the computer) (De Stefano 2016; Schmidt 2017). We have adopted a relatively narrow definition of capital platforms, which omits websites that facilitate buying and selling of used goods in our study. We are aware that this definition may result in our figures being more conservative compared to other studies like Farrell and Greig (2016). The reason for this choice is that we want to uncover whether and, if so how, digital platforms contribute to securing an ongoing income for individuals rather than an occasional sale of used belongings.

Digital platforms and risks of precariousness

Digital platforms are often considered to be yet another form of non-standard employment that exerts a downward pressure on wages, entails unfair competition and increases the risks of precarious employment in terms of poor job quality, lack of voice and high employment insecurities (Berg 2016; Goods et al. 2019). Such studies rarely distinguish between different digital platforms and their levels of precariousness and thus face similar criticism to much of the literature on atypical work. The latter research often overlooks the fact that a full-time permanent position is no guarantee against precariousness, whilst atypical work does not necessarily equal precariousness (Keune and Pedaci 2019: 2). However, strong links appear to exist between atypical work and precarious employment, although the risks of precariousness typically assume a different shape depending on the type of non-standard employment, where the welfare settlement and national IR-systems seem to play a part in cushioning the associated risks of precariousness (Campbell and Price 2016).

The dynamics between the institutional framework and the individual’s exposure to precariousness when active on distinct digital platforms are less researched than other forms of non-standard employment (Schor and Attwood‐Charles 2017). To encounter these shortcomings, we have sought inspiration from other streams of research on precarious and non-standard employment. Such studies typically emphasise different mechanisms fostering the recent rise in precarious employment (Emmenegger et al. 2012; Doellgast et al. 2018). They point, for example, to the changing landscape of industrial relations, with declining union densities, shrinking collective agreement coverage along with welfare retrenchment and labour market reforms that increasingly tie social benefits to employment status and collective agreements (Palier and Thelen 2010; Kalleberg and Vallas 2018: 5). The implications of these developments are argued to be a shift from collective mitigated risks by means of welfare and IR-settlements, towards increased individualised risks due to eroding employment and social protection (Kalleberg and Vallas 2018: 5). The regulatory setting with regard to digital platforms – especially labour platforms – is assumed to only fuel this development since digital platforms often redefine the traditional notion of employers and workers and facilitate solo self-employment. Thus, platforms abrogate the traditional employer responsibility of shouldering the costs of...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Dedication Page
• List of Contributors
• Contents
• Preface
• 1 Digital platforms at work: champagne or cocktail of risks?
• 2 Do you trust sharing your finances and financing?
• 3 Trust, control, and risk in MaaS alliances
• 4 The effect of Airbnb on rents and house prices in Norway
• 5 Digital entrepreneurs in the sharing economy: a case study on Airbnb and regional economic development in Norway
• 6 Sharing economy in Arctic offshore logistics: a paradigm shift in facilitating emergency preparedness
• Index