The new platform economy: Risks and opportunities
New digital platforms like Airbnb and Uber are changing our labour markets and our behaviour as consumers. We take a look at some of the risks and opportunities of digitalisation.
By Jakob Esmann
Digitalisation of the economy and society is an important challenge for the trade union movement, app-based platforms, such as Uber and Airbnb, have become very popular in most of Europe and the Nordic countries. Digitalisation brings the fourth industrial revolution which is about to change tourism industry, but also the world of labour in general.
A lot of hype has built up around digitalisation. On one side, digitalisation is acclaimed for delivering universal benefits for all, bringing a circular economy with less waste, a better use of under-used assets (such as cars, flats…), fantastic opportunities for better information, communication, connectedness and transparency, easier reconciliation of life and work and a new world of sharing and collaboration, digital work as sort of a panacea, a promise of a more fair, equal, just and sustainable world based on a democratic internet and more participation.
The more sceptical camp predicts a trend leading to a future with dramatically high job losses, 24/7 availability, deteriorating working conditions, blurring of barriers between private and working life, increasing supervision and control, polarisation of jobs, widening wealth inequalities, housing problems, a new machine age with a global pool of workers competing against each other, leading to a race to the bottom in wages and working conditions.
NU HRCT endorses neither the over-enthusiastic nor the sceptical visions but tries to look at both dimensions, the opportunities as well as the risks. It is our task as trade unions to point to some worrying trends and significant problems in the future of work. It is important to apply the precautionary principle to avoid digitisation further splitting society into a few winners and many losers and contributing to an even more unequal distribution of wealth.
Using existing resources in a smarter way
The “sharing economy” sure has a nice ring to it, doesn’t it? Sharing economy, where people can use what they already have to help others, while making some bonus money for themselves, sounds like a perfect solution. Through Uber, the sharing economy’s poster-child, thousands of drivers have turned their personal cars into money-making vehicles. Homeowners internationally have earned extra cash by using another popular sharing service, Airbnb. In other words Airbnb means using existing resources more efficiently. Such peer-to-peer rental schemes provide handy extra income for owners and can be less costly and more convenient for borrowers. However, Airbnb is also challenging the traditional tourism industry and is undermining job security and wages in the industry.
Most people on Airbnb are renting out their empty homes. Instead of leaving them empty for a week or two, other people can benefit from their home. Therefore, their home and estate as a resource is better used. Fewer resources are needed to fulfill the needs.
But whenever resource-saving platforms like Airbnb are misused, they are no longer part of the sharing economy. It is smart, if you during few weeks a year are renting out your own apartment in which you normally live. It is misuse though, if you rent out an apartment or apartments you own on short term basis but in which you don’t normally live.
Nordic countries facing political and legal issues with Airbnb
As an example, Danish law states you have the right to rent out your home 7 weeks a year. But according to a recent study, more than 2,500 apartments in just Copenhagen are rented out more than 7 weeks a year. That equals 16 percent of all ads on the website.
Also, there are political problems regarding Airbnb. There is a maximum period on renting out your home. But on the other hand, there is no control on the tax payment from it, and you don’t have to pay VAT.
In addition to the taxation issue, the illegal use of Airbnb also puts a huge pressure on the housing market. In Copenhagen, it is already very difficult to find an affordable home. This is pure logic since you can make more money by renting out an apartment for 900 euros a week 52 weeks a year on Airbnb, instead of letting ordinary people with an ordinary income live in the apartment for 900 euros a month.