The gig economy: the future of work or a step backwards?

Platforms like Airbnb are reshaping traditional employment models and opening up new opportunities – but do they really offer the freedom they promise or are they a threat to workers’ rights?

Redundant factory workers, parents and people in rural communities – or anyone struggling to make ends meet - can now tap into a new source of income, by renting out rooms to paying guests.

Peer-to-peer platforms like Airbnb have provided a lifeline for many people unable to find or take on a regular job, and a handy ‘side hustle’ for those seeking to earn a little extra cash. For others, they have offered an opportunity to quit the ‘rat race’ altogether and build a career in the gig economy.

Certainly, there is no shortage of ways to earn money both now and in the future workforce. An internet search brings up suggestions such as selling online art, writing a blog, becoming a virtual assistant or a mystery shopper. Almost all rely on some form of online trading platform.

Professor Sara Dolnicar, an expert in peer-to-peer accommodation at The University of Queensland (UQ) Business School, says platforms like Airbnb have been quietly reshaping traditional models of work through their impact has been little noticed since the public debate has focused on their effect on real estate prices.

“New income generation models offer an alternative to the traditional model of full-time employment,” she explains. “Today a person can drive for Uber, rent out their spare room, take on short-term contracts and be on call if some extra assistance is required at an event.

“Peer-to-peer networks offer huge potential but, as with anything in life, there is also a flipside. Rental of private homes has the potential to put pressure on traditional hospitality providers. This in turn, may force them to reduce costs."

"With personnel representing their biggest single overhead, hotels may choose to transition from a permanent long-term employee base to more flexible short-term contracting,” says Sara.

Some research has found that platforms can have a longer-term impact on the employment market, by shifting work usually done by employees to the self-employed, increasing offshoring and making low-skilled workers vulnerable.

The new workforce servicing the gig economy

Undoubtedly peer-to-peer platforms have created a new generation of micro-entrepreneurs, with opportunities extending beyond their immediate suppliers. For example, private rentals generate demand for local services such as cleaning, gardening and maintenance.

As a result of this expanding peer-powered economy, new types of jobs have emerged, such as hosting manager, and new businesses such as lettings management, consultancy and training to help hosts maximise their income. Peer-to-peer trading platforms become centre points for entirely new industries.

The risks of peer-to-peer platforms

While the rise of the peer-to-peer economy is praised for its market disruption of traditional workplaces, it also raises questions around ongoing viability and legal protections for workers.

Independent operators and service providers receive no superannuation or insurance, and the rewards are not guaranteed. Like any venture, Airbnb rentals are not always viable. Workers are also dependent on the platform, and a sudden change in the design or the algorithms could leave them feeling vulnerable.

There is also the risk that a sudden influx of new operators could create an oversupply and push down wages for everyone, as witnessed in Germany after Airbnb’s entry into the market in 2012.

Associate Professor Sarah Kelly, a legal expert at UQ Business School, points out that in the current situation suppliers need to assess the disadvantages against the advantages. While platforms have the power and resources of other big businesses, suppliers lack the union-backed bargaining power that a traditional workforce would have under current legislation.

"Peer-to-peer business models are driving a transformation of the workforce and policy has not aligned with this dramatic shift."

"Gig economy contractors are trading security and benefits such as superannuation, health insurance, leave entitlements, recognition and security for flexibility and independence. Contractors are also excluded from protective legislation, including workers’ compensation and Fair Work protection in most cases."

Sarah believes the solution to the new workplace arrangements is a co-operative ecosystem among industry, policy and workers to ensure adequate protection is afforded to all workers.

"Some policy improvements might include the ability for contractors to carry over benefits among gigs, or long term contractors with a single client being recognised with a special employee status. Overall, evolution in policy is needed in response to this rapidly expanding workplace model."

Where to from here?

Sara says that Airbnb’s move into ‘experiences’ has expanded its reach by allowing residents to sell a whole range of services beyond a space to sleep.

She says, “peer-to-peer platforms allow ordinary people to successfully trade online. If they can trade accommodation and taxi rides, they can trade anything. "

"As the gig economy gets bigger and bigger, new employment opportunities will continue to arise, which is fantastic, as long as a we maintain a high welfare standard for our workers as a collective society."
"New opportunities are not necessarily a threat to traditional forms of employment, but the transition does need to be carefully managed,” says Sara.

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