fbpx

Author: Anna Arunashvili

The EU is after gig economy: what does this mean?

Recently, the European Commission published draft legislation, planning to regulate the employment status of gig workers across the bloc. There have been multiple attempts of defining worker rights and status at the country level, with contradicting court decisions, and it seems like the EU commission wants to take matters into its own hands. 

Sharing economy is a platform-based type of exchange that allows individuals and groups to share their services peer-to-peer. Platforms only act as intermediaries and facilitators, instantly connecting the supply with demand, but not everyone sees sharing economy platforms in this way. Ride-hailing and delivery services have come under fire for treating drivers and delivery workers as contractors. The EU Commission and a few member states such as The Netherlands say that they should be given the employers’ rights.

This EU initiative has received different reactions. While unions found a reason for celebration, ride-hailing and delivery platforms rally against it. Uber and Delivery Platforms Europe, the group of food delivery platforms, voiced their concerns about the impact this initiative will have on consumer choice and the thousands of jobs it threatens. Changing the business model may not be feasible for all the companies, as it could force them out of some EU markets. According to a recent study, up to 250,000 couriers could quit if legislation reduces flexibility around working hours and schedules. This has already happened with Deliveroo and Spain. After a new Spanish “Rider Law” entered into the force in August, the company had to cease all operations and 8,000 couriers ended up losing their jobs. 

The contractor status gives drivers flexibility and the chance to choose their working hours. In our fast-changing world, that is especially appealing. Furthermore, with the increased risk of getting laid off as a result of another lockdown, engaging in the gig economy lets Europeans diversify their income sources. They can work for different ride-hailing apps simultaneously, which would be impossible in the case of full employee status. It also allows those drivers to mix various engagements and find which one works best for them. A 2018 study of Uber drivers in London demonstrated that flexible schedule, along with autonomy was the main benefit for them, while another study found that being an independent contractor is associated with “greater enjoyment of daily activities, a decrease in psychological strain”.

Delivery drivers are no different, two-thirds of respondents of a study by Copenhagen Economics name flexibility as the main reason for working as a courier and over 70% of them wouldn’t be willing to switch to fixed-schedule work.

For workers, the draft legislation would mean a loss of flexibility to decide their working hours and the ability to work for several platforms simultaneously. For European consumers, these changes would mean a hike in sharing economy services prices, which they have been relying heavily on during the pandemic. This can lead to decreased demand for food delivery services, and in the light of current lockdowns and restrictions, the restaurant business also ends with the short end of the stick. 

One size doesn’t fit all: some prefer using traditional taxi services, others are more comfortable with ride-hailing apps. Just because taxi drivers are faced with substantial licensing fees that drive up the cost of the service, doesn’t mean we should overburden ride-hailing platforms with the same regulations and restrictions. If European governments want to create a level playing field, they should make things easier for taxi drivers and gig workers, as happened in the case of Estonia. The Estonian government legalized the sharing economy “at a time when a large part of the world is finding protectionist reasons to prohibit the sharing economy” and lessened previous regulatory burden on taxis. The Estonian government didn’t try to cover employment status and rightly so, as according to recent polls 76.4% of platform workers in Estonia use the gig economy to supplement their income.

Consumer habits have changed and even after the pandemic is finally over, it is likely that we will keep ordering food from the comfort of our own homes. These platforms provide unique value to millions of consumers around Europe. If we transfer the exact rules and regulations traditional services are faced with —as the EU Commission intends to do—we risk losing everything that makes the sharing economy unique and attractive. Consumers are the ones who will have to bear the burden of restricted choice and increased prices. 

End the War on Nicotine

Reducing the number of smokers remains public health priority for governments around the world. However, the war against nicotine prevents further progress.

The bad reputation of nicotine is getting in the way of providing smokers with a safer alternative to traditional tobacco cigarettes. A new paper, published by the Consumer Choice Center, aims to debunk myths associated with nicotine and provide some more clarity around what nicotine actually is.

Smoking rates have been steadily declining but it is not thanks to tools applied by the governments,  but rather the innovative alternatives to smoking such as e-cigarettes, snus, etc. Unfortunately, rather than promote an alternative that is far less harmful and gives people a chance to live healthier and longer lives, public officials are waging a war on nicotine. This limits access to those life-saving alternatives. 

Contrary to popular belief, the harm from smoking comes from the thousands of other chemicals in tobacco smoke, many of which are toxic. And while nicotine is an addictive substance, it is relatively harmless and doesn’t increase the risk of serious illnesses (heart attack, stroke) or mortality.

Unlike vaping, conventional nicotine replacement therapies, such as patches, nasal sprays, gums are endorsed by public health bodies. Going against vape and snus just because it is a different way of consuming nicotine is inconsistent, to say the least. NRTs work for some people, but others prefer vaping, and it should be up to consumers to choose their preferred harm-reduction tool. Instead of limiting their choices, we should use all tools at our disposal to help smokers switch.  

Nicotine has been demonised for so long that the health benefits of nicotine consumption have been completely ignored. Research since the 1960’s has demonstrated that smokers show lower rates of Parkinson’s disease, and recently a study suggested the reason for this is nicotine. Another study suggests that nicotine has an appetite suppressing effect and therefore acts as a weight suppressant, and could be used to fight obesity Studies also suggest that nicotine can improve exercise endurance and strength. This explains why many professional athletes use nicotine to improve their performance.

Distorted perceptions about nicotine stand in the way of more smokers switching to less harmful ways of consuming nicotine. Many physicians falsely believe that nicotine is the substance causing cancer in patients. Public health advocates and health experts need to get educated on the topic and encourage smokers to switch to alternatives, such as vaping which is 95% less harmful than traditional cigarettes.  

Prohibition doesn’t work, as demonstrated by the American prohibition era and numerous other examples. Instead, it pushes consumers towards the black market where providing high quality products is not a priority.

Innovative nicotine products have the potential to save millions of lives around the world, and we should not allow misconceptions get in the way of the fight against smoking-induced diseases.

Read our new paper “Six reasons to stop the war on nicotine” to find out more on the topic

Electric or motor vehicle? Let consumers decide

Emissions from the transportation sector account for 25% of all EU emissions. In an effort to reduce net greenhouse gas emissions by at least 55%, the European commission announced its plan to ban the sales of new cars that produce carbon emissions by 2035. Enabling this sales ban would require approval from all member states, and it could take up to 2 years to obtain it. The EU has set an ambitious goal of becoming the first climate-neutral continent by 2050, and achieving this goal requires equally ambitious changes to be made.

Massive adoption of electric cars is thought to be a good strategy to fight climate change. Green groups, like Greenpeace, are advocating for financial incentives for EVs while disincentivizing the sale of diesel and petrol cars. But there are many aspects that have to be taken into consideration before EVs are dubbed as environmentally friendly. 

EVs have a lot of advantages: they are low maintenance, don’t run on fuel, therefore produce no emissions, fully charging them is a lot cheaper than filling up a tank of a motor vehicle. But they come with downsides too.  EVs require electricity to be charged and if the electricity itself does not come from clean sources such as hydro, solar or nuclear power and is instead produced by burning fossil fuels, would they make any difference? Adopting electric vehicles only makes sense if countries rely on low-carbon energy supply sources and have the ability to store renewable energy. As of today, it is a big challenge for many European countries, not to mention developing countries.

Another problem with electric vehicles is the lack of infrastructure. Currently, most EU countries lack charging stations, and it would require 1.8 billion investment to deploy the target number of charging points. Recently, auditors have also dubbed the deployment of electric vehicle charging stations as too slow

However, while it is important to discuss how exactly our transition to EVs is going to work, there is a greater issue at play. Banning the sales of motor vehicles reinforces the dangerous precedent of the government picking winners and losers. Drivers of the internal combustion engine cars are already some of the most heavily taxed consumers. They face various taxes and charges that account for most of their mobility costs. Price of petrol and diesel is excessively high and the average government share of fuel price across the EU varies between 44-59%. (Read our recent paper to find out more on this topic)

Arguments can be made for and against both electric and internal combustion engine vehicles. The main issue is that rather than leaving it up to consumers to choose their desired technology, the government is making the final call for us. Automobile companies are already working towards making internal combustion engines more fuel efficient and according to EEA “carbon intensity of newly-registered gasoline-powered cars in Europe fell an average of 25% between 2006 and 2016”.  


Transition to EVs should happen naturally and not forced upon us by government bodies. Many companies are voluntarily shifting their manufacturing process towards the EVs and European consumers are quite open to the idea of purchasing electric cars. And all of this is happening without government mandates! The European Union should adhere to technology neutrality to preserve consumer choice and foster innovation.

Innovation in Agriculture Will Help Combat the Climate Change

The world population is expected to reach 10 billion by 2050. As natural resources are limited, and in order to meet the needs of an ever-growing world population, we need to increase our food production. However, a more pressing problem is to ensure that is not done at the expense of the environment. The agricultural sector is a significant contributor to greenhouse gas emissions, both through direct activities and land changes. 

European policymakers are betting on organic farming and through their “Farm to Fork” strategy. They want to reach a 25 percent organic production target. Even though organic agriculture has become interchangeable with sustainable agriculture, it might not be the most viable solution for our planet and our population. Organic farming has low yields and without the use of pesticides, farmers are bound to lose 30 to 40 percent of their crops. If we were to rely on organic farming alone, we would need to set aside more land for agricultural production which can only be achieved through deforestation.

Deforestation is already a pressing issue and one of the causes of climate change. It would make zero sense to cut down trees to free up the land for farming. In 2017, researchers at the Research Institute of Organic Agriculture in Switzerland estimated that if the world chose to fully convert to organic agriculture, we would need between 16 and 81% more land to feed the planet. Attendees at the UN’s COP26 have already promised to end deforestation by 2030, but putting more effort into the development of organic food production would be incongruous to their pledge. 

The answers to these problems, therefore, must be innovation.

The European Union is lagging behind on this front. Current GMO legislation, which was established back in 2001, strictly regulates the introduction of DNA from other species into animals and plants. Unfortunately, very promising gene-editing tools, such as CRISPR-Cas9, are not exempted from the regulations, even though the technique does not entail inserting foreign DNA, as is often mistakenly claimed.

Such outdated legislation prevents European scientists from participating in the gene revolution and European farmers from taking advantage of all benefits this innovative sector has to offer. CRISPR could produce climate-resilient crops with higher yields. It can also add or remove features that would make crops more adaptable, think of gluten-free wheat that would make gluten-free products just as affordable as the gluten-based ones (at the moment it is 183% more expensive)

Gene-editing allows for the creation of disease-resistant crops. CRISPR technology can be used to build resistance to all plant pathogens, bacteria, viruses, and fungi, eliminating the need to use pesticides and fertilizers.

The solution is right in front of us, and we should not allow perceived threats, especially those that are not backed by substantial evidence, to stop us from adopting technologies that can benefit farmers, consumers and our planet equally.

If you want to know more about the topic, we recommend reading our papers Sustainable Agriculture and It’s in Our Genes

COP26: Lots of costly promise but no feasible solutions

This week, leaders from across the world are gathering in Glasgow to attend the Conference of the Parties, 26th United Nations Climate Change Conference, hosted by the UK in partnership with Italy. This is the biggest meeting on climate after Paris back in 2015, which resulted in participating countries signing an agreement aiming to keep global warming at below 2 degrees celsius. In Glasgow, countries will present their action plans for carbon reduction for 2030 and some developing countries will secure large sums of money to help them move away from fossil fuels. Hopes are big, promises even bigger, but are their methods of fighting climate change the right way to approach the problem?

The goal itself is commendable and important to achieve, but we should not sacrifice consumer choice and freedom to it. Every policy should be examined through the lens of consumer choice, and it should be at the centre of every climate strategy. 

Unfortunately, governments have opted for the combination of restrictions, taxes and bans to tackle climate change. This is quite a costly strategy, and consumers will have to carry the burden of it. For example, to cut carbon emissions, the EU is planning to ban motor vehicle sales from 2030. Motor vehicle drivers are already some of the most heavily taxed consumers. Fuel, ownership, registration and CO2 based taxes are just a few examples of what motorist vehicle drivers have to deal with and now the EU is taking on an even more radical approach. 

Arguably, one of the most disputed parts of the EU’s Green plan is the creation of a sustainable food system, with little to no reliance on pesticides and incentivising organic farming. Green activists demonise pesticides branding them as” dangerous”. According to the Food and Agriculture Organisation of the United Nations (FAO), without them, the farmers would lose 30 to 40 percent of their crops. Organic farming has low yields, whereas to feed the ever-growing population we need to increase our food production. However, in the case of organic farming, we would have to put more land for agricultural production, which can only be achieved through deforestation which naturally hurts the planet, and which is also what COP26 attendees commit to end. These climate strategies are inconsistent and chase their own tail.

Electricity and heat production account for around 25% of global greenhouse gas emissions. Policymakers are pushing for alternative renewable energy sources, like solar and wind powers, but continue to dismiss the many advantages of nuclear energy. Nuclear power has been pushed to the background because of its bad reputation and accidents such as the Chernobyl nuclear explosion (which was the result of poor management and not nuclear per se). Multiple studies have shown that risks associated with nuclear plants are low and keep declining.

Strategies that policymakers have elaborated entail many false assumptions. Instead of practicing losing combinations of restrictions, bans and taxes, embracing innovation in the above-mentioned sectors would be the right thing to do. Giving innovative technologies a chance is the only way to combat climate change and not leave consumers on the losing end.

In the next blog posts, we will dive into the agricultural, mobility and energy sectors and lay out the Consumer Choice Center’s recommendations on how innovation should drive us forward as we look for the best solution to the climate change dilemma.

October 2021

This October the CCC team has been hard at work, fighting for consumer choice all across the world. Here are some of the highlights from the past month we’d like to share with you


“One Size Fits All” Does Not Fit All

Our North American affairs manager, David, recently authored a new policy note, where he makes the case against the “one size fits all” approach, which is often used by various governments. He highlights multiple instances where this approach failed consumers and explains reasons as to why.
READ HERE

Impact of the flavour bans in the USA

Yael recently presented to a virtual Vape Live event hosted by Vapouround Magazine.He talked about the United States Vaping Index, the impact of flavour bans in the USA, and touched upon all the work the CCC does in this field.
WATCH HERE

EU-mandated common chargers will harm innovation

Recently, the EU unveiled its plan to harmonise charging ports across all electronic devices. Although their intentions are, as ever, noble, mandating one specific technology isn’t the way to go. In this blog post, Anna argues that the EU should practice technology neutrality and leave it up to the companies and consumers to make the ultimate choice of which charging port they want to use.
READ MORE

Catch up on the latest episodes of the ConsEUmer podcast

This month, for the first time, the ConsEUmer podcast was co-hosted by our communications manager, Fabio. Bill and Fabio discussed some of the current issues concerning the European Union, such as Brussels vs. Uber, rising inflation in Europe, and common chargers. Sounds interesting, right?
LISTEN HERE

Digital economy minister fighting to legalise vaping in Thailand

The digital economy minister of Thailand, Chaiwut Thanakamanusorn, wants to legalise vaping to address the high number of smokers in Thai society. Vaping has been proven to be 95% less harmful than smoking and it is important that people looking to quit smoking have access to safer alternatives. In this blogpost, Yael commends the minister’s efforts and hopes that Thailand will embrace the science of harm reduction.
READ MORE

Save the date for our upcoming webinar on illicit trade

The webinar will be held on November 10 and will focus on the current challenges posed by illicit trade and existing opportunities for intervention. Our speakers will examine restrictions on marketing and branding to see how those affect illicit trade. If you want to know why illicit trade is flourishing, what the main drivers of it are, and what can be done to tackle it, then you are at the right place!
LEARN MORE
That’s a wrap for October! Be sure to follow us on our social media channels for all of the latest updates in our global fight for #consumerchoice! We’ll see you next month!

Sharing Economy Index and its results – SHARING ECONOMY SERIES, PART 4

Welcome to the CCC’s sharing economy series. In this series of short blog posts, I elaborate on what the sharing economy is, present the main findings of the Sharing Economy Index, and look at potential future regulations surrounding these services. 

The Consumer Choice Center recently published the Global Sharing Economy Index 2021, which evaluates 50 cities around the world based on the availability and accessibility of sharing economy services. The index is a one-of-its-kind compilation of applications you can use to improve your city experience and analyses how regulated these services are in each city (whether you need a special permit to operate an Airbnb business or if there are additional taxes levied on the guests).

In the early years of Uber, to become a driver you only needed a car, driving license, and simple registration on their website. As driving Uber did not require special permits or taxi licensing, which can be quite expensive to acquire in certain countries, it allowed Uber to offer the same services at a much lower cost. 

However, according to the index results, as of today, out of 50 cities, there are only a few ones left that don’t require a special permit. In France for example, in order to operate Uber, you have to get a VTC card first (VTC is a French acronym for private chauffeur services that are different from taxis), and registration for the exam will cost you around 200 euros. Becoming an Uber driver might be more complicated now, but it remains a lucrative business and a big competition to traditional taxi services. Which, as we already saw in the previous blog post, isn’t something that taxi drivers are very happy about.

Another shared service discussed in the index, e-scooter, is an affordable and quite fun means of transportation, available in 43 out of 50 cities. Recently, most cities have been trying to regulate e-scooters by banning them from sidewalks, setting speed limits, or introducing a fine system for parking at the wrong locations, as in the case of Norway. Some cities, like Athens, went as far as permanently banning e-scooters altogether, only allowing private ownership of electric scooters.

Interestingly enough, Eastern European countries enjoy more freedom when it comes to sharing economy services. First place in the ranking was shared by post-soviet cities Tallinn and Tbilisi, where not only all the discussed services are available, but they are also less regulated. On the other hand, Western and Central European countries seem to have taken more restrictive approaches, therefore limiting consumer choice. For example, as if covid wasn’t already destructive enough to sharing economy services, Amsterdam decided to ban Airbnb in its historical centre, a decision that was fortunately overturned by the court.

Even in the light of current efforts from governments to regulate this sector, we can say that the sharing economy is here to stay. People have come to appreciate and get used to the comfort and convenience these services bring to our everyday lives. So no matter what new restrictions the governments around the world come up with, we can leave it to the creativity and entrepreneurial spirit of this industry to fight back and readjust.

The EU mandated harmonisation of charging ports will negatively impact innovation

Last month, the European Commission unveiled its plan to harmonise charging ports for electronic devices. With the new legislation, USB-C will be the required standard port for all smartphones, cameras, tablets, headphones, portable speakers, and video consoles. When the EU first proposed a common charger in 2009, they believed it would be the micro-USB standard.

The EU claims that this approach is needed to solve ‘consumer inconvenience’ and tackle the e-waste problem, but that logic falls short of making sense. This regulation will have a negative impact on innovation, do nothing to help the environment, and consumers will end up being the ones who have to foot the bill. The best thing the EU can do to help consumers and not impede innovation is to stay technology neutral.

Even though USB-C seems like the most efficient charger at the moment, we can’t predict how this technology will develop in the future. For example, in 2009, when the European Union first proposed a common charger, micro-USB was considered the standard Had this common charger been passed then, would European consumers have lost out on the now more-popular USB-C devices that are the new standard? Time has shown us that there are always better and more efficient technologies waiting in the wings. By legislating one common charger, the EU will be responsible for delaying innovation that will deprive consumers of choice not only now, but in the future. Adopting this proposal by the European Parliament and the Council could take many more months, by which time many companies may even find better solutions than what is currently proposed.

With fast-developing technology, there’s no guarantee that USB-C will still be considered the most efficient charging technology even months from now. Plus, as more and more companies are experimenting with wireless chargers it is very likely that charging cables will become obsolete. If this proposal is accepted, companies will be forced to provide the plug anyway. 

When Apple decided to drop the headphone port for iPhones in 2016, many were skeptical about the move. But consumers eventually came to appreciate wireless technology and not having to deal with wires that always mystically entangle the moment you put it in the pocket. Had the EU or any other government body tried to intervene and fix the “inconvenience”, we probably wouldn’t have been able to enjoy the benefits of them.

More disturbingly, this decision specifically targets Apple, the only company that uses a unique lightning cable for its products. Considering how many iPhone users exist in Europe, this proposal would have an immediate impact, forcing users to trash their existing wires and have to purchase new ones. It is hard not to be skeptical about this move. Innovators will keep innovating and we have new and improved versions of the products that pop up in the market almost daily. What we need is more competition, which is the main driving force behind innovation. Common charger mandates will do nothing but infringe on this entrepreneurial spirit, and mandate technology that will likely soon be obsolete. 

With this proposal, the EU is choosing favourites and endorsing a specific technology, when in reality it should be practicing technology neutrality. Rather than force companies to adopt a commission-favoured solution, the EU should simply issue general recommendations, leaving it up to the companies and consumers to make the ultimate choice of which charging wire they want to use.

Sharing economy under threat – Sharing Economy Series, part 3

Welcome to the CCC’s sharing economy series. In this series of short blog posts, I elaborate on what the sharing economy is, present the main findings of the Sharing Economy Index, and look at potential future regulations surrounding these services. 

The pandemic isn’t the only obstacle sharing economy platforms have had to face for the past several months. Governments around the world have introduced new regulations that have been detrimental to consumer choice. Compared to the time when the platform economy was only starting its way into our daily lives, ride-hailing apps today are subject to many more restrictions. Some of these new interventions include employee classifications, social security, parking requirements, or outright bans. 

One of the main aspects of ride-sharing that governments are trying to redefine and regulate is the relationship between service providers and drivers. Uber and other platforms treat drivers as contractors, rather than employees, but to some such an approach is unfair.

Drivers’ inability to set fares, penalties for cancelling rides, and customer engagement restrictions are among the main reasons why drivers can be seen as less independent than believed. However, on the other hand, contractor status gives drivers more flexibility and the chance to choose their own working hours. They can work for different ride-hailing apps at the same time, which would become impossible should full employee status be given to drivers.

Uber has been involved in many legal battles to protect drivers’ independence. Recently, the supreme court of the UK ruled that Uber drivers should be granted employee status and benefits that the status entails, like paying minimum wage and paid annual leave. This will likely increase the ride fare around the country.

This is not the first attempt at restricting Uber though. After protests of London black cab drivers, the transport regulation body TfL was pressured to introduce new restrictions on Uber. Some of these restrictions included a 5-minute wait between rides, which would have affected the delivery of service and, as Uber claimed, taken money out of drivers’ pockets. A petition against this restriction was signed by over 130,000 people and, fortunately, TfL decided to drop it. 

Brussels took a different yet equally restrictive path. The Belgian capital recently has even gone as far as banning app-based taxi systems, the essence of ride-hailing itself. This comes after pressure from the traditional taxi drivers, who were urging the government to regulate app-based ride-hailing that was becoming harder and harder for them to compete with.

Drivers who continue to accept trips via their smartphone face a risk of getting fined or having their license revoked. While Uber hasn’t been explicitly banned, countries like Denmark and Hungary have made it impossible for Uber to operate there and have practically forced the company out of the market. 

Across the ocean, the state of California has also been debating over the drivers’ status. Passed in 2020, Assembly Bill 5 (AB5) was meant to reclassify independent contractors as employees. According to the bill, ride-hailing and delivery services platforms would be required to offer multiple benefits to their drivers. This would have cost Uber and Lyft billions of dollars and increased the cost of ride-sharing services, making it increasingly unaffordable compared to traditional taxis.

Ride-hailing and delivery services platforms wanted to be exempt from granting worker-level benefits to their workers and threatened to suspend their services in the state of California. For example, it costs almost 2x more to catch a traditional taxi from LAX to Hollywood and with no more ride-hailing available, consumers would be left with fewer and more expensive options.

Proposition 22 was included in the November 2020 election ballot and passed with around 57% of California voters. This proposition allowed drivers on these apps to maintain their independent status with certain qualified benefits. But the California court recently ruled Proposition 22 unconstitutional, so it seems like the legal battle is far from being over. It is very likely that other states will follow the example of California which will put the fate of the ride-hailing in jeopardy.

Overall, even though ride-hailing services have made life easier and cheaper for consumers around the world, governments keep yielding to pressures mainly from traditional taxi industries and introducing regulations and restrictions that could potentially lead to the suspension of ride-hailing services.

The cases of the UK, Brussels and California discussed in this blogpost demonstrate a dangerous precedent for countries and cities around the world. If this trend continues, soon ride-hailing will no longer be any different from traditional services and the essence of the sharing economy will be lost. And, of course, consumers are the ones who will have to bear the burden of restricted choice.

Sharing economy in COVID-times – Sharing economy series, part 2

Welcome to the CCC’s sharing economy series. In this series of short blog posts, I elaborate on what the sharing economy is, present the main findings of the Sharing Economy Index, and look at potential future regulations surrounding these services. 

The current pandemic has had a huge impact on the delivery of sharing economy services. As was discussed in the previous blogpost, online platforms have demonstrated exceptional adaptability and have gone above and beyond to make sure consumers continue to see value in using them. 

While some sectors of the sharing economy, like ride-sharing and home-sharing, have suffered immense losses due to strict lockdowns around the world, others have increased their profits and proved to be invaluable. For example, delivery apps became an essential part of our everyday lives. With restaurants being closed, the fear of virus transmission, and difficulty of travelling due to transport restrictions, we found ourselves relying on delivery services. 

To avoid human interaction at the delivery point, Doordash, an online food delivery platform, like many others, introduced a contactless delivery option that can be requested both by the customer and the deliverer. According to Statista, in the second quarter in France, restaurant delivery users increased by 24% compared to pre-pandemic numbers. In the US, delivery companies also reported growth in their revenues. Combined revenues from the four major delivery companies, Uber Eats, Doordash, Postmates, and Grubhub, from April-September 2020 was double the amount during April-September 2019.

Professional car-sharing services experienced a huge drop in demand during lockdowns, but once people started to get back on the move rather than opt for public transportation they placed more trust in car-sharing services as it entails low risks of virus transmission. Share Now increased their hygiene measures, and they have been cleaning and disinfecting their cars four times more than usual. Peer-to-peer car-sharing platforms, like Turo and Getaround, have also bounced back from pandemic-related setbacks. To reassure people into using their services again they eased cancellation policies and introduced additional cleaning measures.

As demand for services dropped drastically, many companies had to cut losses. Uber, for example, had to lay off thousands of employees to reduce operating expenses, most of those employees being customer service agents, and had to close 45 offices globally. Lyft, another ride-sharing company and Uber’s biggest rival, had to let go of 17% of its workforce.

To comply with new covid restrictions introduced by the local governments, Uber and Airbnb changed and adapted their processes. Uber made it obligatory to wear masks while riding, and before ordering a ride, you have to confirm you will be wearing a mask during the ride. Airbnb introduced additional safety measures and made it a requirement for hosts to carry out a 5 step cleaning process between the guest stays. 

Overall, despite the doom and gloom of the pandemic, the sharing economy managed to survive and continue to innovate. These unprecedented times were more challenging for some than for others. While some services, like ride-sharing and home-sharing, had to lay off a significant amount of their workforce, delivery platforms saw record-breaking demand for their services. 

The next blogpost in our series will discuss some of the controversies surrounding sharing economy platforms and how governments are trying to regulate this innovative sector.

Scroll to top