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Ride-sharing

Sharing economy in the post-COVID world: what’s new?

In May, the Consumer Choice Center published the first-of-its-kind Sharing Economy Index, ranking the best and worst cities in the world for regulations on sharing economy services. The top 10 cities according to the index are Tallinn, Vilnius, Riga, Moscow, St. Petersburg, Warsaw, Kyiv, São Paulo, Tbilisi, and Helsinki. On the other hand, the cities of Prague, Dublin, Amsterdam, Bratislava, Ljubljana, Sofia, Tokyo, The Hague, Luxembourg City, and Athens found themselves at the very bottom of the list.

For better or worse, the world isn’t static: there have been some new developments in the field of sharing economy in the last few months. Many governments have used the pandemic as a precondition to hinder innovation, and yet platform businesses persisted and tapped the demand that challenges brought about by lockdowns and responded with creativity.

Let me start with some good news.

The UK legalises e-scooters

Electric scooters will become legal on roads in England, Scotland and Wales beginning in July if obtained through a share scheme endorsed by around 50 municipal councils. The scooters will be limited to travelling at 15.5mph (25kmph) and forbidden from use on pavement and sidewalks.

UberEats has been killing it during the pandemic

In the first quarter of 2020, Uber Eats revenues went up by more than 50 per cent globally. Uber Freight – an app that helps carriers make hassle-free bookings and allows shippers to tender shipments easily – grew revenues by 57 per cent. In July, Uber also launched a grocery delivery service, partnering with grocery delivery startup Cornershop.

Bolt is now available in Thailand

Today, Bolt, a competitor of Uber, announced that it has rolled out its services in Thailand. That’s a huge win for Thai consumers and riders.

Bolt said its pilot venture in the Thai capital has more than 2,000 drivers already on board and will offer better rates to drivers and riders.

“For a minimum of six months, Bolt in Thailand commits to charging drivers no commission for using the platform and offers fares 20% lower than other competitors,” the Estonian company said.

… And now some bad news. 

Amsterdam regulates Airbnb further

In June, Amsterdam banned short-term accommodation rentals including Airbnb from operating in the three districts of its historical centre.

In other areas of Amsterdam, Airbnb will face new regulations too: hosts must acquire special permits, and renting out their apartments will only be allowed to lease to short-term tenants for 30 days out of the year to groups of a maximum of four people.

Amsterdam was one of the least sharing economy friendly cities, according to our Index, and this new policy only pushes it further down the list.

Lisbon wants to get rid of Airbnb

In June, Lisbon mayor has pledged to “get rid of Airbnb” once the coronavirus pandemic is over.

As part of the affordable housing plan, landlords afraid of their apartments lying empty can apply to rent them to the municipality, for a minimum term of five years. The city, in turn, will be responsible for finding tenants, through the programme targeted at young people and lower-income families.

Uber to face more legal battles in London

A dispute over whether its drivers should continue to be classified as self-employed has begun in the U.K.’s Supreme Court. In a second legal clash scheduled for September, Uber will appeal the loss of its operating license in the UK’s capital.

Despite grim predictions at the beginning of the pandemic, the sharing economy has survived though not without any losses. As with every service that has made our lives easier, platform businesses are extensively enjoyed by millions of consumers globally. Now that we know how great it feels to be able to ride an e-scooters, to rideshare, or to share a flat with locals, governments will have a hard time trying to rid us of those choices. The sharing economy is driven by creativity and entrepreneurship: what doesn’t kill it, makes it stronger.

The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

As Predicted, California’s Gig Economy Labor Rules Are Already Backfiring

Back in September, the state of California passed AB5, the law requiring all companies using contract workers in the state to treat them as employees.

Labor activists and unions were insistent that this law was necessary to provide security and stability to the thousands of contractors and gig economy workers throughout the state.

At the time, we warned it would be very harmful both for consumers and contractors. Our comments were featured in a Mashable article, as well as hosted on our website. Now, it seems it panned out, unfortunately.

Because of the stricter regulations on companies based in the state, various media outlets have announced they would be laying off thousands of freelance and contract workers they can no longer afford to employ.

Specifically, Vox Media, who called the law a “victory for workers everywhere“, announced it was parting ways with all of its California-based freelancers.

The layoffs are, of course, unfortunate. No one supports large and systematic firings, and certainly not in the news media, a vital industry to our democracy. But the economic trends in journalism have been negative for several years.

However, at the same time, it’s important to note that these kinds of laws, those that seem the most well-intentioned, actually end up having very detrimental effects.

That’s a lesson for practically every piece of legislation, and why we will continue to be active at the Consumer Choice Center. Laws have consequences that are very real and impact people’s lives.

Let’s hope California can clean up its act and allow freelancers and contractors to make a living without too much interference.

Is the gig economy bill a disaster or triumph for ride-hailing? Depends on who you ask

Uber and Lyft have been warning drivers about the end of flexible schedules, and passengers about more expensive rides that take longer to arrive, all thanks to a California bill that passed this week. 

But drivers and other gig workers are celebrating what could be a pathway to fair pay, benefits, and other employee rights, which some claim will come at only a slight cost to riders.

After the bill, called AB5, makes its way to the governor’s desk, it should go into effect on Jan. 1, 2020. It would make companies reclassify many independent contractors as employees, something Uber and Lyft have opposed. 

While this would directly affect drivers and other gig economy workers, like the 200,000 in California working for Uber, the people who use the apps could also see changes. 

The New York Times cited “industry officials” who say costs for companies like Uber and Lyft could rise by 20 to 30 percent because of AB5. Other industry experts like Michael Droke, a partner at Dorsey & Whitney in California, a law firm that has represented big companies like 3M and Wells Fargo in labor disputes, also sees costs going up for companies and prices going up for riders. 

“Many industries rely on independent contractors to deliver products and services, from food delivery to software coding and design. Those workers will be converted to employees, significantly increasing the cost of the products and services,” Droke said. 

Yaël Ossowski, deputy director of the Consumer Choice Center, which supports deregulation, said the law could force people to “seek out alternatives.” Instead of ordering a cheap ride, he thinks people will be forced to do things like carpool, hail a cab, or find a nearby bus.

Read more here

California’s effective outlawing of contractors will make consumers worse off

California’s effective outlawing of contractors will make consumers worse off

Sacramento, CA – On Tuesday, the California State Senate voted in favor of AB 5, requiring all companies using contract workers in the state to treat them as employees. Gov. Gavin Newsom is expected to sign the bill.

Yaël Ossowski, Deputy Director of the Consumer Choice Center, responded to the law’s passage:

“The proponents of this bill are celebrating the fact that they’re all but shutting down the prospects for the entire sharing economy and thousands of other industries in California,” said Ossowski. “The plain fact is this will hurt more people than it purports to help, depriving consumers of the innovations that have made their lives better and more prosperous.

“That includes home deliveries, home healthcare, ride-share, handyman apps, antique selling, and thousands more businesses and applications that millions of contractors and even more consumers have used,” said Ossowski.

“State Sen. Maria Elena Durazo said this proves lawmakers are “determining the future of the California economy.” She’s right. And they’re doing it by stamping out innovation. It will ultimately be California’s sharing economy consumers who foot the bill for this heavy-handed intervention, as well as anyone who relies on contracting work to get by.

“The entire gig economy has grown and been successful because it offers alternatives to consumers and workers alike, who all benefit. Changing employment law to make certain business relationships illegal will deprive millions of people of the opportunity of using these services, and cause even more repercussions for those who rely on them, both consumers and workers.

“California’s move is heavy-handed, paternalistic, and favors the monopoly of larger traditional companies more than people who rely on this new sector of our economy. That’s a shame,” said Ossowski.

A Consumer Choice Center survey from March 2019 found that 72% of Americans believe the government should protect the freedom of choice for consumers.

The same survey found that 69% of Americans think policymakers don’t spend enough time listening to consumers before proposing new regulations.

More information can be found on our website.


***CCC Deputy Director Yaël Ossowski is available to speak with accredited media on consumer regulations and consumer choice issues. Please send media inquiries HERE.***

—The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org.

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