Extra Money or Extra Trouble

Do you have a car and extra time? If yes, monetise it through UBER

Do you have a house, an extra room, and little extra time to take care of host? If yes, monetise it through AirBNB

Do you have any skill (or willingness to work) and extra time? If yes, monetise by becoming a taskmaster or what they call becoming a Rabbit through TaskRabbit 

Okay, neither you have any assets like a car or house or tools to lend for rent nor you have any specific skills, well you might have some extra time and definitely have a smart phone. You can still monetise your time by helping online markets to categorise products.

But what if you do not have EXTRA TIME, then I would say you are LUCKY.

Lucky that you have a regular job, lucky that you are pursuing something important, lucky that you are not running for your next customer, lucky that you are not having breakfast with a stranger, lucky that your skill is used for some productive work, lucky that you have earned more than $1.53 an hour instead of categorising things and absolutely lucky that you do not need to worry about your Insurance or Pension or Social Security Fund because your employer is taking care of it.

Rightly guessed!!!! I am talking about Sharing Economy, the new norm of earning money through temporary employment and becoming an entrepreneur, rather than doing 9 to 5 job and working for others.

In the book ‘RAW DEAL: HOW THE 'UBER ECONOMY' AND RUNAWAY CAPITALISM ARE SCREWING AMERICAN WORKERS’, Steven Hill describes the perils of the Sharing Economy with few benefits and highlights the possible solutions. Once we get used to the new technology it is very difficult to go back. I do not think I can live without Googling things or can reach anywhere without Google Maps directions. The Sharing Economy has not only become the new norm but have become a part of society which we have got used to and have also become a part of our vocabulary GOOGLE IT, TAKE A UBER, AirBNBED ROOM, CALL A RABBIT……

In the first few chapters I was petrified, horrified, terrified, calcified, and intimidated by ‘1099 Economy’. 1099 Economy is about the workers, the gig-preneurs/micro-entrepreneurs, who are not employed by any company but use sharing economy platforms like UBER to find customers and their income is classified under 1099 form rather than the W-2 form for regular employees. With this income classification the gig-preneurs get away with less taxes and the platforms get away with taking care of employee’s pension, social security and taxes too. It is approximately 30 per cent cheaper for the companies to hire employees under contract rather than offering full employment.

The working conditions for these contract employees is very substandard and they are not guaranteed future employment or health care benefits if they meet with an accident during work. It is choice between unemployment and some income for employees, and for companies it is cost effective and may be compromising on quality. So ‘1099 Economy’ is mostly loss-win situation or loss-loss situation or it is Capitalism in its purest form.

In the following chapters Steven Hill gives a critical account of the emerging entrepreneurs like Travis Kalanick CEO of UBER, Brian Chesky CEO of AirBNB, and Leah Busque CEO of TaskRabbit and their business, who despite appreciating the benefits of Sharing Economy, encouraging people to participate, and expanding their business are aware of the fact that they are causing more harm than benefits let alone the n number of lawsuits and oppositions these companies are facing. Most of the gig-preneurs are making less than minimum wage with no future security or benefits.

Like any traditional business these businesses are here in the market to make profit, where they are going wrong is the non-traditional way of earning income by just providing platform to connect buyers and sellers, not producing any products or services, and employing, but not technically employing, the employees by taking no responsibility if some unfortunate accident happens. Keeping up with the latest news UBER has suspended its operations in Hungary after the new law is passed by the Prime Minister Viktor Orban to block internet access to “illegal dispatch of services”. The company has not been is good books of the local governments as the governments think that UBER is getting away with following rules and regulations.

Steven Hill also appreciates few aspects of Sharing Economy like environmental benefits by reusing the unused goods  and connecting people for mutual benefits. After reading more about the booming Sharing Economy/Collaborative Economy in Europe continent and the platforms like Eat With, Time Bank, Clothes library and Bla Bla Car, it looked to me like we are going back to Barter System trade where we will no longer be using the currency/medium of exchange but will be exchanging goods/services against goods/services. But then how would I calculate Gross Domestic Product, the total value of goods and services produced within a country, if there are no goods/services produced but only exchanged (It would be an interesting time to become an Economist :) ). But then I recalled that going back would be difficult or next to impossible especially when we understand buying goods/services is paying money and not exchanging goods/services.

The author also provides solutions for the EXTRA TROUBLE for EXTRA INCOME or to deal with the RAW DEAL. The solutions such as multiemployer plan, vocational training, health care would mostly require the collaborative efforts of government, sharing economy entrepreneurs and gig-preneurs. It will take a long long time to pass many many legislations which Steven Hill would like to call Maria Fernandes Matters Act, but till then I wish the Sharing Economy remains only about sharing and benefiting.