What if uberization had not waited for the emergence of digital platforms?

by bold-lichterman

The growth of digital platforms, celebrated by consumers and criticized by certain traditional players, worries all those who accuse them of destroying jobs and replacing them with “precarious” forms of activity. These detractors of the new economy, however, forget two realities.

The first is the potential for job creation (direct and induced) and wealth associated with these platforms.

The second refers to the economic sectors in which these platforms are developing: passenger transport, delivery services, accommodation and catering, etc. Here are some examples of activities affected by the “uberization” phenomenon. In these sectors, atypical work has been used for a long time and sometimes even the norm. The platforms did not therefore invent, far from it, the model derogating from full-time permanent contracts. Better still, they could on the contrary play a decisive role in the invention of the social model of tomorrow, favorable to employment and respectful of people.

A lever for employment

“Uberization” defines situations where historical intermediaries find themselves competing with digital platforms that put “the consumer” in direct contact with “the producer”. Intermediation is not disappearing, but is changing in nature: an expensive and relatively labor-intensive infrastructure is replaced by a semi-automated service, which takes advantage of the technological innovations of recent years.

Of course, this dynamic poses a considerable transformation challenge for traditional intermediaries and part of their businesses. However, contrary to some alarmist predictions, the creation of jobs or activities does more than compensate for the potential job losses.

The call for fresh air created by the emergence of platforms is evident in transport services to individuals: the rise of passenger vehicle services with driver has created ten thousand jobs over the past three years. Likewise, rapid delivery services, often provided by bicycle couriers, are growing exponentially in large cities. However, they do not replace any existing jobs and offer immediate and new sources of income to populations who are unwilling or unable to work full time. In the United States, students account for 25% of the collaborators of these platforms.

In general, nearly 200,000 French auto-entrepreneurs already use the services of platforms to find assignments. Faced with endemic unemployment and the crisis of the classic salary model, the development of self-employment and the missions offered by the platforms are a solution before being a problem. 90% of the jobs created in the United Kingdom in 2013, at the end of the crisis, did they not benefit the self-employed?

Uberization of jobs before Uber

Critics of the new economy also blame platforms for substituting precarious jobs for stable jobs. This second received idea, more widespread, invites us to recall some fundamentals.

Let us look at the sectors “uberized” or likely to be. Despite their apparent diversity, these service activities have one thing in common: the fluctuating, unpredictable or cyclical nature of customer demand has always imposed forms of work organization that are far removed from the traditional full-time permanent contract. Two examples:

  • In the taxi industry, four different statuses are available to drivers, but 80% opt for self-employed status, only 3% are employees.

  • In hairdressing too, the disappearance of 10,000 employees since 2002 has been almost entirely offset by the development of self-employment. What if he too saw himself affected by uberization tomorrow?

Platforms, breeding ground for social innovations

In this story, the platforms therefore mark less a rupture than a change of scale. This situation is in our opinion an opportunity to be seized. The uberized professions could formerly live in a gray legal zone, sheltered from major social and economic innovations. In addition, these were often sectors in which practices bordering on the law flourished.

This is no longer possible today. The platforms, by their growing size, the standardization of the practices they allow, can serve as a springboard for the implementation of protections and tailor-made support for self-employed workers. Our conviction is that this social responsibility of platforms will be the key to their development and their future sustainability. The major challenge is therefore to find the right balance between entrepreneurial freedom, job development, protection of individuals and respect for social accounts. Here are some rules that seem to us to contribute to this objective:

  • Avoid wanting to fit at all costs the diversity of new forms of activity into the narrow clothes of salaried workers; introduce, under conditions to be defined, a presumption of non-employment for platform employees.

  • Define protection principles (training policy, insurance, etc.) rather than uniform rules.

  • Establish a simple system for collecting social security contributions, which could for example be managed by the platforms themselves, thus becoming trusted third parties.

Our startup ecosystem is one of the most dynamic in the world: let’s clearly give ourselves the means to exploit the unprecedented potential of the new economy, in terms of innovation and growth!

tribune-uberisation-sept2016-2Benjamin chemla is the founder of Stuart, an on-demand delivery service for businesses, and a member of the Uberization Observatory.

Gregoire Leclercq is president of the federation of autoentrepreneurs, and co-founder of the Uberization Observatory