Gate­keep­ers re­quired to tackle dis­rup­tion from ‘gig’ econ­omy

China Daily (Hong Kong) - - COMMENT - Har­vey Mor­ris The au­thor is a se­nior ed­i­to­rial con­sul­tant for China Daily UK. Con­tact the writer at har­vey­mor­

The seem­ingly in­ex­orable ad­vance of the so-called gig econ­omy hit a mi­nor bump in the road this month when taxi-hail­ing com­pany Uber lost its li­cense to op­er­ate in Lon­don, one of its big­gest mar­kets. Trans­port for Lon­don, the in­dus­try reg­u­la­tor in the Bri­tish cap­i­tal, said a num­ber of neg­a­tive fac­tors, in­clud­ing Uber’s fail­ure to make ad­e­quate back­ground checks on driv­ers, meant it was not a fit and proper com­pany to hold a pri­vate ve­hi­cle hire li­cense.

No doubt in the hope of re­solv­ing the spat with the reg­u­la­tor, Dara Khos­row­shahi, the new CEO of the Cal­i­for­nia-based com­pany, opted for con­tri­tion. In an in­ter­nal memo to em­ploy­ees, he ac­knowl­edged “there is a high cost to a bad rep­u­ta­tion”.

“It’s crit­i­cal that we act with in­tegrity in ev­ery­thing we do,” he wrote. “And learn how to be a bet­ter part­ner to ev­ery city we op­er­ate in.”

That is al­ready a bit of a climb down for the rep­re­sen­ta­tive of one of the main Sil­i­con Val­ley tech­no­log­i­cal in­no­va­tors whose un­of­fi­cial slo­gan is “dis­rupt first, ask ques­tions later”.

As the in­ter­net-driven gig econ­omy has come to dom­i­nate a whole range of goods and ser­vices — from books and gro­ceries to fast food de­liv­er­ies and taxi rides — “dis­rup­tion” has be­come a buzz­word.

Throw­ing ex­ist­ing ser­vice struc­tures up in the air and see­ing what comes down may not be the most sci­en­tific model. How­ever, it prom­ises huge po­ten­tial re­turns to the in­vestors in dis­rup­tors that are suc­cess­ful at the ex­pense of tra­di­tional providers.

Gig in­no­va­tors por­tray them­selves as re­fresh­ingly New Age and lib­er­tar­ian as they prom­ise to free con­sumers and work­ers from the con­straints of the old econ­omy. “Flex­i­bil­ity” is a word of­ten ap­plied to their low-in­come, free­lance work­ers who are told they now have the free­dom to work only when they want to. In re­al­ity, this flex­i­bil­ity mainly fa­vors the op­er­a­tor, who de­ter­mines how much work is ac­tu­ally avail­able.

An up­surge in self-em­ploy­ment in coun­tries such as Bri­tain — al­most 5 mil­lion peo­ple at the last count — may have more to do with the ab­sence of se­cure jobs than with an in­nate de­sire of low-paid work­ers to “be their own boss”.

How­ever, in an­other phrase that could also be the un­of­fi­cial slo­gan of the gig in­no­va­tors, “you can’t stop progress”.

The new eco­nomic model is too far ad­vanced to be re­versed by iso­lated reg­u­la­tory dik­tats. The gig rev­o­lu­tion has spread well be­yond Sil­i­con Val­ley to in­fil­trate the global econ­omy and in­spire com­peti­tors.

In Lon­don, Uber was al­ready fac­ing com­pe­ti­tion from Tax­ify, an Es­to­nian taxi app backed by China’s car-book­ing group Didi Chux­ing. Ac­knowl­edg­ing that com­pa­nies must take into ac­count the views of regulators, CEO Markus Vil­lig promised: “The safety of rid­ers is Tax­ify’s top pri­or­ity and we are cur­rently work­ing with (Trans­port for Lon­don) to en­sure we com­ply with all of their reg­u­la­tory re­quire­ments and safety stan­dards.”

The gig econ­omy has brought un­doubted ben­e­fits to con­sumers in terms of con­ve­nience and pric­ing and has cre­ated many new jobs, de­spite the con­cerns about their se­cu­rity.

But there will al­ways be a need for gate­keep­ers in the shape of regulators, who are re­spon­si­ble for mak­ing sure that con­sumers and work­ers do not suf­fer the un­in­tended con­se­quences of gig-style dis­rup­tion.

In the face of a tougher reg­u­la­tory cli­mate, Airbnb, the book­ing com­pany that al­lows vis­i­tors to ar­range short-term stays in pri­vate res­i­dences, an­nounced re­stric­tions this year on the use of its ser­vice in Lon­don. One un­in­tended con­se­quence of such hol­i­day rental ser­vices had been to re­duce the sup­ply of homes for or­di­nary Lon­don­ers.

Per­haps the Airbnb move and the readi­ness of Uber to ne­go­ti­ate with the regulators are an in­di­ca­tion that the gig econ­omy is ma­tur­ing. Eth­i­cally ex­am­in­ing the likely con­se­quences of in­no­va­tion may even­tu­ally over­take the dis­rup­tive gig mantra of throw­ing ev­ery­thing up in the air and watch­ing it come crash­ing down.

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