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6 July 2015

Sharing Economy Divided: Why I side with the taxi drivers

Written by: Satyen Dayal, Senior Director at Edelman

Government Affairs, Innovation, Technology

I side with the taxi drivers not because I condone violent protest, and neither because I believe Uber is wrong. In fact, I believe Uber is a system that is very right. But the brilliance of this system also explains the rage of the French taxi drivers. Their rage is against a machine that offers significantly lower fares by turning anyone with a car into their competitor. According to Business Insider, the machine pays its drivers less than the minimum wage, has only reached a fraction of its potential and is growing incredibly fast.

Uber is a disruptive force unleashed on a population of French workers who survive on an annual income of €33k/£23k per year (against an average of €38k/£26k). The foundations of this disruption lie in the Sharing Economy, a model that Rt Hon Matthew Hancock MP (Minister for the Cabinet Office and Paymaster General) observes has spread across sectors including food, fashion and consumer electronics. In a report he commissioned, ‘Unlocking the Sharing Economy’, author Debbie Wosskow offers insights and ideas on how the UK can embrace this new opportunity.

Wosskow makes many sound recommendations, but one thing that struck me is a potential disproportionate weighting between traditional and sharing economics. For example, in looking at the impact of regulation in the ‘property sharing’ market (ala AirBnB), she notes how someone renting out a spare room a few nights a year should not be subject to the same level of regulation as a business renting out 100 rooms all year-round. That sounds fair in practice.

However, as is the case with the taxi versus Uber drivers, the hotel owner and landlord are not competing against one another. The 100 room hotel is competing against a system that offers thousands of rooms from any building in the vicinity, and at a fraction of the price.

In my opinion, the Sharing Economy is (rightly so) disproportionate by design. It is a digitally-led transformation that will ultimately offer an unimaginable scale of resource to business and society. The system will achieve this by drawing upon the capabilities of practically everyone and everything on the planet – at anytime. In doing so it has and will continue to address a series of economic constraints ranging from rising costs to decreasing productivity, wasted resources and a 40 hour week. It is fluid, efficient and effective.

In a few short years, this fluidity has made AirBnB a serious threat to established hotel chains. Indeed, there is a pragmatic beauty in the way a machine can transform time and resources into value. Although, the Sharing Economy represents far more than early digital transformations where Information Technology (IT) made conventional industry and institutional models more effective. This is about IT rewiring the underlying system of all these organisations.

As this digital pragmatism rewires more sectors, the social impact of the decaying, outmoded systems that underpin them should not be underestimated. Within such systems are people who would never have anticipated the changes afoot let alone realised how much it could affect their lives. Critics may argue that, as with other economic shifts of the past, this is about short-term pain for long-term gain, and new jobs do eventually emerge.

But surely if the changes are better planned and communicated, the pain can be significantly lessened if not removed entirely.

Today’s digital transformation has the potential to move us from high-tech, to a ‘higher tech’. Like never before, technology can have a truly profound impact on our lives, and as tech communicators we have the opportunity to ensure it does. This is why we must side with the taxi drivers, hotel workers and anyone else who feels disenfranchised by technology driven revolutions such as the Sharing Economy.

After all, the term ‘Sharing’ implies togetherness, which means no individual or group can be cast aside in this new economic opportunity.

Image by: paula french /

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