For those who haven’t heard it, Collins Dictionary defines the term “gig economy” as the freelance economy, which can be found on online platforms such as Etsy or Uber. It is a service that, according to the South China Morning Post, “enables people to become freelance service providers without the inspections and legal oversight that traditional lodging and cab industries are subject to.” These sites have become increasingly popular of late, and include services such as Etsy, Uber, AirBnB and Hailo, to name but a few. They have grown into a legal conundrum, with many countries seeking to clamp down on tax evasion by their users, with France even banning an Uber service called UberPop. Here in Ireland, AirBnB has come under investigation for a massive, unpaid tax bill to the state.
One of the main problems with it is to do with how tax is paid on items and services sold on these platforms.
Platforms such as Hailo have long established themselves in Irish culture, enabling users to get a taxi at the touch of a button. Users of sites such as Etsy can buy products that may only exist overseas easily, and rent out a room to students or holidaymakers for some extra cash. It is this convenience, coupled with the fact that we are emerging from recession, which has helped these platforms explode.
These apps and sites act as platforms, giving customers who are looking for a product access to someone who has it. It helps inspire people to become small-time entrepreneurs and to earn some cash on the side. It works on the general principle of user-feedback and helps to build a community. So why has it come under investigation by so many different governments?
Another issue is that of plagiarism, which is rampant on sites such as Etsy.”
There was also the issue that certain car-pooling services (namely UberPop) allowed people who didn’t have qualifications to become quasi-taxi drivers. This service was obviously unfair to genuine taxi drivers, who face large fees to get the necessary paperwork and qualifications to become a licensed driver. They were being undercut by these UberPop drivers, who didn’t have the costs of licensing or regulations to drive up their prices, which is why France ultimately banned the service, becoming the first country to do so. Uber have since appealed the French decision, but it was overturned by France’s highest constitutional authority.
Another issue is that of plagiarism, which is rampant on sites such as Etsy. Googling a particular fandom or musician you admire gives thousands of results instantly of handmade, unique items that are cheaper than official fan merchandise or simply would not exist otherwise. Simply searching “Sonic Screwdriver” on the site brings up 1,070 results, none of which are rewarding the actual creators of Doctor Who with a means to continue producing the show, and none of which are paying any tax on the products they make. There are over 1,200 results when you type “Taylor Swift” into the search bar of Etsy, something the artist is very upset about. Her legal team have recently sent cease and desist letters to many Etsy sellers of her products, who put her image and song lyrics on anything from pillowcases, to t-shirts, to mug coasters and even as cake toppers. She claims this is a violation of her trademarked label, and since this episode many products have been pulled from the site, but many remain for fans to buy.
It is also a question of safety. The products and services offered on these sites often allude to the same standards as the identical goods officially on sale, but there is no regulatory body governing their actual safety. A person on UberPop is not a licensed taxi driver, and so has not gone through the process that would identify if it was safe for them to drive you somewhere or not. Etsy products can be returned if faulty, but these goods can be of a very low standard and recovering lost funds or injuries caused whilst using their products is often more difficult than it would be with official merchandise. Last year, The Huffington Post described some of the horrors users of the platform have experienced when renting accommodation listed on the site. People have used AirBnB as a temporary brothel and have re-enacted scenes from The Shining, complete with axe and all.
One story that was particularly terrifying was one published several months ago of a 17 year old boy called Jacob Lopex, who claimed that he was sexually assaulted in a Madrid apartment by his hosts after being locked into the room he was renting. The New York Times did a comprehensive article on this incident, which brought to light many of the concerns and worries people may have had with this service. The fiasco of AirBnB’s handling of the issue as well as the fact that they did no backgrounds checks on the hosts raises serious questions of the safety of such sites.
Overall, the main problems with these “shared economy” services is the lack of regulation and safety nets, as well as the loss of money from the economy that would have come from the sellers of these goods if they had been paying taxes on their products. It is a great example of the phrase “right idea, wrong method”, as the reduced accountability can be extremely dangerous. It is putting extra pressure on those who produce goods legitimately to find ways to keep up with those who can undercut them on prices and offer extras as their overall production costs are lower.