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Sharing Economy: Entrepreneurs’ Heaven or Union Nightmare?


The “sharing economy” or “collaborative economy” or “peer-to-peer economy” is growing in leaps and bounds. It’s welcomed in open arms by most who see it as going hand-in-hand with advancements in technology (apps) available for anyone with a smartphone.

Personally, I can’t remember the last time I’ve took  a taxi without ride-share companies such as Uber and Lyft, as they offer a more personable, sleeker alternative. Dating apps such as Tinder and Hinge have also  helped my dating life with my busy schedule, and Airbnb allows my new girlfriend and I to stay anywhere in the world.

A few short months ago, San Francisco voters rejected Proposition F, helping to prove that the sharing economy is here to stay. Prop F was meant to introduce new restrictions on short-term rentals and solve San Francisco’s housing crisis. Under current law, the city can sue on behalf of complainants who report unlawful housing practices. Prop F would have taken this one step further. You can read more about what Prop F meant to Airbnb in our recent Near Me article. If it had passed, complainants would have received a percentage of the relief from any successful injunction, creating a neighbor-versus-neighbor spying game, as Airbnb repeatedly pointed out in its advertisements. It was a big win for Airbnb over the hotel unions.

The sharing economy is without a doubt seen as an exciting new form of economic growth for most. It is an entrepreneur’s dream and helping to boost productivity levels, wages and living standards while allowing people to have the flexibility to work for themselves. The sharing economy is actually very similar to the traditional “grey economy” and both are frowned upon by unions around the world who have effective processes in place to protect the workforce. Employment laws and minimum wage standards are much harder to enforce --the new sharing economy entrepreneurs have no health care, retirement plans, unemployment benefits, etc.

Union members benefit from all this and more. Union employees make a lot more than nonunion workers. 92% of union workers have job-related health coverage versus 68% of non-union workers. Union workers are more likely to have guaranteed pensions than non-union employees. Forbes discussed how the union economy doesn't work in a sharing economy a couple of weeks ago. They talk about how union membership has dropped drastically and how that is forcing unions into an act of desperation, having them turn to their political alliances to put rigid controls on working arrangements. Stay tuned for our new blog that will go into details on how the sharing economy is affected by politicians.

Union officials claim that startups like Uber and Airbnb are cheating their contractors out of fair wages. The rise of Uber, Airbnb, and the rest of the sharing economy only proves how a growing number of Americans have decided not to go with unions but become thriving entrepreneurs. Thanks to disruptive innovations like Uber and Airbnb, anyone can go into business for themselves.

Unions are finding it very difficult, if not impossible, to incorporate the sharing economy with entrepreneurs.. While some are not overly concerned, the traditional workplace structure seems to be declining  and the rise of self-employment, part-time and casual work seems to confirm these trends. One way or the other, unions need to adapt to the changes that come with the new sharing economy or face becoming extinct.

Topics: Sharing Economy

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