On demand economy: a chance to make money or a return to wild labour market?

Not later than one year ago, in the UK people under 25s were almost four times more likely to be jobless than their elders. In Spain unemployment rates are now around 23%, but were over 26% in 2013. Try to Google for Italy youth and the first suggestion you get is unemployment. That goes beyond any number. Is Europe hopeless? Probably not. Everyone now knows about the impact of low oil prices, of the long awaited QE from the ECB and all the factors that are boosting European GDP (projections), but this may not last.

The crisis have strongly proved that – especially in southern European countries – reforms are no more deferrable and a strong change in attitude is needed. Digital technology can help in this process, yet the speed with which they ask us to change our mind set and habits is seldom quite disorienting.

For many decades we all have been used to see from very small to huge amount of workforce under the same roof, piled in warehouses, offices and production lines. Nowadays this seems to be not needed anymore. The line between entrepreneurship and labour is getting more and more ephemeral.

In many European countries people in their 50s or 60s who lost their jobs, mothers with high barriers to re-enter the labour market and young people with low wages are finding a new opportunity in what the Economist has recently named as the on demand economy, being the economic activity created by tech companies that fulfil consumers via an immediate provisioning of supply. Uber, Handy, Airbnb, TaskRabbit are just some of the possible examples. According to The On-Demand Economy, over $4.8 billion in capital has been invested in on-demand companies, with $2.2 billion invested in the last 12 months alone. Travis Kalanick, Uber’s CEO and Co-Founder, announced that Uber wants to create 50,000 jobs in Europe. More than what Italy can expect to create with its latest Jobs Act, probably.

Beyond the debate over what is sharing economy and what is on-demand economy or crowdsourcing, which is probably more useful to Communication experts rather than normal people, it is clear that the on-demand economy is a new way of offering services or goods through a squeezebox supply. It probably got a foothold thanks to the difficult situation in which many have found due to the economic crisis, but it is more than just a temporary response. For at least three reasons. Yes, it is because of the mobile devices we all have in our pockets through which we can call a driver or find a house-keeper. Yes, it’s because costs decrease if you are nothing but a platform rather than hiring thousands of drivers or cleaners.

Mainly it’s because we are the on-demand generation: we want our tv series available all in one; we want a driver in 3 minutes and a house to stay with one click, but we are not ready to buy anymore the negative externalities: we know we couldn’t afford the construction of enough hotels for big events as Milan Expo or the Olympics, but we expect to find easily an accommodation everywhere. We are scared by pollution but we want an easy ride home. We want it now, and technology can help us getting it.

We are also on-demand workers because more and more we want to work when we want, cutting as many red tapes as possible offering flexibility being, on the other hand, ready to lose security. Freelancers can get the same attention as big companies through platforms and the p2p feedback system or the competition scheme as on Zooppa.com for Adv campaigns contests.

But if all this is here to stay, and we as a society want to embrace this revolution, accepting to take workforces out of the factory and spread it all over together with their labour rights, regulators are about to face increasingly difficult challenges. Taxation is the first one, and probably the easiest: we need to create easy and convenient VAT numbers with no cost nor taxation until the first euro is generated through the platform. This could be an easy, transparent and efficient way of taxing incomes and encouraging this new way of working.

The biggest challenge for regulators consists in the duty to guarantee the minimum standards that are now granted by duties for public services: why would an Airbnb apartment have a toilet for disabled people? For market differentiation? Maybe, but how long would it take before someone finds it convenient to have it? Same can be applied to transportation or services as EatWith a community of food lovers that share their talent in making meals: will the feedback system enough to guarantee services also to disadvantaged categories? It’s a sort of leap of faith in the free market and ability of platform to regulate, without intervention, the standards and level of awareness of consumers/users.

Are we ready to do it in order to grasp a (hopefully) sustainable growth or will the European tradition prevail, even suffocating the fragile opportunity to get out of the crisis?