The "on-demand" economy

by Kostas Christidis*

A new form of organization of labor relations is underway worldwide, with pioneers, as usual, the United States and the other developed countries of the West. This is the so-called “on-demand'' economy, which attempts to satisfy existing new economic and social conditions in a way that brings together people who have sufficient funds but not enough time with people with sufficient time but not sufficient funds. The following examples will justify this new kind of professional activity.
 

“Uber” started in 2009 in San Francisco using individuals, who had their own car but no professional license, for the provision of transport services to people who had an immediate need for such services and contacted “Uber” via their mobile phone. Today the company operates in 53 countries and in 2014 had a turnover of 1 billion dollars, while its stock capitalization is estimated at 40 billion dollars! “Handy” sends handymen capable of providing the desired home help, cleaning facilities and care garden to changing internal piping and assembling furniture. The client only needs a credit card and a mobile phone application called “Handy”, which has 5,000 handymen who can serve, currently, 37 US cities, Canada and Great Britain. The company partners can choose a specific timeframe of employment from five to thirty-five hours per week and most employees earn around 2,500 dollars a month.

The on-demand economy covers other clients’ needs as well, such as food buying, laundry service, flower delivery, gift choice, provision of meals etc. An important development is the use of this new model for providing professional consulting services. The British company “Eden McCallum” may send consultants directly from the network of its 500 independent partners for the provision of accounting, legal, medical or other services at a cost much lower than their established competitors. It actually provides risk assessment insurance and it can easily attract for example young doctors, who do not have the necessary financial means to open their own practice but also established professionals who wish to work at their own daily or nocturnal hours. Office space, increased overheads and burdensome paperwork are not needed. The smart use of technology finds solutions in search of available time, knowledge and skills anywhere on the planet.
  

Of course, this new professional activity model refutes the traditional concept, which ran for more than a hundred years (especially during the period from 1880 to 1980), according to which “a good job” for someone meant to be working for a well established private (or state) company. The industrial revolution used to bring thousands of workers under one roof, with specific roles and wages. Technological developments, however, particularly in IT and telecommunications, changed gradually from 1980 these conditions of relative stability and created a numerous professional power without any special roots but with knowledge and flexibility which allows organizations and businesses to cover their needs via external collaborations, without maintaining rigid internal structures and hierarchies of the past.

This development, of course, involves many problems as well. The companies of the on-demand economy face difficulties in terms of education, mobilization and management of partners. External partners cannot rely on a stable employer’s help for continuous training and monitoring of developments. Traditional companies consider they face a rat-race and, thus, they react. The same applies to labor unions and with those already having a job, i.e. protected as far as possible from strict provisions of labor law - which, however, is becoming obsolete by rapid developments. The living reality creates a need to review working arrangements, insurance ordinances and educational institutions. However, though, not in the direction of “automatic” salary increases for civil servants and the endorsement of the ever-studying students!

* e-mail: [email protected]