Ride-hailing and regulation: Policymaking for the gig economy

By Arabella Hamilton, Account Executive, Cicero Group

With all highly anticipated public offerings come renewed scrutiny. By now, Uber will know that all too well, with drivers striking in the UK, US and Brazil ahead of its IPO today.

In the UK, organised action has centred on a few key asks: an increase in fares from £1.25/mile to £2, a cut in commission paid by drivers to Uber, and bona fide employment status, with sick pay, holiday and all the trimmings of ordinary contractual work. As one of the pioneering gig economy giants and the leading Commercial Transport App (CTA), Uber is familiar with challenges to its flexible employment model, as well as particularly volatile issues around safety and the environment. These are unlikely to go away as it steps under the spotlight again on the public market.

When, if ever, Westminster is released from the shackles of Brexit and given the parliamentary time to address other domestic policy issues, we should expect greater regulation of the gig economy to be on the agenda.

These will be key pieces of legislation that will set a precedent for a rapidly growing sector. Indeed, as the technology that enables these challenger business models develops, it will be a challenge for government to keep up. In order to do so, any policy will need to be simple and flexible.

There is a key policy moment on the horizon. Uber and TfL are scheduled to reconvene in September 2019. Uber won its appeal to overturn TfL’s ban last year and has been given a probationary 15-month license. It will now need to prove that it has become a “fit and proper” operator in the view of TfL. It has already taken steps to make clearer to passengers that drivers are licensed by TfL and to ensure that all drivers are taking 6-hour breaks after 10 hours of driving passengers. This is a good indication of the kind of measures we can expect in regulation across the gig economy, particularly in CTAs – assuring public safety and worker’s rights.

The challenge for government will be ensuring that regulations are simple and flexible – both protecting the ever-expanding workforce and ensuring transparency and public safety. The Government should be prepared to focus policy on the needs of consumers and society. There are opportunities to regulate CTAs in a way that improves mobility and safety, particularly for vulnerable consumers, as well as environmental sustainability.

There is a huge environmental opportunity to harness here. The Government recently published its ‘Future of Mobility: Urban Strategy’, which takes note of the role that ride-hailing services can play in its zero-emissions ambition. Future regulation, bolstered by tech capabilities and data-sharing, can be a key driver in achieving the Government’s environmental policy ambitions. Uber has already published its own ‘Clean Air Plan’ – charging a 15p/mile Clean Air Fee and an ambition to have every London car fully electric by 2025. Policymakers may choose to introduce a similar universal levy on all CTAs, and link operation licenses to sustainability requirements.

Policymakers also have an opportunity to use data-led regulation to ensure any policy is as flexible and minimally disruptive as possible. The Mayor of London’s inclusion of CTAs (and not taxis) in the Ultra Low Emission Zone (ULEZ) levy is an example of a policy that risks pushing innovators out rather than working alongside them towards shared goals. There is an opportunity here on both sides. If policymakers embrace the gig giants, workers, vulnerable consumers and the environment could see massive benefits. If the gig giants embrace policymakers and regulation, there is an opportunity to shape the future of the industry in a way that promotes innovation and their original people-centred purpose.

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Arabella Hamilton

Account Executive

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