Study shows how consumers' use of online platforms differs depending on their employment status

Wallapop, Deliveroo, Cabify and Glovo. These names have been making waves for years and the crisis and restrictions caused by the pandemic have created a steady rise in the popularity of the sharing economy. The platforms allow consumers to also be suppliers of goods and services and thereby access second-hand products at bargain prices or even exchange them with other users. At the same time, anyone can become a supplier to earn extra money.

But there are more reasons for participating in the sharing economy than making savings or responsible consumption. One of the key factors for understanding how and why a person joins a sharing economy platform, as either supplier or consumer, is their work situation. This is illustrated in the study Motivations of collaborative obtainers and providers in Europe carried out by Joan Torrent, full professor at the UOC's Faculty of Economics and Business.

According to the author of the research, carried out jointly with UOC professors Natàlia Cugueró-Escofet and Myriam Ertz, "We show that in Europe, not everyone's reasons for participating in sharing economy platforms are the same and they depend on their type of work". By way of example, people in management posts value the practicality more than the opportunity of making savings. However employees, qualified or otherwise, are more interested in cheaper prices and the chance of finding goods and services they would otherwise be unable to acquire. However, the decisive factor in choosing to participate in the sharing economy is trust.

Most of these platforms are organized via mobile apps and websites, where users interact directly with each other without the constant watchful presence of someone supervising exchanges. As Joan Torrent put it, "trust in both the platform and users is an essential element in understanding the sharing economy". Indeed, almost all users who become suppliers have previously used an app to obtain goods and services.

As the professor explained, "people use the platforms as consumers and, once they have gained experience and trust, they use them to provide services or for work". This is true for almost all entrepreneurs or freelancers who end up providing services on sharing economy platforms, such as Glovo and Deliveroo. For some, working for the platform becomes the main source of income. These are the so-called crowdworkers.

Crowdworkers, a booming employment model

Although the sharing economy is on the rise, according to the research, 53.2% of Europeans have not heard of it, while among the rest, only 12.9% have used it to obtain goods and services and only 3.5% are suppliers. Out of these, the biggest group are the self-employed: 7.9% of European entrepreneurs provide goods or services through the sharing economy. According to the data, the self-employed and people with several jobs are more likely to offer their services as a way of rounding up their salary at the end of the month.

However, according to Torrent, self-employed workers who become suppliers "do so for more reasons than just earning money, which is not the case for other groups". According to the research, crowdworkers value the chance to earn extra income, but also to achieve a better work-life balance, as well as autonomy and control over their career. Nevertheless, the instability involved in platform-provided services and the resulting variability in income, along with isolation and stress, are a concern for workers.

As Torrent warned "platforming work has many advantages, but also many disadvantages". By way of example, he highlights the reduction in costs and the opportunity to be both consumer and supplier in the same market. However, on the downside, the professor stresses the threat of delocalization: "it is a means for companies to free themselves of the costs of workers' social protection".

According to Torrent, the effects of this new reality vary depending on economic conditions: "in rich countries, such jobs represent a clear loss in standard of living, while for workers in poorer countries they offer a short-term increase in earnings and benefits". Thus, Professor Torrent sees this as "telemigration without migration", which needs to be assessed by weighing up its short- and long-term consequences. "Without a framework of international labour relations, as called for by the WTO, it is very hard to organize remote work on platforms properly," he claimed.

A route toward sustainability in times of pandemic

The pandemic has popularized use of sharing economy platforms around Europe. According to Joan Torrent, a full professor at the UOC, the digitalization and flexibility provided by this economic model offer numerous advantages along with risks and require "a new social contract to move the model toward an economically viable, socially responsible, neutral and climate-friendly transformation".

Torrent noted that "the sharing economy is a major contributor to atypical work". Indeed, due to the rise in worker numbers, Europe has had to regulate these new labour models. Spain is no exception and is currently finalizing details in the so-called Rider Law, which requires workers for platforms such as Glovo and Deliveroo to be recognized as paid employees. Torrent stressed that "at the start, the sharing economy was geared toward altruism and exchange, but the success of their business model, which is to some extent extractive, has weakened the more purely sharing models".

This is why the professor emphasizes the need "to build a new social contract for this new reality" and ensure this considers the responsibility of platforms workers, otherwise, as he warns in the first special issue of the journal Oikonomics on the sharing economy, "the social contract will be written for them but without including them". What is clear, especially after the profound crisis caused by the COVID-19 pandemic, is that the sharing economy platforms will continue to grow. And, according to Torrent, this opportunity must be grasped, because "no recovery will be possible without a digital transformation to make the economy more sustainable".

The sectors that have proved most flexible toward remote or online practices are the ones that have suffered least from the crisis, hence the sharing economy appears to be a good tool to coordinate the recovery. Torrent believes that "their boundless possibilities make digital platforms not just new economic agents that reduce transaction costs, but also one of the most important innovations in recent years", and compares the change brought about by platforms to the impact of factories in the 19th century. Thus, although there is still much to learn about how the platform economy will develop, it will clearly be part of the future transformation, opening the door to a "viable, socially responsible, climate-neutral and healthy economy".

This research project is in line with Sustainable Development Goal (SDG) 9, to build resilient infrastructure, promote sustainable industrialization and foster innovation.

Related documents

Torrent-Sellens, Joan; Cugueró-Escofet, Natàlia; Ertz, Myriam (2020). «Motivations of collaborative obtainers and providers in Europe, Behaviour & Information Technology», DOI: https://doi.org/10.1080/0144929X.2020.1851770.

Torrent-Sellens, Joan. «Economies de plataforma i negocis col·laboratius. L’economia col·laborativa com a palanca de progrés i sostenibilitat en temps de pandèmia. Oikonomics [en línia]». Novembre 2020, n. 14, pp. 1-5. ISSN: 2339-9546. https://doi.org/10.7238/o.n14.2010.

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