Governments should not try to slow the growth of the peer-to-peer economy to protect vested interests, given the potential value in getting the new online economy right, according to thinktank The Grattan Institute.
In a new report, the Institute said that legalising Uber nationwide alone could save Australians “more than $500 million on taxi bills”.
So-called sharing economy platforms could also “increase employment and income for people on the fringe of the job market”, and so governments should make sure they do not impede this kind of growth potential, the thinktank said.
Government has an important role to play in supporting its growth while reducing any downsides, it said.
“Some say peer-to-peer platforms bring hidden costs by risking work standards, consumer safety and local amenity, and by potentially eroding the tax base,” Grattan productivity growth program director Dr Jim Minifie said.
“These worries are not groundless but they should not be used as excuses to retain policies, such as taxi regulation, that were designed for another era and no longer fit.”
However, the report recommended government intervention in a number of areas, including ensuring employee safeguards for those that found work on these new services.
“Tens of thousands of Australians are already working on peer-to-peer platforms,” the Institute said.
“These platforms will mostly improve an already flexible labour market, but governments must strengthen rules to prevent employers misclassifying workers as contractors, and bring some platform workers into workers’ compensation schemes.”
New platforms that recruit cyclists to deliver food recently came under fire for allegedly underpaying workers, who they pay as “independent contractors”.
The thinktank said it did not believe such workers should be reclassified – only that governments should take some action to make sure existing employment laws are adhered to, while adding some “safeguards” for workers on these platforms.
It recommended creating an environment where “workers are well-informed when they elect to do peer-to-peer work and do not unwittingly take on risks” by registering as a contractor.
While the number of Australians employed through peer-to-peer platforms remains relatively small – about 80,000 Australians do some work through them at least once a month – the volume of work available through these platforms is “growing fast”.
And it is anticipated that these types of services will only grow, particularly if governments resist the urge to over-regulate them.
“Governments should adjust labour regulations to help realise the efficiency gains and employment growth potential of platforms,” the Institute recommended.
“They should proceed with caution, though. It is early days. There is quite strong evidence that many people have benefited from platform-based work, and little evidence of harm.
“For now, policymakers should focus on mitigating the risks of platform work. In time, other steps may prove warranted.”
