Taxis. Hotels. What Industry Is Next To Be Disrupted By The New Economy? - CATEGORY Prime Report: TITLE

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There is no doubt that technology has made our lives easier, whether it’s ordering meals or taxis through an app or even renting an entire property at the click of a button. But in the midst of our love affair with new technology, are we looking close enough at the full impact it’s having.

This was one of the main topics at our recent Camp Digital event, with Emer Coleman – technology engagement lead at Co-op Digital – questioning if we were paying close enough attention to the negative side of new technology on some industries and whether we had become too willing to embrace them without a second thought. So exactly how is modern technology impacting the wider economy and how are new sub-sectors like the “gig economy” affecting workers and the user experience of customers.

The Gig Economy

Popularised by tech giants such as Uber and Deliveroo, the “gig economy” refers to an industry that is predominantly populated by self-employed, casual workers on short-term contracts with no employee benefits. In a small way the gig economy has always existed – take tradespeople working on an “as-needed” basis on projects as an example – but the invention of the smartphone and apps has completely revolutionised the idea.

Now, essentially anyone with access to their own mode of transportation can download an app and start making money on a flexible working basis. From a customer standpoint this seems like a great thing with products and services instantly available from a single platform. That said, one thing that came from the talk at Camp Digital is the fact that more attention needs to be paid not just on the economic impact of this new industry, but what effect it is having on workers rights.

While for the most part these apps have been welcomed by customers, detractors have pointed out that they could be described as exploitative with workers ineligible for work based benefits or rights due to the “self-employed contractor” nature of the job.

In terms of the economic repercussions, it is estimated that the gig economy is costing the UK government almost £4 billion a year in lost revenues. This is due to the influx of self employed gig workers who pay less tax than regular employees due to their lower wages. Their relatively low earnings also cause them to rely more heavily on government benefits, such as tax credits and housing benefits.

The increase in workers from the gig economy has also indirectly led to a low average wage growth of only 2.2%, despite there actually being a larger portion of the public in work than at any time since modern records began. This is because pay rates now no longer move upwards when unemployment moves downwards, due to the gig economy creating a new labour market of employees who are both lowly paid and unable to request a pay rise.

The Property Sector

Another part of the sharing economy that was highlighted at Camp Digital was the property sector and how technology platforms like Airbnb have changed the short term rental market. As a concept, these platforms are helping millions of people find cheaper alternatives to hotels when on holiday or away from home.

Again, the use of technology for this purpose has been hailed as a useful innovation, with not much attention paid to the wider impact on the property market, particularly on the supply and demand of rental property. Increasingly landlords are buying properties with the sole intent of letting them out commercially on these kinds of platforms, rather than just using the technology to make a little extra cash by letting out their home whilst on holiday.

As an example, roughly 41% of properties listed on Airbnb belong to landlords who are listing more than one property on the site, highlighting the potential problems this could bring to a market when there are already not enough houses. Emer pointed out that this sustained level of high demand means that rent and buying prices of available homes are increasing in line with the limited supply. Again, the idea that technology can help you make some extra cash by letting your home short term while you’re on holiday is a good thing, are we paying enough attention to how it is actually being used.

The Storage & Use Of Personal Information

Social networks and internet businesses collect huge amounts of data about their users. In fact, a business can build up an accurate “profile” of individual customers likes and dislikes based purely on the icons they click which can be used to tailor the adverts they see.

Have you ever noticed an advert for a product you’ve just looked at chasing you around the internet? Like everything else discussed here there are up sides to this and a more personalised and improved user experience is just one of those benefits. But, how often do we actually stop and ask how much of our data major technology businesses like Facebook and Snapchat have, and more importantly what are they doing with it.

Snapchat’s controversial “Snap Map” location tracker feature is just the latest example of how intrusive technology can become and the amount of information social media platforms like Facebook know about us is staggering. However, while new research shows that two-thirds (67%) of consumers are concerned with how brands currently use their personal information, only 40% have a good understanding of online privacy regulations.

Looking at reports of how influential social media is becoming in elections, and you quickly see how important of an issue this is and how seriously it should be taken. Then there’s the security aspect of these companies storing so much information about us and recent cyber attacks should again be making us question how happy we are to allow companies to store and use so much information about us.

What Are We Doing About These Issues?

There have recently been some efforts to remedy this. New general data protection regulations (GDPR), set to come into effect next May, are poised to drastically change the way companies hold and share their customers’ data. Essentially replacing the Data Protection Act of 1998, the legislation will make the protection of personal information a fundamental right for EU citizens, not just a privilege. When this legislation comes in, the challenge for businesses will be to find a way to continue offering their customers a personalised service while remaining compliant with the incoming, much stricter regulations.

There has also been positive movements in the gig economy sector. Earlier this month, a 116 page report penned by Matthew Taylor recommended that a new class of worker, the “dependent contractor”, be created to accommodate those who currently work as part of the gig economy. These dependent contractors would sit somewhere between employed and self-employed status, and would mean that Deliveroo/Uber drivers would be afforded basic workers rights like sick pay and holiday leave. This would also boost employment in the gig sector, with four in 10 people saying that stronger employment rights would make them consider working in the gig economy.

Overall there is a real lack of ethics in the sector at the moment, not all of it intended, but most of it virtually ignored because we are so fascinated with the digital models we are seeing. While technology and innovation is without a doubt having a wonderful effect on the world as a whole, we need to look much more deeply at the impact of technology on the world, rather than just looking at the surface-level convenience it offers us in our day-to-day lives., index News of business criminal law politics soccer sports celebrity lifestyle video images in the world and the world today.

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