A ‘gig economy’ or walking a tightrope?
The ‘sharing economy’ has become a popular concept recently. It is a term with multiple meanings and depending on one’s viewpoint is one of the positive outcomes of the digital economy and globalisation, or one of its most negative and destructive manifestations. Essentially it is a term applied to a range of short term part-time precarious or other self-employed or semi-formal employment opportunities. By using technology to link users and producers directly, the ‘gig economy’ model as some of its advocates refer to it, enables certain kinds of assets and skills including property and vehicles to be ‘monetised’ in ways that pre-internet were nigh on impossible. Classic examples, now household names, include room and house rental company Airbnb, taxi company Uber, and hot meal deliverers Deliveroo. There are plenty of others. Large and successful businesses, these platforms allow plenty of people to create a business out of skills and assets that would have until recently been of limited value. As such they have been lauded as drivers of entrepeneurship and indeed are a significant part of the rapid rise in the number of people registering as self-employed, by far the most important component in the highest levels of employment ever recorded in the UK – while unemployment nonetheless remains fairly static at around 4.8% , over 1.6 million people. Indeed I have been one of them, as an Airbnb ‘host’ for the past three years.
The ‘gig economy’ sounds cool; images of touring bands, pop-up cultural events, fun, sharing, youth and new experiences. This new self-employment model, far from being a ‘gig’ (even if the flexibility it allows, makes it feel like that for a few young people) has a darker side, the much wider spectrum that includes the worlds of zero hours contracts, insecure work, payment by the hour or unit ‘delivered’ (‘piece work’ in the old days) in warehousing and distribution (Sports Direct, Amazon), delivery driving (Next, Hermes, John Lewis) the care sector, and even large parts of the university sector. Unsurprisingly critics are looking for a more critical tag. The precariat is an accurate description but hardly trips off the tongue. Perhaps the’ tightrope economy’ suggested by George Monbiot, is a more accurate moniker and can fly? Whatever the name, it has profound demographic, economic and spatial impacts.
A first stab at analysing them from a planning perspective has come for the LSE. I was at the 50th anniversary event for the founding by Peter Hall of the Regional and Urban Planning course at LSE in October, and as part of the celebrations, course leader Nancy Holman and post grad student Alessandra Mossa presented some fascinating work on the subject, focussing on Airbnb in London.(1)
Prior to March 2015 short term letting (STL) was prohibited in the capital on the grounds that given the popularity of the city as a tourist destination and the housing pressures it faces, STL would lead to a creeping conversion of residential dwellings into what was effectively hotel accommodation. But pressure, not least from Airbnb to reverse this characterised the ban as being both detrimental to London’s tourist industry and acting as a brake on hard working families being allowed to earn some extra income from their assets – spare rooms etc. So the ban was lifted from April 2015. In other words deregulating STL’s was promoted as a way of freeing up the economy and limiting unnecessary bureaucracy. Renting out a room or a house when on holiday, should not constitute a loss of permanent dwelling stock, but the evidence suggests that many properties are being used exclusively for short term lettings (2). The LSE researchers who examined four London Boroughs quote an Islington planner: ‘Some of the properties that we have been researching [on Airbnb] can be around £200 per night….No monthly rent no matter how high can compensate for that…’
Unsurprisingly the research has found that both the number of properties listed on Airbnb – over 11,000 in the four boroughs of Camden, Islington, Westminster and Kensington & Chelsea, and the proportion of multi-listings ie where ones where hosts list more than one property, at over 40% across the boroughs, has already had an impact on the housing market. STL’s are supposed to be restricted to 90 days in any one year, but the rule is wide open to abuse as there is no mechanism for councils to monitor and enforce it. There is no requirement for a register and so no way any council can know whether a property is being let on a short term basis, let alone whether that is for more than 90 days, short of the random accountability of neighbours complaining. London is hardly unique in this regard. Paris, Barcelona, and Berlin have all felt the pressure on housing stock, property prices, and neighbourhood cohesion, but all have introduced mechanisms to control the creeping ‘hotelisation’ of residential properties in their cities. For example in Paris, by banning multi-listings, or in Berlin by having a rule that the host must live in the property being advertised. Airbnb have challenged these regulations in court but lost.
The gig economy sounds exciting and innovative, and for a lucky few it works well. But the consequences in terms of impact on housing stock and its availability and affordability, the cohesion of neighbourhoods, personal safety and in many cases the precarious nature of the employment opportunities provided, are all thing that planners will have to deal with when people fall off the tightrope.
This article first appeared in the December 2016 issue of Town & Country Planning