Conventional regulations won't work for 'sharing' economies

Thursday, April 14, 2016

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An excerpt from my OpEd in The Jakarta Post:

What is certain is that the old economy is being redefined. Even jobs are being redefined. Information technology is slowly but surely shifting “employee” into “workforce-as-service”. There will be fewer employees and more part-time work-from-home consultants. There will be fewer people going to offices and more people teleconferencing through virtual reality gadgets.

For lawyers, this means that the traditional elements of labor law, wages, authority (e.i. from a boss) and “a defined job”, are no longer fulfilled. The new workforce has more independence and outcome-rather-than-process orientation. So authority is rather irrelevant. They also receive commissions instead of wages. They also may not have a set of “defined jobs” — they may be working here and there on several projects.

For that reason, the existing Manpower Law may not be necessarily relevant for the sharing economy. Thus the government shouldn’t force manpower laws on Uber and Go-Jek. This is not to suggest that the new workforce should be deprived of their traditional protections — in terms of health insurance and pension funds and other benefits — that are traditionally provided by offices. It simply means that the government needs to think of new ways so that these protections remain available when the workforce has shifted from employment to services.

The same reason goes for transportation platforms. Taxis, for example, must comply with minimum service standards, such as being equipped with taximeters, assurance of driver’s physical condition, maximum working hours, vehicle maximum age and general safety standards such as functional seatbelts, functional brakes and regular checking to ensure that the vehicle is roadworthy. All these standards must be available to Uber’s or GrabTaxi’s customers too.

The real problem is how to apply these standards to a sharing economies platform. The government should not confuse regulatory goals with regulatory formalities. Subjecting vehicles to yellow license plates or registering them with specific licenses are regulatory formalities (means) to regulatory goals (ends), which is, among others, safety.

Now how do we get them to obey these standards? The current academic proposal from experts worldwide is through self-regulation. Some called them “shared regulations”, which denotes shared regulatory competence among several regulatory authorities and the companies themselves. Unfortunately this idea has not caught the attention of Indonesian policymakers and they are preoccupied with applying existing legal definitions to Uber, Grab or Go-Jek. As I previously mentioned, it won’t work because they can’t be categorized as per se IT or transportation companies.

See full article here.