Part 2: Can the gig economy survive a renewed regulatory onslaught?
Last week I spoke about two recent legislative actions that could spell trouble for the gig economy. And this week, I want to look at the role communications can play.
First, let’s revisit those actions. A set of restrictive rules were signed into law in New York in October this year, making it illegal to advertise vacant apartments in multi-unit buildings for rent for 30 days or less. This was a move aimed squarely at Airbnb.
At the same time, in the UK Uber lost a landmark case which argued its drivers were not self-employed and were therefore entitled to a national living wage and benefits.
Both companies – and the gig economy itself – have benefitted enormously from the almost hands-off approach of regulators in what was at the time a largely undefined area. They could build businesses, free from the responsibilities placed on more traditional industries with little to no thought of the broader implications to society. And thanks to the exponential growth both experienced, very quickly they could afford to battle any legal challenges that came their way.
But the world has changed and momentum has most definitely shifted. Disgruntled workers have made their voices heard in the political arena, emboldening regulators to take on these gig economy giants in the name of more affordable housing and worker’s rights.
So, from a communications perspective, what can Uber and Airbnb do to reposition themselves as accountable corporate citizens?
As a first step both companies need to heed recent painful political lessons and reassess the markets in which they operate. Instead of chasing higher valuations, they need to acknowledge the gaps in their business model and take demonstrable steps to counteract them.
In some ways Airbnb is showing signs of compromise, perhaps for this very reason. In an effort, to thwart the legislation in New York, the company offered an alternative proposal, claiming it would crack down on hosts with multiple listings and provide a registry of hosts to local regulators so they could enforce existing housing rules. The company also noted that it had already removed nearly 3,000 commercial operators from the service.
While these are all good steps, it shouldn’t take a regulator show-down to make them happen. As a brand, Airbnb must prioritize these kinds of actions, in every market it operates in. As they do, they should reposition their narrative, acknowledging that while their business model enables many benefits to hosts and travelers alike, they recognize there is a knock-on effect to the housing market and are doing all they can to combat that.
Sometimes in the world of communications, a company’s willingness to admit failings goes a long way in creating goodwill – provided they also show willingness to fix those very issues.
As a corporate citizen, they should also consider investing some of their considerable fortune back into the communities in which they operate. For example, homelessness is a major issue, particularly in Airbnb’s hometown of San Francisco and often exacerbated by a lack of available housing – the company should consider making this issue a focus of its non-profit efforts.
In the case of Uber, it is a little trickier.
It is well-known that the company is planning a push to driverless cars in the near future. While this still may be a few years away, it is in the company’s interests to fight all challenges to its business model regarding self-employed drivers or face the potential liability for mass redundancies in the future.
From a communications perspective, Uber’s best bet is to focus on its current narrative – that its business allows drivers to operate on their own schedule and provides a source of income to many people who may struggle to find alternative employment options. However, as driverless cars become a reality, Uber should consider how it plans to reposition that story. It needs to focuses on the societal benefits of increased road safety, while acknowledging and providing possible solutions to the number of drivers it will ultimately render unemployed.
More than once recently I have said that things have changed. There is a palpable shift in mood and we can anticipate it will trickle into all areas of communications. The success of Silicon Valley, the rise of the unicorns and the gig economy will come under increased scrutiny by regulators and press alike. For many companies, like Airbnb and Uber, the time is now to mitigate against potential fall-out and reconsider how to tell their story.