Scottish expert advisory panel on the collaborative economy: report

1.0 Key Recommendations Collaborative Economy

1.1. Shaping the collaborative economy that Scotland wants

In the vast majority of cases, Scotland is responding to new collaborative platforms that 'land' in this country. There is no denying the evidence that some of these platforms have had economic benefits for people in Scotland. They have also brought challenges. But it forces us into being continually reactive, responding to the business models and terms set by others; however good or bad we perceive them to be. This robs us of our imagination and limits our potential to take action.

We need to be more proactive in shaping the collaborative economy that we want, working with new market entrants but also actively creating new businesses and platforms that create fair work and great opportunities for people in Scotland to ensure that, in the way it operates, the collaborative economy contributes to improving inclusive growth. This is particularly important when considering how collaborative platforms are likely to spread into new markets e.g. health and social care sectors. We cannot be negotiating with Silicon Valley about the terms for delivering care in Scotland; and if we don't want to find ourselves in that position, we need to act. We must not just be consumers of the collaborative economy but must set our ambitions on being designers and architects of the collaborative economy, through effective education and skills services, as well as government support for social innovation and serious digital entrepreneurs.

When it comes to the gig economy and models for how we share assets, there is a very real danger that we conflate what currently exists, with what is actually possible or desirable. What exists in the commercial collaborative economy today is not the totality of what is possible. There are clear and large scale opportunities for new platforms. While Uber and others dominate the headlines, there are other, smaller ventures and emerging gig economy platforms that present a better deal for everyone. For example, platforms that deliver better pay for care workers than they currently receive at the same time as lowering the cost of care for those who need it. There are different ownership models to be explored, and different ways in which public sector assets can be made more effective. There are opportunities to use collaborative platforms that work to create multiple forms of value: economic, social and environmental.

But those opportunities will not just happen on their own. They need government support and incentivisation.

Recommendations

• Signal Scotland's position as a pioneer of more inclusive, digital economic growth by promoting, supporting and directing finance toward collaborative platforms that deliver fair work, social value and inclusive economic growth.
• Ensure that government and public sector have clear incentives for procuring from these inclusive forms of the collaborative economy.
• Bring together and incentivise other investors from the philanthropic and social finance sectors to innovate and scale new socially responsible, collaborative platforms in Scotland that meet well evidenced needs; particularly, but not limited to, the provision of care, housing, rural transport and sharing community assets.

1.2. Recognising good practice

Collaborative economy platforms – even those operating in the same sector – are not all operating in the same way or on the same terms. There are those that demonstrate better practice than others; who have taken action on some of the common issues that are raised. There are others who will not engage with these challenges and clearly fall well short of responsible business practice.

TrustSeal was developed in the UK and is an industry-led set of good practice principles to set out minimum standards for collaborative economy businesses to ensure that they act with integrity and maintain professional standards. Its current focus is on consumer protection. However, it would demonstrate further commitment to good practice if it were expanded to focus on regulatory recognition; specifically, a commitment to making clear local laws and regulations for providers operating within different jurisdictions. Thus, enabling people participating in the collaborative economy to have a clear sense of rules and regulations at the point of engagement.

Recommendation

• The Scottish Government should take an active role in encouraging TrustSeal – or any equivalent – in its evolution toward a focus on regulatory recognition; particularly with a view to making clear the local rules and regulations for different providers, operating in different geographies.

1.3. Mapping the collaborative economy in Scotland

The collaborative economy is data-rich, and many advances have been made in the use of data to guide public and policy choices and improve user experiences (for example live transport data sets). As a result, the review included extensive data collection. Nonetheless, we do not have accurate and up-to-date data sets that show the impact of the collaborative economy in Scotland. Without this input, the Scottish Government cannot effectively understand the ongoing trends that are shaping its economy and communities. It is crucial that third party analysts focus on collaborating with platforms to access data at source, rather than relying on data-scraped information.

Recommendation

• Set up an observatory into the collaborative economy, working with organisations such as the Open Data Institute and Datalab. This would collect, aggregate, analyse and publish a variety of datasets that show the ongoing impact of collaborative economy platforms in Scotland. This would be a new way for platforms (local authorities and conceivably workers) to agree to share certain data and would address the clear data and evidence gaps that exist in order to track activity and impacts.

1.4. Easy access to simple, easy to understand information about rights and responsibilities when participating in the collaborative economy

Consumer and provider understanding

Whether the panel has been exploring evidence and consumer perceptions relating to transport, workers' rights, finance or short-term accommodation rentals; it has identified areas where a lack of information is creating uncertainty and ambiguity of responsibilities for participants and platforms in the collaborative economy.

More than in any part of the economy, this is an area where there is much more of a burden on the consumer and there is a clear need for people to have easy access to information that is clearly visible at the 'point of sale' or 'point of contract' and easy to understand. This is an area where there are shared responsibilities.

There is a need for consumers and providers to be actively aware of their rights and responsibilities. A responsibility of platforms to ensure that information is readily accessible, and a responsibility of government to ensure that regulatory rules and laws are accurate, appropriate and up to date.

This is complicated by there being many different motivations for people to engage in collaborative platforms and therefore different levels of risk. In speaking with external contributors of evidence to the panel, it is clear that many consumers and providers are 'bounced around' when trying to access information as to their statutory rights and responsibilities – demonstrating a lack of clarity and lack of ownership of the responsibility for this provision of information.

There is also a need to include information on the gig economy when delivering career management skills to young people. Here again, we see different motivations for young people engaging and different expectations about its efficacy and desirability in progressing a career. A person's early experience of work can shape their future expectations of what constitutes fair work and good employment practice. Someone who is working in the collaborative economy for a bit of pocket money should still know their employment rights, expect to have them respected and to work for an employer committed to fair work.

Deeper understanding about the patterns and future of growth of self-employment in Scotland (and what it means for individual pension provision) needs to be understood at a macro-economic and individual level.

Recommendations

• Government should provide the resources to develop a secure, trusted place for people to access accurate information regarding their rights and responsibilities in the collaborative economy. This might be best delivered in partnership with an intermediary such as Citizens Advice Scotland, union or union-based organisations, and importantly, must be accessible from all collaborative economy platforms operating in Scotland.
• The Scottish Government to identify dispute resolution available to consumers in the collaborative economy, identifying any gaps and how these can be addressed.
  • Platforms should be required to make a greater commitment to providing upfront information. Examples include but are no means limited to:
  • Upfront statement of an individual's employment status when selling their time through a digital platform (regardless of whether this is high or low skilled work, and regardless of sector).
  • If selling their time, visibility on likely hourly rates prior to commencing work.
  • As a consumer or a worker, be shown clear routes to redress if things go wrong. There should also be clear, communicated routes to escalating complaints.
  • Anyone renting out their property via a digital platform should be shown – and indicate their acceptance of – specific local rules and regulations regarding any thresholds of usage stipulated by the local government/authority prior to being accepted onto the platform.
  • Platforms serve up – or link to ^[3] – clear guidance to providers as to their income, business and council tax liabilities that result from providing goods and services through collaborative platforms.
  • Minimum health and safety thresholds already exist at a Scotland level. Regulations should reflect the development of the collaborative economy by specifically referring to peer to peer accommodation, to give greater clarity to providers and users. ^[4]

Further recommendations regarding peer to peer accommodation and the gig economy are detailed later in this report.