Three sharing economy companies show one size doesn't fit all

At the Nordic conference on the sharing economy in Oslo, several speakers warned against rushing into introducing regulations.

“Don’t let fear of the sharing economy make us regulate ourselves into a corner. At least not before the problems have even occurred,” said Kristin Skogen Lund, Director General of the Confederation of Norwegian Enterprise, NHO.

She explained how the debate on the sharing economy in Norway accelerated 18 months ago when she got into an Uber Black, accompanied by Norway’s largest newspaper VG, to go to the annual NHO conference which that year focused on the new working life.

“Many thought it was super cool, while others thought it was completely unacceptable,” she said.

Jimmie Carling from Ework Group, the largest provider of consultants in the Nordic region, presented a comparison of how long it takes for different technological innovations to reach 50 million people. Similar comparisons are common, but this one was updated with two smartphone games, Finnish Angry Birds and Japanese Pokémon GO:

Time it takes to reach 50 million users

The Norwegian media company Schibsted owns newspapers like Aftenposten, VG, Svenska Dagbladet and Aftonbladet, but makes most of its money through digital classified ads on platforms like Finn.no and Blocket in Norway and Sweden. It is also active in many other countries.

Christian Ringvold explained how Finn.no is now beginning to connect people offering and seeking services and not just cars, flats, furniture and other second-hand items. The aim is to become the biggest within the ‘verticals’ as it is known.

“We saw the sharing economy was developing very rapidly, there was a big demand for different kinds of services and a growing market of freelancers willing to take on jobs. But our platforms were not adapted for services, so we have had to develop them,” he said. 

One challenge is to make sure all those willing to carry out tasks are really qualified to do so. 

“We drop 20 percent of the job offers. We can for instance not allow a person with no training as a car mechanic to offer services related to that,” he says.

“Other challenges include how we develop suitable insurances in cooperation with Insurance companies.”

Platform companies influence each other

Although the sharing economy is still small compared to the traditional labour market, the platform companies interact, which accelerates the development further. Swedish Cool Company has specialised in helping freelances who want to make money carrying out various tasks, but who don’t want to have to take care of administrative issues like sending out invoices or paying taxes. The company is so far operating in Sweden and Norway, but is also getting established in Finland.

“19,000 people have used our services so far,” said Louise Becker, who is the company’s international business developer. In Sweden the tax authorities have a separate category for such freelances, called self employed.

“69 percent of the self employed who use us say they would have struggled with administering their business, but 36 percent also say they want to avoid working in the black economy. They want to pay taxes in the correct way,” she said.

Big differences

According to the Swedish commissioner Kurt Eriksson, who was behind the Swedish inquiry about the sharing economy and working environments, there are big differences between Cool Company and Uber.

"Cool Company has no control over the prices and conditions those who hire their customers apply to their services,” he points out.

Companies like Cool Company represent an advantage for the tax authorities too. The customers who get help with their administrative work, pay a fee representing 5.98 percent of the sum they get paid for having carried out their task.

Ework Group has come another step closer to adapting to the Nordic model.

“We operate across the Nordic region and have followed legislation in the different countries for 16 years. For us this is no longer even an issue,” said Jimmie Carling, CEO for Ework Group in Norway.

More than half of the 7,500 consultants on the company’s books have their own companies. The average length of a task is six months. For Finn.no it is all about linking customer and provider within 30 minutes, and the average fee is 1,200 kroner (€127) per task.

The three companies show the challenges facing governments when it comes to adapting labour market regulations. What suits one company can be completely wrong for another. At the same time, some issues, like the working environment, fall between two chairs.

“We have not had time to look at working environment issues yet,” admitted Christian Ringvold at Finn.no.