Respecting Human Rights in the On-Demand Economy: Closing the New Governance Gap

This article was first published in the Business & Human Rights Journal, part of Cambridge University Press. The introduction to the article is included below. To read the full article, please download a copy here

We are in the midst of a dramatic economic revolution, a revolution that is driven by rapidly evolving technology, the rise of big data, and changing attitudes towards both employment and services. This new economy has many labels: it is often referred to as the sharing economy for the platforms that enable users to earn money by sharing their homes, cars, or other property. It is often called the “gig” or on-demand economy, transitioning from a model based on permanent employees to one of independent contractors or “micro-entrepreneurs” using new platforms to bid for and complete multiple gigs. This article seeks to apply a business and human rights lens to these new economic models. It explores potential human rights impacts associated with the shift to the on-demand economy, reviews recent efforts in business and public policy to begin to address these impacts, and points to the UN Guiding Principles on Business and Human Rights (UNGPs) as a useful framework to define responsibility and guide action by both business and government.

New business models, taking advantage of mobile technology to disrupt traditional markets such as hospitality, car rentals, taxi services, and lawn care, have been wildly successful. AirBnB, the short term lodging platform, was valued in 2015 at UD$25.2 billion, surpassing the market cap of major hotel chains like Marriott (US$20.6 billion), Starwood (UD$14.1 billion). Fiverr, an online market for small services starting at UD$5, generates close to 1 million transactions a month. Along with technological innovation, we are seeing a generational shift in how the so-called millennial generation views employment. Millennials are far more likely than previous generations to view self-employment as a career ideal, according to the 2015 Allstate/National Journal Heartland Monitor poll. 

There is a striking parallel between the rise of the on-demand economy and the rapid globalization of the economy in the 1980s and 90s, with respect to human rights. Rapid globalization exposed governance gaps where global, national and local institutions and regulatory frameworks were ill-equipped (or unwilling) to address human rights impacts stemming from rapidly expanding economic activities globally. Many aspects of the globalization challenge, as described by UN Special Representative on Business and Human Rights (UN SRG) John Ruggie, could be used today to describe governance gaps in the on-demand economy:

The current debate on the business and human rights agenda originated in the 1990s, as liberalization, technology, and innovations in corporate structure combined to expand prior limits on where and how businesses could operate globally. Many countries, including in the developing world, have been able to take advantage of this new economic landscape to increase prosperity and reduce poverty. But as has happened throughout history, rapid market expansion has also created governance gaps in numerous policy domains: gaps between the scope of economic activities and actors, and the capacity of political institutions to manage their adverse consequences. The area of business and human rights is one such domain.

To read the full report, please download a copy from the Business & Human Rights Journal.