OECD DIGITAL ECONOMY PAPERS No. 260 NEW FORMS OF WORK IN THE DIGITAL ECONOMY 2016 MINISTERIAL MEETING ON THE DIGITAL ECONOMY TECHNICAL REPORT NEW FORMS OF WORK IN THE DIGITAL ECONOMY FOREWORD This report was prepared as a contribution to the background report of Panel 4.1 “New Market and New Jobs” of the OECD Ministerial Meeting on the Digital Economy, 21-23 June 2016, Cancún (Mexico). It provides new evidence on the development of online platform markets, discusses patterns, opportunities and challenges of new forms of work in platform service markets, presents analysis of non-standard work in OECD countries, and identifies policy issues related to new forms of work. This report was prepared by David Gierten, with inputs from Vincenzo Spiezia, OECD, for the Working Party on Measurement and Analysis of the Digital Economy (MADE). Airbnb, Youpijob and Freelancer shared data with the OECD for this report and Uber commented on the paper's use of publically available data on Uber. The report was approved and declassified by the Committee on Digital Economy Policies (CDEP) on 13 May 2016 and prepared for publication by the OECD Secretariat. Note to Delegations: This document is also available on OLIS under reference code: DSTI/ICCP/IIS(2015)13/FINAL This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. 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All requests for commercial use and translation rights should be submitted to [email protected]. 2 OECD DIGITAL ECONOMY POLICY PAPERS NEW FORMS OF WORK IN THE DIGITAL ECONOMY TABLE OF CONTENTS FOREWORD ................................................................................................................................................... 2 EXECUTIVE SUMMARY ............................................................................................................................. 5 1. THE RISE OF ONLINE PLATFORMS ..................................................................................................... 7 2. DEVELOPMENTS IN SELECTED PLATFORM MARKETS ............................................................... 11 Services delivered physically ..................................................................................................................... 12 Services delivered digitally ........................................................................................................................ 17 Patterns of work and income ...................................................................................................................... 19 3. WORK IN PLATFORM SERVICE MARKETS ...................................................................................... 21 Opportunities ............................................................................................................................................. 21 Challenges .................................................................................................................................................. 22 4. NON-STANDARD WORK IN OECD COUNTRIES .............................................................................. 23 Trends in non-standard work ..................................................................................................................... 23 Effects of non-standard work ..................................................................................................................... 26 5. POLICY DISCUSSION ............................................................................................................................ 29 An evolving policy discussion ................................................................................................................... 29 Selected policy issues ................................................................................................................................ 29 REFERENCES .............................................................................................................................................. 39 Tables Table 1. Top 15 public Internet companies by market capitalisation in 1995 and 2015 ....................... 7 Table 2. Duration of Airbnb stays in major Airbnb markets ............................................................... 15 Table 3. Drivers, hours worked, and revenues in selected Uber markets ............................................ 16 Table 4. Job categories and average job value by category on Youpijob, 2012-15 ............................ 16 Table 5. Job categories on Freelancer and Upwork ............................................................................. 18 Table 6. Fastest growing jobs and skills on Upwork based on earnings, 2014 ................................... 19 Table 7. Top 10 employer and provider countries on Upwork, 2014 .................................................. 19 Table 8. Participation and revenue in platform markets in the US ...................................................... 20 Table 9. Opportunities and challenges of new forms of work and other non-standard work .............. 36 Figures Figure 1. Possible transactions over online platforms ............................................................................ 9 Figure 2. Diversity of platform service markets ................................................................................... 12 Figure 3. Airbnb hosts and nights hosted in the United States and major European markets .............. 13 Figure 4. Types of accommodation booked in major Airbnb markets ................................................. 14 Figure 5. Average annual revenue from Airbnb and average nightly prices ........................................ 15 Figure 6. Demand and supply of Youpijob services in French cities ................................................... 17 Figure 7. Registered users on selected platforms .................................................................................. 18 OECD DIGITAL ECONOMY POLICY PAPERS 3 NEW FORMS OF WORK IN THE DIGITAL ECONOMY Figure 8. Non-standard work as a share of total employment, 2013 .................................................... 24 Figure 9. Employment growth by type of employment, 2007-2013 ..................................................... 24 Figure 10. Self-employed workers and non-employer establishments in the United States ............... 25 Figure 11. Reason for having a contract of limited duration .............................................................. 26 Figure 12. Wage penalty for non-regular employees .......................................................................... 27 Figure 13. Temporary workers and employer-sponsored training ...................................................... 27 Figure 14. Probability for transitioning from employment to unemployment in one year ................. 28 Figure 15. Assessing the need for regulation ...................................................................................... 37 Boxes Box 1. Online platforms and the "x" economy ............................................................................................ 8 Box 2. Defining non-standard forms of work ............................................................................................ 23 Box 3. Linking entitlements to individuals ................................................................................................ 31 Box 4. Collective organisation of independent workers ............................................................................ 33 Box 5. Co-operation between platforms and regulators ............................................................................ 34 4 OECD DIGITAL ECONOMY POLICY PAPERS NEW FORMS OF WORK IN THE DIGITAL ECONOMY EXECUTIVE SUMMARY Many markets are increasingly becoming digital. This transformation is often driven by online platforms that facilitate interaction and (re-)intermediate transactions, partly or fully online, by matching demand and supply of goods (e-commerce), services (the "x"-economy) and information (search, social networks, content). This paper examines how online platforms affect production and in particular the organisation of work (section 1); provides new data on developments in selected platform markets (section 2); discusses the work and income opportunities created in these markets and related challenges (section 3); presents OECD analysis of non-standard work (NSW) (section 4); and identifies policy issues related to work in platform service markets (PW), including measurement needs and approaches to collect better data for further analysis of these topics (section 5). By 2015, operators of online platforms for information, goods and services had risen to almost fully dominate the top 15 of the world's largest Internet based companies by market