SARS-COVID-19 has significantly slowed down economies and stalled life in many cities across the globe. This hits very badly millions of taxi-drivers, among them Uber and other platform drivers whose social rights and security are least protected. The platforms react to the crisis in different ways.
Pandemic hit hard both global and local economies
The SARS-COVID-19 epidemic started at the times of reported emerging trade barriers, escalating geopolitical tensions. The World Economic Forum (2019) describes how weakened international collaboration damages collective will to tackle global risks. In December 2019 the growing epidemic caused closure of many Chinese factories and created difficulties for corporations, which rely on Chinese industrial capabilities. In early 2020 the pandemic has hit the international travel, small and big businesses across the globe. And by the middle of March the grim economic projections foresee a global Corona recession.
One of the first measures to tackle the spread of the virus was restriction of people’s mobility. Governments across the world started to screen or ban travelling and travellers first from specific and then more broadly. National borders have been closed and in epidemic areas these measures moved into more severe restrictions of mobility between regions and in restricted areas. Social distancing has resulted in governments and businesses asking people to stay at home, to work remotely when possible, and avoid social contacts. Shopping malls, concert halls, and theatres are closed. Trade fairs, conferences and entertainment events have been cancelled. To enforce nation-wide quarantines some countries (for instance, Slovakia and Czech Republic) banned passenger transportation by taxi platforms allowing only grocery delivery.
The politics and reactions by governments for control of COVID-19 pandemic were brought up by Salla Atkins and Meri Koivusalo. Here we focus on implications of the COVID-19 pandemic on platform economy workers, zoom on taxi-drivers. We analyze also how platform providers have reacted to the epidemic.
Taxi sector and pandemic wave
The COVID-19 pandemic with a dramatic decrease in social activities and consumption has an immediate impact on most business sectors, including transportation of people. Taxi companies estimate 80-90 % decline in numbers of taxi rides within a week between 13-20 March. Finland’s Taxi Association officially “Suomen Taksiliitto” demands local and state responsibility for income compensation for taxi entrepreneurs, who suffer from the suddenly ended school transport as one major aspect of the reduced mobility. Media reported on 31 March that the government of Finland had introduced a flat sum of 2000 euros benefit scheme for those solo-entrepreneurs and freelancers, whose business is substantially weakened by the Corona crisis. There is funding for 50 000 persons. The implementation of the scheme at the municipality level is under process. Furthermore, the government of Finland will extend unemployment benefits temporarily available for the entrepreneurs, although the final details about the scheme are to be decided. Both these schemes help entrepreneur-workers, like Uber drivers, to cope with their severe business losses in this unusual situation.
How does the COVID-19 epidemic affect the most vulnerable part of the workforce, the platform workers, some of whom work in the taxi-sector? Taxi drivers earnings are dependent on freedom of mobility and on established rhythms of urban life: people travel to work, go out to eat, attend concerts and sports events.
How does the COVID-19 epidemic affect the most vulnerable part of the workforce, the platform workers, some of whom work in the taxi-sector? Taxi drivers earnings are dependent on freedom of mobility and on established rhythms of urban life: people travel to work, go out to eat, attend concerts and sports events.
The digital applications have multiplied the use of taxi in 7-million-resident St. Petersburg, where the COVID-19 now stalls the urban life. Taxi-drivers we interviewed there as part of the Academy of Finland Uberisation: Rights, Regulation and Redistribution research project said that their earnings during St.Petersburg International Economic Forum in 2019 allowed them to enjoy troubleless summer vacation. Similarly in Helsinki, many newly started Uber drivers were busy during 2019 summer months.
Now, in St.Petersburg, the International Economic Forum 2020 is cancelled and even more severely EURO 2020 football tournament is postponed 12 months to summer 2021 due to a coronavirus outbreak. St. Petersburg has over 25 000 active taxi licenses and tens of thousands of taxi drivers are now affected by the closure policies announced on March 18, 2020 with no compensation of lost earnings for self-employed drivers. Local government discusses the possibility of subsidizing loan interests for small businesses and automatic extension of work permits for immigrant workers. The government of the Russian Federation presented its own COVID-19 economic crisis plan that included: state regulation of prices on food and essentials, subsidies interest rates for business loans, compensation of losses to transportation and tourism companies. Furthermore, Russian president Putin proposed emergency measures that included mortgage, debt, and tax holidays, increasing unemployment benefits, bankruptcy protection and tax reliefs for small businesses.