Gig Economy Turns Germ Economy
Imagine parking up at an airport terminal to pick up your next Uber passenger. You don’t know if she’s washed her hands, whom she’s met, or where she’s come from, but you need her fare to help pay your rent. Ride-sharing apps are becoming germ-sharing apps, but not everyone can take an unpaid leave of absence.
When there’s no harm in the way of drivers and riders, investors in gig economy stocks only see the sunny uplands of massive upside potential. However, this coronavirus exposes a risk. Gig economy companies divide opinion on health and safety standards for workers, and they could soon be subject to some damning regulations.
Some think gig economy contracts are just a new way to underpay workers and get away with providing fewer health insurances. The companies retort by reiterating; nobody is forced to take a gig if the math doesn’t work for them. But that’s only half true.
Circumstances can force workers to keep delivering and driving, such as an increasing rental bill, the costs of child care, or dare we say even an economic downturn.
As markets plummeted yesterday, Uber and Lyft were thrown out with the proverbial bathwater. However, investors quickly fixed up stock prices to reflect the Invstr community’s 91% bullish stance when headlines broke about some new labour policies.
A potential fund is about to be set up to compensate drivers affected by the novel virus. The details, such as whether workers are compensated before or after quarantine or infection, are expected this week, and everyone will be listening in.
If state politicians take kindly to the idea, Uber and Lyft could be spared stringent red tape in the future. That could allow their stocks to leave behind one of their biggest headwinds to date, and make initial public offerings easier for DoorDash and Postmates if they go ahead. Keep ‘em on your watchlist!
