COVID-19 ISO Insights

Sharing Economy Reacts to COVID-19 Outbreak

March 23, 2020

By: Christopher Sirota, CPCU

Ridesharing, home sharing and the gig economy industries are all reportedly concerned with the COVID-19 outbreak, with some already being impacted by it, and others preparing for it.

The Gig Economy

According to MIT Tech Review, unlike many office workers that may be able to work remotely to avoid exposure to the COVID-19 outbreak, some gig economy workers that get paid by the hour and need to deliver something or perform a task onsite, cannot. To address some concerns of these workers, the article notes that:

Amazon, Instacart, DoorDash, Uber, and Lyft have all promised to give their gig workers up to two weeks of sick pay if they can show they have been diagnosed with or quarantined because of COVID-19.

Amazon will also not reportedly penalize workers via "attendance points" if they do not arrive to work during the outbreak.

One gig worker reportedly expressed concern that each delivery location could have a quarantined person onsite that may answer the door, potentially exposing the gig worker to the virus.

In a related article, Reuters reported that the UK delivery service Deliveroo will provide a new option for customers to request food deliveries be left outside so that workers and customers do not have to interact, in an effort to mitigate the risk of exposure to the virus.

Home Sharing

The New York Times has reported that Airbnb hosts, like hotels and other entities in the $688 billion travel industry, have seen a significant drop in business. The Times explains that although large companies like Expedia, which reportedly expects the outbreak to reduce operating profit by $30-40 million, may be able to weather out the loss of business, smaller hotel operators and Airbnb hosts may not have the resources. The article highlights one Airbnb host in Japan which had their occupancy rate drop from 80% in January 2020 to zero, another host in Italy that has had all March 2020 bookings cancelled, and a third host "who hosts 2,000 guests a month in his Las Vegas network of mansions, [and has ] slashed prices on the properties by 10 percent and plans to keep cutting as visitors dwindle."

In addition, the article notes that "Airbnb hosts have become increasingly sophisticated, with mini-economies springing up to cater to the hosts’ needs for cleaning and management of the properties," suggesting that this outsourced industry may also be hard hit by the drop in guests.

Ridesharing

Marketwatch has also reported about some potential positive and negative impacts on the ridesharing industry.

According to the article, one expert expects airport-related trips to drop; such trips reportedly account for about 15% of Uber's business, and about 10% of Lyft's.

On the positive side for ridesharing, one Lyft executive reportedly opined that more people may avoid public transportation, and choose to use ridesharing instead. Furthermore, an Uber executive reportedly suggested that people may also choose not to dine out, and instead order via ridesharing delivery services like Uber Eats.

What about the health of drivers and passengers?

A related Reuters article explains that if authorities alert Uber about a driver or a passenger who has been confirmed with COVID-19 or has been in contact with the virus, it may temporarily suspend their Uber account.

The article notes that in February 2020, Uber "suspended 240 accounts of users in Mexico who may recently have come in contact with someone possibly infected with the new coronavirus."

In addition, to address the health concerns of drivers and delivery people, Uber will reportedly offer 14 days of compensation if they have been diagnosed with COVID-19 or have been quarantined.

Lastly, to mitigate potential contamination of vehicles used in the ridesharing service, Uber reportedly:

said it was working on providing drivers with disinfectants to keep their cars clean, talking to manufacturers to source limited supplies. It said it would prioritize the distribution of disinfectants in cities with the greatest need.