Scottish expert advisory panel on the collaborative economy: evidence paper
The Scottish Expert Advisory Panel on the Collaborative Economy makes recommendations on how Scotland can position itself in the collaborative economy.
3. Peer to peer transportation and logistics
The second evidence session of the Scottish Expert Advisory Panel on the Collaborative Economy in July 2017 focused on peer to peer transportation and logistics. Agenda and minutes of the meeting, as well as any submissions received, are available online  .
Workers’ rights in the collaborative economy is an area that has attracted considerable attention recently, and gained further publicity with the launch of “The Taylor review of modern work practices”  . This area is the focus of the next section of this evidence paper, ‘Workers’ Rights’.
PwC  describe peer to peer transportation as individuals sharing a ride, car or parking space with others. They estimate that peer to peer transportation is the largest collaborative economy sector in Europe by revenue, at €1.65 billion. It has been forecast that logistics will be the next industry to undergo digital disruption by streamlining the pick-up and delivery of shareable assets, lowering of transportation costs.
In its survey, YouGov found that two of the most common reasons for using collaborative economy platforms amongst Scottish users are:
- receiving same day/expedited delivery, e.g. through Nimber (24 per cent); and
- using a ride-hailing app, e.g. Uber (21 per cent).
b. Scottish specific data
Uber provided statistics in relation to their level of activity in Scotland:
- 500 to 1,000 drivers, evenly split between Glasgow and Edinburgh (where Uber’s services are available);
- 48% of drivers using Uber for 30 or more hours, 27% for 40 or more hours;
- Average wage of around £15 per hour after Uber’s service fee is deducted (but before accounting for other costs, e.g. fuel, maintenance, insurance);
- Over 90,000 people have used the service in Scotland since launch;
- 95% of trips with waiting time of less than ten minutes;
- Majority of trips in the evenings and on weekends.
Deliveroo also provided statistics in their submission to the panel:
- Every week, 750 people apply to ride with Deliveroo in Scotland;
- Riders across Scotland make, on average, over £8.50 per hour and work for around 15 hours per week;
- 60% of riders are under 25 years of age;
- Deliveroo work with over 450 restaurants in Scotland;
- Restaurants who use Deliveroo see their revenue boosted by up to 30%.
Based on Liftshare’s estimates, “ each commuter regularly liftsharing is estimated to save 1 tonne of Co2 a year, or 10% of their total emissions”.
In relation to bike sharing, Strathclyde Partnership for Transport ( SPT) noted that “ around two-thirds of Scottish households do not have access to a bicycle for private use” and that this issue has an equity dimension to it, as bike ownership stands at 17% among households with an income below £10,000 and 61% among those with an income above £49,000.
c. Opportunities and benefits
Evidence submission to the panel highlighted the scale and growth rate of the peer to peer transportation and logistics sectors, and the extent to which these models have become mainstream and are widely accepted by consumers. These include:
- Private hire drivers using a range of eHailing platforms;
- Delivery and logistics services; and
- Vehicle-sharing services.
Respondents also noted the potential for the collaborative economy to significantly change how transportation services are designed, provided and paid for.
In relation to the private hire sector, they identified the following benefits and opportunities:
- Potential to extend employment opportunities for private hire drivers, providing them with more routes to reach customers, and to empower drivers through enabling them to work independently of booking offices. Uber indicated that their drivers “ have control over if, when and where to drive, as well as whether to buy, rent or lease a vehicle” and “ are entirely free to work elsewhere at the same time, for example delivering parcels, or to use Uber while also working with another private hire operator”.
- Potential for reduced private hire costs to the general public as a result of increased competition within the sector (although this might raise concerns about whether competition is fair).
- Potential to improve customer experience (and driver experience) by changing the way in which people book and pay for services.
- Increased transparency through rating systems. Uber noted out that “ before taking a trip request, a driver is shown a rider’s rating and vice versa; and at the end of a trip, both rider and driver rate the experience”.
- Potential to improve transport accessibility and other issues in rural areas. In particular, SPT highlighted “ limited public transport options, higher transport costs, longer journeys, lack of walking and cycling infrastructure, reduced accessibility, social exclusion, and car dependency”.
Benefits and opportunities identified in relation to the delivery and logistics sector were:
- Benefits to rural communities and businesses: collaborative platforms may support goods delivery (e.g. food/drinks) and service provision (e.g. tourism) that would not otherwise be feasible.
- Creation of new (direct and indirect) employment opportunities. Deliveroo indicated that they “ have helped restaurants to secure new customers who not only order food at home via Deliveroo, but who will also eat in at their venue at a later date”.
- Potential to increase use of transport assets across health and social care, non-emergency patient transport, community transport, demand-responsive transport services, and ‘socially necessary’ public transport.
- Potential benefits for the wider transport systems  .
Benefits and opportunities identified in relation to vehicle sharing were:
- Potential to improve sustainability of transport systems, and to reduce pressure within some systems, which could lessen the need to introduce demand-restraints such as workplace parking charges.
- Potential to improve efficiency of transport in rural areas. IPSE (the Association of Independent Professionals and the Self Employed) highlighted “ opportunities to those living, working and travelling within rural locations, particularly where public transport is limited or seasonal due to commercial viability”.
- Potential to reduce the environmental impact of transportation, by reducing traffic congestion, emissions, on-street parking, and demand for car parks, and more generally by supporting more sustainable travel behaviours.
- Potential to expand social networks and potentially improve community cohesion.
- Potential to reduce the overall cost of car ownership, making car use or ownership accessible to those for whom it may be otherwise unsustainable.
d. Challenges and barriers
A number of points were raised in relation to the challenges and barriers to growth of transportation and logistics within the collaborative economy:
- Need for changing attitudes and behaviour across the Scottish population, specifically in relation to peer to peer car sharing models.
- Concerns that media attention and support has focused on commercially focused platforms, at the expense of ‘pure’ sharing economy models, and need to differentiate between the two.
- Concerns that current regulation and enforcement might not be appropriate for new business models, and that clarity is needed on how collaborative economy platforms are classified (e.g. technology companies or transport providers). In their submission, the Scottish Trades Union Congress ( STUC) said that “ it is not acceptable that certain companies are handed a trading advantage or allowed to consider themselves exempt from employment rules simply by talking in terms of ‘sharing labour’ or ‘facilitating trade’ rather than offering goods and services in the traditional manner”.
- Need to ensure appropriate protection for consumers. For example, the Scottish Taxi Federation indicated that “ the issue of part time (collaborative platform) drivers versus full time (traditional taxi) drivers is likely to affect the safety of passengers, particularly where remaining full time drivers feel compelled to work longer shifts to maintain a living wage”.
- Need to ensure appropriate protections for drivers, specifically in relation to employment status, workers’ rights, impact of rating systems, etc. (more on this in the next chapter of this evidence paper, ‘Workers’ Rights’).
- Lack of community feeling among providers.
- Concerns regarding possible discrimination of both drivers and consumers. Close the Gap noted that “ users can make selections based on characteristics other than qualification for the task, including age, gender, race, or ethnicity” and “ reviews are highly subjective and likely to be influence by biases and discriminatory attitudes”.
- Concerns that traditional operators may be subject to unfair competition if new business models are subject to a reduced regulatory and taxation burden (e.g. there are well-developed regulatory frameworks for the taxi sector, including the focus on consumer and driver protections, but limited regulations applying to private hire operators working within the collaborative economy).
- Lack of suitable insurance products.
- Lack of a consistent approach on the licensing of vehicles (where this is devolved to local authorities).
- Insufficient access to funding for collaborative platforms, and lack of support or promotion for peer to peer car sharing by local government.
- Need to balance the development of innovative transport models against protection of public transport networks and risk that these new models could be over-promoted at the expense of public transport options. SPT noted that competition between public transport and peer to peer providers might lead to ‘overprovision’, which in turn “ might bring about the closure of traditional transport services”.
- Concerns around the potential for collaborative economy providers to develop a monopoly through use of artificially low pricing supported by investors’ funds, which could ultimately lead to substantial price increases for consumers. The Royal Society of Arts ( RSA) noted that “ there is competition in theory, and then there is the reality of market share and finance. It is going to be very difficult for any other platform to match the level of investment that Uber has”.
- Limited access to high speed broadband and 3G/4G in remote rural areas.
- Potential to increase emissions if the growth of peer to peer transportation providers leads to a greater overall number of cars on the roads.
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