Taxi platforms respond to COVID-19

by Arseniy Svynarenko and Mikko Perkiö

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.

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