Reforming the gig economy
The gig economy is here to stay. Convenience is comfort for many, but how are the people working for that convenience faring? Now more than ever, our lives are being delivered at all hours, mostly by gig workers and facilitated by the digital platforms built and run by multi-national corporations. Exasperated by the COVID-19 pandemic, a clear duality has emerged, whereby grossly unprotected gig workers bring takeaway food and shopping parcels to those reorienting around a safe and convenient home and work space. We must do more than simply notice the teal Deliveroo riders, the piles of boxes, and the delivery vans clogging our city streets. We must think about how technology’s efficiencies and conveniences can be enjoyed without the deterioration of basic employment rights.
Changes to consumption
As many of us moved inside to the safety of our homes during the pandemic, we changed what and how we consumed. Unsurprisingly, 2020 saw huge growth for some products; household cleaners, soap, vitamins and coffee, and a decline in others; cosmetics and sun care. Food delivery and e-commerce quickly became essential habits of the imposed lockdowns and restrictions. Although e-commerce has been growing for years, the pandemic is expected to accelerate its growth to levels that would have otherwise taken years to reach. For example, Uber Eats, which controls around 29 percent of the global food delivery market saw a 152 percent increase in revenue in 2020.
Meanwhile, The New Yorker reports that in the year leading up to April 2021 alone, Amazon US grew its workforce by about 400,000 employees. The company’s total direct workforce now exceeds 800,000, not including the hundreds of thousands of delivery drivers who, like gig workers, are employed as contractors. In Australia, Amazon has been building ‘fulfilment centres’ across the country since 2017 when it opened its first facility in Dandenong South. There are currently four warehouses operating nationally, and this number continues to grow with the construction of a new ‘robotics fulfilment centre’ in Sydney’s west, its largest warehouse in the Southern Hemisphere, and a second Melbourne site in Ravenhall. Australia Post reports that online sales now account for over 16 percent of total retail spend, a sharp acceleration which brings Australia into line with pre-pandemic habits in the UK and US.
The gig economy
As brick and mortar retail and hospitality jobs disappeared overnight, many turned to gig jobs to supplement lost incomes and ensure survival. Gig work is commonly understood to mean the exchange of labour for money between individuals and companies via digital platforms which match the provider with the customer. Workers are paid for the individual ‘gigs’ they perform rather than a regular wage, and are often given ‘rankings’ by customers which can impact how many gigs they are allocated. Despite its popularity amongst consumers, who quickly embraced ride sharing and delivery apps, the gig economy remains controversial amongst governments and labor rights advocates. This is because it bypasses the standard employer-employee relationship that forms the basis of most labour law and social protection systems.
Instead, gig workers are classified as ‘independent contractors’, not employees, and are consequently not covered by employment laws and regulations. This means they’re not entitled to the minimum wage, dismissal protections and other employment rights, occupational health and safety protections and workers compensation schemes. Gig work sidesteps the safety net that such laws are designed to establish, particularly for vulnerable and low-wage workers. Categorising workers as contractors is fundamental to gig companies’ business models. By denying workers these rights, companies reduce their labour costs and maximise their profits.
In negotiating our congested city roads, workers on bikes and motorcycles are thrown into dangerous situations on a daily basis. Furthermore, the importance of quick delivery times to a gig workers’ income and rating can pressure riders and drivers to speed and take on other unsafe behaviours, including using smartphones to navigate.
These occupational safety risks are inherent to the business model and have had tragic consequences; five food delivery riders in Sydney and Melbourne died on the job between late September and November 2020 alone.
The approach of gig companies to labour law reflects Big Tech’s ‘move fast and break things’ culture. Unsurprisingly, when the things being broken are long-standing social safety nets, gig work has become a key labour rights battleground.
Where to next?
It is now hard to imagine a time when we didn’t get our weekly groceries brought to our front door, or when Amazon purchases arrive within two days. However, our laws must adapt to consumer choices in a way that protects vulnerable workers. So how can we fix the very real and consequential disruption that the gig economy has created?
In many ways, the gig economy horse has bolted and addressing its problems doesn’t mean turning back time. Some solutions reimagine the gig companies’ business model entirely. Worker-led delivery collectives are popping up across Europe. The ventures tend to be small and governed democratically, using consensus decision-making to manage operations. Riders take a greater share of earnings and help to manage operations. Restaurants are also better served under co-operative models, which usually charge 10-20 percent of the total order as compared to 30-36 percent taken by big delivery companies. Similarly, ethical food delivery models backed by trade unions are being tested as alternatives to gig work.
In Sydney, Menulog is trialling the reclassification of all workers as employees instead of contractors. Greater consumer awareness of these alternate models could help the shift to more ethical norms in the delivery sector. However, such smaller models face challenges in overcoming large gig companies’ brand recognition and ability to win customers by flooding the market with promotions like free rides or deliveries.
The most universal ideas for reform usually rely on regulatory intervention to ensure that our laws regulating the gig economy are fit for purpose. A recent Victorian State Government inquiry recommended, amongst other reforms, clarifying and codifying the work status of gig work and application of entitlements, protections and obligations for both workers and businesses. These changes require intervention by the Federal Government, which oversees Australia’s national workplace system. The voices of gig workers must be central in all reform efforts. It is important to note that some gig workers prefer the flexibility and autonomy of self-employment and feel they can earn more money being paid per gig than if they were direct employees. Others are migrants on temporary visas and without family or social support will take any job they can get.
Reform must address these diverse needs and preferences. This might involve mandating that gig companies offer workers the choice to be hired as a direct employee, and that those who continue to be engaged as contractors must be proven to be genuinely ‘self-employed’ small business workers.
Alan, a rider who has worked for multiple delivery companies in London and Seville, says that “If you want to get workers on board, any reforms will likely need to be presented with evidence of an unambiguous improvement in working conditions, most of all in pay and not losing any flexibility of access to the work.”
Our reliance on expanded digital infrastructures and platforms has permanently changed the way we live and work. But the gig economy, which so many of us relied upon to get through the last year, cannot be resumed as normal. In our pandemic recovery, we can embrace its benefits without turning a blind eye to the impact it is having on workers’s lives.
This story was produced for our issue #14 Work. To grab a print copy (and pay only postage) head over to our shop.