Does the Gig Economy provide a fair deal?

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Despite its undeniable conveniences, it’s becoming increasingly clear that the gig economy isn’t always delivering a fair deal for everyone involved. The Victorian Government has received nearly 100 submissions so far to its inquiry into the ‘on-demand’ workforce. The major theme among the workers, unions, businesses and academics who have submitted? Exploitation of staff and unfair business advantage.

Maybe it’s not that surprising that workers without access to minimum employment standards or collective bargaining are vulnerable to exploitation. “We’re all benefiting from the gig economy – there’s probably very few Victorians who haven’t used their services – but we can’t allow convenience to get in the way of a fair go for workers and businesses,” says Victoria’s Minister for Industrial Relations, Tim Pallas.

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It appears that the gig economy success is dependent on its ability to bypass existing regulations and government policies. The more regulated an industry, such as employment, the more attractive it is for gig companies to set up regimes to disrupt the status quo. Many disruptions only benefit the early entry gig companies as they try to maximise their market share and shareholder value as quickly as possible before other parties enter the same gig economy and potentially dilute their worth.

Today we might, but the future?

I expect more companies entering in the same gig economy won’t create competition, but in the long run, most of these players will fall to the wayside until a monopoly like that of Google, Facebook etc is created. When the successful business has a monopoly, this is when return on investment will occur as they will dominate and control the market/gig economy. There will be carnage on the pathway to a monopoly, and no one will win (except shareholders of the monopoly business).

I might be pessimistic, but there is sufficient precedence that this is what most likely will happen.

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This is the link to the Victorian Government Gig Inquiry website and received submissions:

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Who in the Choice Community has been in business for themselves as a service provider?

There may be some very clear concerns with the so called Gig Economy.

The service providers, some kid on a bicycle (e-bike or scooter) is often our observation. Once upon a time pizza deliveries came in the back of a small car or motor bike. Nothing else was home delivered. Personal taxi transport, EG Uber etc has it’s own challenges.

The Gig Economy appears to be driving employment, oops independent contacting income to new lows. Lower even than several large national pizza chains that make use inner city of e-bikes and casual under 18yr old staff to help keep costs down.

While the hours and intermittent work may suit some, who pays the workers compensation for each contractor? If that is what they really are. How fair are the contracted rates in equalising for other benefits and entitlements that would reasonably be expected on longer term arrangements? Who manages the safe hours of work routine of each contractor? Is it OK in our society to have members of the society including foreign temporary workers and students studying full time or holding down multiple part time jobs riding tired through broken sleep or rest periods?

The catch is the foreign and some local businesses that facilitate the Gig Economy are not held to account or responsible. It’s doubtful where the cash flows end up and whether there is any tax benefit to the national economy.

While the state governments (great to see Victoria show interest) can assert some control, taxation and the operation of foreign owned and controlled businesses in Australia are a Federal Govt responsibility. Currently not a lot is being said at that level.

Although apparently (incredulous as I might appear) we have a labour shortage and need to bring workers in from overseas to work on our farms. Perhaps we could alternately start a Gig Economy project labelled ‘Aglab’ or similar and contact Aussies on e-horses to work on the farm. A real opportunity for anyone on Newstart to get a pay rise, and still come in under the low income tax threshold?

Which ever way the Gig Economy develops there appears to be a simple choice for consumers. To support the status quo because we are happy to benefit from and take advantage of the services, or to not use them until such time they deliver to consumers true Aussie values of a fair go!

P.S. Eat in or takeaway, home delivery should cost extra and be a separate line on the bill so I can see just how much there is to save by picking up myself. It works for the local fish and chips, Chinese, Indian and Korean. The last are in the next town though which suggests a night out. :wink:

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(Start Rant/)
This is a case in point of how far after the event Government legislation lags because politicians seem (on the whole) to be developing policy in a reactive fashion lurching from crisis to crisis.

It seem like the core platform of most political parties is ‘ignore it until it hits the fan’ !

There are enough experts out there who could advise Goverments on how to tackle the future, but they tend to be ignored and vested interests given priority. Policy is then developed which is biased to the vested interests, but dressed up as a solution; problems are ignored; untimately making matters even worse. Start the cycle again.

This seems to be what is happening with the gig economy, as it did with climate change, water use, power, finance industry, mining, nursing homes, etc. etc.

Someone [usually consumers, but sometimes small businesses/business people] always loses, except the large corporates that sucessive Governments seem oh so scared to confront.

Governments need ‘futurists’; forward thinking people who make predictions on what will be happening years into the future. It should be noted that their predictions are as accurate as those of economists which Governments rely apon heavily. Fore-warned, Governments could start to develop frameworks for the possible futures so we are at least a little bit prepared should the predictions become true.

(End Rant/)

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California has been grappling with how Uber drivers are dealt with in relation to work/employment laws. The California Supreme Court found back in 2018 in effect found that Uber drivers were employees of Uber and should have the same rights as any other employee of a company. Uber had agrued that their drivers were not employees and instead independent contractors. Uber has been fighting the court decision as well as the Californian government to prevent it legislating Assembly Bill 5 which in effect legislates the outcomes/decision of the 2018 court case.

Yesterday Assembly Bill 5 passed the Californian senate…this law which was passed in effect requires gig economy workers to be reclassified as employees instead of contractors

The Californian decision may bring fairness back where gig companies have exploited legal loop holes to remove any responsibilities in relation to their individual or ‘independent contractors’.

It is interesting to note that the ATO (or government) has specifically excluded drivers deriving income in connection with ride-sourcing arrangements from being potentially classed as employees for income tax purposes.

While US and Californian employment laws are very different to that in Australia, it does set a precedence in relation to how a western jurisdiction deals with those gig economy employees which prior to this ruling, had limited if no rights by the gig companies as they were classed as individual or independent contractors.

I expect that Victorian (and potentially other State) Governments will look into the precedence set by California when reviewing contractual arrangements by gig companies with their drivers, couriers etc.

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It will also be interesting to watch any further developments in the application of Work Health and Safety. This is primarily a state responsibility.

Are businesses such as Uber a Principal Contractor in respect of the relevant legislation? Who provides the assurances and customer insurance for each ride? Options include the Uber driver, the vehicle owner (possibly not always the drivers vehicle), or Uber. Other Gig workers may also be exposed in similar situations.

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No, not unless they are in the construction industry. Maybe Uber might try in the future with ‘Uber constructions’ hoping this this line of work will turn a profit.

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I’m not convinced Uber drivers, their vehicles and the Uber Business are exempt from application of the legislation, in some way?

S8 - (2)(a) seems to say a ‘vehicle’ is a workplace.

In one context the question asked is rhetorical.
Ultimately each state government and the legal profession will decide if needed.

I prefer the legislation as a primary reference. For Qld it is very broad in what it covers. The legislation is not restricted or specific to construction. Even the activities of volunteer organisations are captured.

https://www.legislation.qld.gov.au/view/pdf/inforce/current/act-2011-018

P.S.
It seems to apply to the taxi industry! Should Uber be any different?

The Gig economy might appeal as being totally free and open?
Reality asks,
Are organisations such as Google, Amazon, Uber, etc any different to totalitarian states?
They largely make their own rules for inclusion, while exclusion is absolute.

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The ATO definition of what is an employee and what is a contractor may be more useful to help determine the status of a person in their work. Except it actually removes ride-sourcing activities from the tool. But if you apply the test disregarding that it says the person is an employee (my choice about ABN was yes, no & unsure as I tested all) . I know this isn’t an answer but must point to some degree that what we have is an employer/employee arrangement but someone/some others have chosen to exempt the industry from the normal rules.

https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=ECDTSGET&anchor=ECDTSGET/questions/ECDT#ECDTSGET/questions/ECDT

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They aren’t exempt to laws in the country they operate. In Australia, when Uber when it first operated, it operated illegally to try and muscle in effect change (a disruption). They forced the government’s hand like they did in other states where taxis were highly regulated.

The above outlined that aren’t a principal contractor as this only applies to a construction/building site. Principal contractor provisions therefore don’t apply to Uber, unless they chose to start a construction company…even then their drivers would not come under the PC umbrella as they are not a construction/building activity.

Under the QLD WPH&S Act linked above, Uber drivers would be possibly classed as an independent contractor under such legislation. This possibly wouldn’t be known as fact until such time it was tested.

In California under their employment laws, their courts determined that drivers were employees of Uber snd not independent contractors. I don’t know the status under the California WPH&S laws were determined as it could be different or the same.

In QLD and possibly other states, independent contractor status would need to be determined under the relevant employment legislation. This website gives a view on what an independent contractor, in relation to employment (not no t e WPH&S), is in Queensland.

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ABC news story on those working in the gig economy…

On the weekend, I happened to discuss share driving with a good friend who is an avid user of the services. He mentioned that last week he caught a Uber where the driver also used the Didi and Ola Apps to find potential customers. My friend was interested to know why the driver used three different ride sharing apps and was told the following story…

The driver indicated that he was unskilled, mature and had little opportunity to find any good paying work. He had been a taxi driver making a modest income up until about 3 years ago. When Uber took off, he found his income from taxi driving was significantly impacted.

He made a decision to switch to Uber and made a even more modest but somewhat reliable income. Soon after switching to Uber, his income also started to decline substantially and he put it down to two things…more drivers using the Uber app to try and make money and competition from new entrants into the market, namely Ola and Didi. To try and maximise his potential income, he also then took up the Ola and Didi apps and now searches for potential customers on all three at the same time.

What he said is that his income continues to decline and he not earns around $6-8/hr in a good week. To compensate for the loss of income, he is now working much longer hours. He indicated that at times he will work until he thinks he as earned enough or he is so tired he is having trouble staying awake. He commonly works 24-36 hours straight, has a sleep and then returns to driving (not much of a life which is the part of the ABC news article.

He said that he never was allowed to work so many hours when driving a taxi as the taxi company restricted the number of hours one could work (assume as part of a fatigue management plan). He said fortunately there wee workaroundable restrictions with the three apps he uses and he can effectively work as much as he likes. This is the case even though some of the apps have hours of activity restrictions (such as Uber - The Fatigue Management feature (of the App) will take you offline for 8 consecutive hours if you have been online for 12 cumulative hours without a consecutive 8 hour break.’

I indicated to my friend that I am flabbergasted that this is allowed as it is known that fatigue is a real problem with driving and is one of the main causes of road fatalities. I also said that did he raise this in his review and he said he felt he couldn’t as he didn’t know if the driver was fatigued at the time and was concerned for the livelihood of the driver in question.

Doing a bit more hunting, it appears that while some apps have a fatigue management feature, some don’t and it is up to the driver to manage ones own fatigue. In addition to the above information about the Uber app -:

  • Ola provides information in relation to fatigue management, but is is up to the driver to self regulate their own fatigue management.

  • Didi indicate that Didi ‘drivers may be temporarily locked out of Didi Australia driver app after long periods of activity’.

While this is well and good and seems like a responsible response from the companies in relation to their driver fatigue, in effect, the drivers have workarounds which allow them to drive for multiple companies for extended periods with no action. All a driver needs to do is overlap activities between apps and turn on off from time to time to convince the app that a break has been taken, when in fact the driver has been working for other ride share apps instead.

The Queensland State Government (and expect other governments are similar), have identified the potential issue, but their response seems a little inadequate as one could argue that the fatigue policies on the app websites meet the requirements that they have taken reasonable measures.

I asked my friend if he is concerned about driver fatigue as it seems that it may be a significant problem, especially for those drivers which use multiple apps to try and make a living. He said he was a little, but only used Uber in inner city areas where a high speed crash is unlikely to occur and where risk of injury from an accident is less. I make the comment that one can die in a car doing relatively low speeds.

I wonder if the fatigue management within ride share industry has been well thought out by the regulators, and whether the industry should move towards log book type systems used by the heavy vehicle industry should be rolled out further to ensure that the consumers using ride share are not subject to fatigued and risky drivers.

Initial thoughts is this could be done electronically using an app that registers and records activity directly with each of the approved ride share companies (data obtained from the company rather than the driver’s phone). Doing on a phone level could easily be bypassed using multiple phones with different apps installed on different phone.

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The gig economy has much in common with each participant required to evolve to being an independent mercenary for their survival.

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A very challenging situation. It’s a good place to start, however consider;
The individuals driving can just as readily also have a job at a 7-eleven counter or, home business or …?

Fatigue can be accrued in so many ways. There is no simple roadside pass fail test, as there is with alcohol or drugs.

As the Uber and other ride share drivers are effectively independent contractors, they too have a legal responsibility to manage their safe hours of work and fatigue. That’s independent of the service facilitators moral rubber stamp!

Is there a simple solution? For hours behind the wheel perhaps there are options. For total wakeful hours and rest periods over a week, it might take a 24hr locked on body monitor and gps tracker to be sure. I’m not aware if George Orwell made that prediction.

P.S.
Old time taxi drivers were not adverse to holding down more than one job. However unlike Uber etc who might blame the odd bad owner driver, the big taxi operators and license owners may have valued their reputations and vehicles more directly.

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Beyond fatigue management, a new reality of work vis a vis living?

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A snippet from the press. No wonder people, especially younger ones, have ‘attitudes’ about work as well as life. Just mind boggling.

Jem Wolfie, 28, has more than 2.7 million followers and had made more than $2 million from the account, where she posts fitness tips, recipes and modelling shots.

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And what of the 2.7million aspirants who will not ever earn $2M?

Reality is there is only so much total wealth in the world. I wonder if it was all divided up equally if any of us could afford more than a bicycle and two room cottage?

It must be a hard landing for those who still seek the dream and fail to connect with reality. Shattered dreams shattered lives?

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That reminds me of the story back in the Soviet era when an English aristocrat asked his butler, who was a committed member of the local branch of the UK communist party and never missed the monthly party meeting, why he had suddenly stopped going.

The butler replied that at the last meeting he had attended, they were told that if all the wealth in the country was divided up equally, then everyone woud have £10,000.

The aristrocat queried as to why that was a problem for the butler.

The butler responded 'Well, I have £20,000".

Nothing quite like the old vested interest and human greed.

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The media is catching up with the forum re topics.

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The taxi industry that was controlled by limiting the supply of service. This ensured that the owners of plates made a tidy sum and the drivers made a bit but were hardly well off. A kind of distributed monopoly, a vested interest of owner collectives. But at least there was competition between the collectives. This was a decidedly closed market model which was directly supported by government legislation.

Then another vested interest busts that model, in theory the supply of service is now endless but now the drivers make even less. This purports to be a free market model. One would have to doubt that this will be the case in any market where Uber achieves a monopoly or close to it. This is enabled by lack of government legislation.

Can we conclude that governments favour closed or free markets?

Neither: they favour vested interest over the drivers and bugger the economic theory.

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