Every night around dinner time they come – rain, hail or shine – an army of bicycle-riding food couriers taking orders from online apps including Deliveroo and its Australian competitor Foodora.
Along with Uber drivers, Airbnb hosts, Airtasker tradespeople and a multitude of others – they have become the face of the brave new online economy, or as it’s come to be known – the gig economy.
The gig economy refers to a growing trend of workers abandoning the 9 to 5 work pattern in favour of working on a task-by-task basis for various peer-to-peer or app-based platforms.
As the gig economy employment model expands into many new industry sectors, courts and regulators are being forced to confront the question of whether this new tranche of workers – whether Uber drivers, food deliverers or others – should be classified as employees or self-employed (independent) contractors.
The workers enjoy varying levels of freedom to work when they choose because the company doesn’t officially employ them but rather offers a service such as providing access to customers and a payment system via smartphone based apps in the case of Uber and Deliveroo.
There’s no doubt the rise of gig economy workers (sometimes referred to as “contingent” workers) is disrupting traditional employment patterns. While precise numbers are impossible to pinpoint, a recent Intuit future trends report predicts “in the US alone, contingent workers will exceed 40 per cent of the workforce by 2020”.
That may be overstating it – at present in Australia probably less than 5 per cent of the overall workforce in gig economy jobs.
However, as the sector grows, so too does the level of scrutiny it comes under. While the Australian government and industry groups are keen for the gig economy to grow, an increasing number of workers, unions and industrial relations lawyers here and overseas are raising urgent questions about the erosion of long fought for employment rights and entitlements and sham work contracts.
For young people such as Alison Millward, a 23-year-old former Latrobe University student, freelance videographer and volunteer scout leader living in Brunswick, working for Deliveroo appealed because it offered immediate employment and the flexibility to work according to her own hours.
“It combined two things I enjoy a lot – cycling and being able to pay my rent,” she says.
Millward worked for Deliveroo for six months not long after it was launched in Melbourne in late 2015. Dropping off dinners around the streets of Carlton she was paid $18 per hour plus $2.50 per delivery. Out of this she had to cover all her own bike maintenance, as well as the costs of ensuring her smartphones had enough data to cover long shifts.
Millward says that despite Deliveroo boasting of its flexibility, she was expected to work at least two out of three ”peak shifts” per week on Friday, Saturday and Sunday evenings, with no penalty rates.
“On top of that, if we were sick and couldn’t make a shift then we’d no longer have that shift the next week, and have to try to trade with other riders to get the shift back. We also had no guarantee on the number of shifts we would get, and they could be cancelled at any time by Deliveroo.”
Eventually when she couldn’t meet Deliveroo’s expectation of working peak weekly shifts, Millward received an automated text message saying she’d been permanently taken off the system due to inactivity.
“I was fired with no warning using an automated text message for not doing enough shifts. They never responded to my follow-up emails,” she says.
For Pat Perone, a 22-year-old university student in Sydney who rode for Deliveroo for about five months, his main complaint was lack of training to deliver food in busy traffic conditions.
Perone says Deliveroo provided just one training session where he rode with a mentor, themselves untrained.”I was then asked to mentor riders after my second shift, even though I received little training myself,” he says.
When contacted by Fairfax Media a Deliveroo spokesperson responded that riders work as independent contractors. “They are free to choose when to log in or log out from the app and where to spend their time when not working with us. Increasingly these days we find our riders are busy going from order to order when logged in. We use a variety of mediums to keep in touch with riders, including in-app messaging, calls, text messages and email.”
In a landmark ruling in Britain on October 28, an employment court rejected Uber’s assertion that its drivers are “self-employed” and ruled that they are therefore entitled to a minimum wage, holiday and sick pay.
The ruling, which Uber has said it will appeal, could affect 40,000 Uber drivers in Britain and have serious ramifications in Australia.
Uber has long argued it is simply a ride-hailing app that connects passengers with drivers. But the court described the claims of Uber Europe general manager Jo Bertram that London Uber drivers were not employees but a mosaic of thousands of small businesses linked by a technology platform as “faintly ridiculous” and “twisted language”.
The final judgment included: “Uber does not simply sell software, it sells rides. Uber is no more a ‘technology company’ than Yellow Cab is a ‘technology company’ because it uses CB radios to dispatch taxi cabs.”
In response to Bertram’s claims the British court quoted Queen Gertrude’s most famous line from Hamlet: “The lady doth protest too much, methinks.”
Daniel Victory, senior associate for Maurice Blackburn lawyers in Melbourne, is working with a group of Deliveroo riders on underpayments.
He said they are hoping to launch Federal Court action later this year under the Fair Work Act claiming that Deliveroo has engaged in sham contracting and that its riders should be treated as employees rather than independent contractors – a move that could affect all gig economy companies operating in Australia.
Victory is cautious about whether the British ruling would apply here but says local courts will have to consider similar questions – such as how much control does Uber exercise over its drivers and whether Uber drivers are really running their own businesses. “If Australian courts reach the same conclusions as the UK Employment Court, it is possible Uber drivers in Australia could also be held to be employees,” he says.
He said that Deliveroo riders would have an even stronger case than Uber drivers to be considered employees as they wear company uniforms and are rostered on shifts.
Anticipating the legal challenges stirring up around the world, several competing apps are taking the initiative to give consumers more choices. In Canada, a new online taxi service, TappCar, markets itself as offering rides where the driver will have proper employment rights including insurance and a pension – and for this the customer only pays around 5 per cent more than Uber.
Les Johnson, secretary of the Ride Share Drivers Association of Australia (RSDAA), told Fairfax Media that the British ruling is so recent that most Uber drivers in Australia probably weren’t aware of it yet.
Johnson said what most drivers wanted was a “fair and equitable contract with fair and sustainable rates of remuneration for their efforts”.
“There are many drivers in the ride share industry who have been promised highly exaggerated rates of pay for their efforts only to find that it falls far short of the promises, by the time they take their expenses out of their earnings they are left with little or no profit.”
Jim Minifie, author of a recent Grattan Institute report Peer to peer pressure: policy for the sharing economy, says it’s too early to determine how much of an impact the gig economy will have on overall workforce conditions because it’s such a small part of the economy.
“If it ends up being a big deal in the world of work, we’ll need a new approach to labour regulation,” he says.
“The gig or sharing economy reduces the barriers to small one-off transactions between strangers, so there’ll be more of those sorts of transactions. That includes work that otherwise would have been done under some company brand or even under some kind of regulation.”
However, the flexibility of more self-managed work arrangements is providing welcome and much needed new income streams for some Australians in a tight employment market.
Adam Gardnir, from Brisbane, says he first started driving for Uber when his full-time job in the arts industry underwent a structural change and he became redundant. He says he earns between $20-$40 per hour as an Uber driver.
“Uber offered an immediate safety net which greatly relieved the financial stresses of the time. I was then offered a promotion back at that workplace so Uber became a weekend gig for me.”
On top of this he and his partner rent out their spare room on Airbnb up to five nights a week for between $50 and $100 a night. “So you can see we relate the Uber and Airbnb incomes to those assets. Uber covers the car loan and Airbnb contributes to the mortgage, thus we live without car payments and almost rent free.”
Gardnir is suspicious of attempts to over-regulate the gig economy job market. “I doubt we’re ever in a position where the balance [between workers’ rights and the share economy] is absolutely perfect, and even if we got close, new factors are always influencing change. The internet has opened up business opportunities for everyone and the ruling class hate it,” he says.
But Daniel Victory believes Australian courts should be called upon to ensure workers in the gig economy are receiving the minimum wage and employers are held to account to provide proper safe, fair and equitable work arrangements.
“All workers, regardless of their classification, should receive a fair day’s pay for a fair day’s work. Also, the companies that are reaping the benefits of operating in our society have to pay their fair share of the costs. Governments should be enacting laws that enshrine these principles,” Victory says.
Alison Millward, who no longer rides for Deliveroo, also believes gig economy workers should be treated as employees under the law. “We wear a uniform, have a set rate of pay that we cannot negotiate, are paid on a set schedule rather than by invoice, and are in no way running our own business. Riders do a dangerous job and should be insured by the company,” she says.
“No one else should have to get insurance from their parents as a Christmas present.”