• Gig workers on digital platforms seek recognition as full employees.
• Public bodies are beginning to legislate to ensure labour rights.
• Some platforms are seeking to fight this, but it may not be in their long-term interests.
Protests and litigation by people who work on digital platforms are on the rise and are happening in every region of the world. Research released by the European Trade Union Institute shows a steady growth over the past four years in discontent among workers who work for platform businesses. The 300 cases cited in the report are likely to be a significant underestimate, considering that some are not so visible as they are coordinated on social media without an outward-facing presence, or take place in countries where the authorities censor information.
Wages, employment status and working conditions are among the most common causes for protests, strikes and other forms of industrial action being taken by people for whom “gig” work doesn’t add up to a decent living, or provide the basic respect to which people are entitled. None of these grievances are new to trade unions, but the evolution of the platform business model is posing new challenges for regulators, workers and their unions, established businesses in the formal economy, and even for investors.
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Estimates of how many people actually work for digital platforms vary, with the World Economic Forum putting it at somewhere between 0.5-2% of the workforce in advanced economies. Nevertheless, it is clear that this business model is spreading, in particular as more conventional companies and even public authorities make increasing use of platforms to source goods and services. From a union standpoint, there is diversity in the platform business landscape: Some companies generally respect fundamental workers’ rights, but others, notably in personal transport, delivery, care and media services, refuse to acknowledge any employment relationship with the people who work for them. This is compounded by competition policy, which often treats attempts by these workers to bargain for a fair contract price through their unions as collusion.
Moves to regulation
At the heart of this is the status of the workers, who are today treated as independent in spite of all the evidence of their dependence on the companies for which they work. Regulatory moves and litigation are underway in countries, regions and cities in every region of the world. At the time of writing, the Ontario Labour Board had just issued the latest judgement by a regulator that food delivery workers are not independent contractors, but are in fact dependent on the company they work for and can thus join a union.
Possibly the most notable move is the new law in California, regarded as the birthplace of platform businesses, which pushes back on the misclassification of platform workers as freelancers or contractors. A federal judge recently denied an injunction sought by two companies to stop the application of the law, citing living wages and regulation of employment as the predominant factors in the public interest. Undeterred, several companies have amassed a war chest of some $90 million to fight to exempt themselves from the law in a ballot expected in November.
The Forum’s effort to bring parties together, including platform businesses and unions, to help try to raise standards, is timely in this context. There is of course no substitute for effective regulation to equalize the power imbalance that exists between workers and the companies they work for. But while regulators in many jurisdictions are still failing to meet their responsibilities, the Forum’s effort is worthwhile.
The first output of this work saw the adoption by several platform companies of the Charter of Principles for Good Platform Work. This was a notable step by a number of companies on issues like diversity, reasonable pay and fees, safety, social protection and data – topics that were anathema to some of them not so long ago. But they still have a way to go, as some of the more established staffing agencies have reminded them. The next stage of the Forum’s work will engage with a wider community including policy-makers and workers’ organisations to explore the measures required to ensure strong standards for platform work in practice.
Headwinds for digital platforms
Last June, governments, employers and unions unanimously adopted the Centenary Declaration of the ILO on the future of work. This declaration guarantees all workers what is effectively a labour protection floor, including the rights to union membership and collective bargaining, maximum limits on working hours, adequate minimum wages, and health and safety protections. While governments are responsible for putting such measures into practice, they are at the heart of the social licence to operate that provides stability for any company and helps guard against exploitation.
Regulatory issues around employment responsibilities (as well as challenges around their data practices) are not the only headwinds facing personal-transport platform firms in particular. The inability of key companies to turn a profit, in spite of huge revenues and global reach, has been of limited concern to them, with huge funds such as SoftBank's Vision Fund providing shelter from market realities. There are signs that the honeymoon may be coming to an end, or is at least not as sweet as during the first flush of love, notably after the WeWork debacle and IPO flops in personal transport.
How is the World Economic Forum improving working conditions in the gig economy?
The World Economic Forum is working with Cabify, Deliveroo, Grab, MBO Partners, Postmates and Uber to improve working standards for the tens of millions of people who earn a living or top up their incomes through digital work/service platforms.
The chief executive officers from the six companies have signed The Charter of Principles for Good Platform Work, committing to ensure that platform workers receive fair conditions, treatment, benefits and training opportunities.
By collaborating with partners, the Forum is developing a comprehensive approach to provide clarity on platforms’ responsibilities to the workers who use their platforms, empower platform workers, promote their dignity and well-being, while supporting flexibility, innovation and the value offered by the platform economy to users and clients.
The Forum is looking for platform companies, regulatory bodies, workers’ organizations and independent experts globally who are committed to advancing working standards in the platform ecosystem, to collaborate on the next stage of the Promise of Platform Work initiative. Contact us to learn more.
Without doubt, the immediacy and convenience offered by platform businesses is attractive to individuals and to other companies. But until labour arbitrage is removed from their business models, the pressures on them, not least from trade unions and responsible regulators, will grow and the least responsible of them may end up as expensive footnotes in corporate history.