13 April 2017

Many workers for online platforms in the gig economy are experiencing the worst of both worlds: subject to tight controls yet without access to standard employment rights and benefits, a University of Hertfordshire academic has told an independent review into the changing world of work.

Citing her latest research findings, Ursula Huws, Professor of Labour and Globalisation, said 57 per cent of people who work for online platforms at least once a week view themselves as employees, despite being classified as self-employed contractors, which denies them entitlements like holiday and sick pay.

Huws said these workers would fail to pass normal tests for genuine freelance status. Their rate is fixed by the online platform, the precise nature of the work is specified, and they have limited rights to refuse work or challenge negative customer feedback or arbitrary suspensions. Sometimes they even have to wear uniforms or sport a company logo.

“This suggests a relationship of dependency, not flexibility and freedom.” she said.

Her comments came at the latest evidence session, held in Cardiff on April 12, for the Independent Review of Employment Practices in the Modern Economy, led by Matthew Taylor, the Chief Executive of the Royal Society of the Arts.

The Prime Minister commissioned the review last year amid high-profile employment disputes involving online platforms like Uber, Deliveroo and MyHermes, which rely on self-employed workforces.

In October a UK employment tribunal ruled Uber drivers should be classed as workers rather than self-employed, and should therefore be entitled to the national minimum wage, holiday pay and paid rest breaks. Uber is appealing the decision.

The review, due to report in June, is considering the implications of new forms of work, driven by digital platforms, for employee rights, employer obligations and existing employment regulations.

Clarity required for new regulation

Huws, whose current research explores the scale and nature of ‘crowd work’ – work managed through online platforms – across Europe, told the review: “It is imperative we establish, very clearly, how platforms and workers within the platform economy should be classified and therefore regulated. At the moment there is complete confusion over which regulations should apply.”

A study led by Huws into crowd working in the UK, Germany, Sweden, Austria and the Netherlands found between five and nine per cent of survey respondents are being paid for work managed by online platforms at least once a week. For one person in 40 across the five countries, this constitutes the majority of their income.

In the UK alone an estimated five million people are being paid for work managed by online platforms in the gig economy, the research found, with 1.3 million relying on it for more than half their income.

Retain flexibility but strengthen rights

The study found that 15 per cent of people working through online platforms described themselves as having more than one paid job. Huws said: “We also found that crowd workers were often registered on half a dozen platforms, from delivery driving to domestic cleaning, which suggests they are scrabbling together an income using any form of work they can find, as opposed to pursuing an active career choice.”

In the Q&A session at the review hearing, Charles Wren, a regional manager at takeaway delivery platform Deliveroo, argued many people see working for several different online platforms as a benefit, and that the importance of this level of flexibility should not be overlooked.

Review chair Matthew Taylor agreed on the importance of flexibility but countered: “There is no reason why having access to better rights such as sick and holiday pay should infringe on this flexibility.”

Online platforms for local communities

Huws highlighted some of the opportunities presented by the growth of online platforms, including providing people with direct access to new labour markets that would not have been previously possible.

But society has to come up with new ways to ensure local economies and workers do not lose out, Huws said. She called for the creation of online platforms that benefit local communities, keeping the value locally as opposed to companies, often based overseas, taking a cut from each labour transaction.

Or as Taylor, drawing the session to a close, put it: “I can see at some point in the future the intermediaries will be disintermediated.”

Full details of the research led by Huws into the platform economy are available here.

In the next stage of the study the University of Hertfordshire research team is carrying out qualitative interviews with workers for online platforms. A final report is due to be published in November this year.