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Gig Economy

Posted on: 09 Jun, 17

Looks like we’ve stumbled across an old fashioned shootout – but don’t worry, Oury and Clark are only firing words at each other! Who is going to win this duel at the courts?

Oury, we’re due at a meeting across town soon, I’ve called an Uber and it’ll be here in 4 minutes;.

Yeah, I’m almost ready, just finishing a vegan chicken burger that was dropped off by Deliveroo, will be ready in 3.

VEGAN chicken, are you for real?

Sure am, but I’ll explain on the way… and I have to say, I really feel like I’m taking full advantage of the gig economy.

Is “gig economy” in danger of becoming a cliché, or does it actually mean something? I mean, whenever I hear the word used, I just see a bunch of wannabe musicians celebrating because some pub landlord has agreed to pay them for a gig!

Well, that’s the reference, but the gig economy is something that’s being driven by the digital revolution and changing work patterns. Companies are exploiting technology to put customers in touch with people who provide a service, such as driving you from A to B, or picking up a meal from your favourite eatery and dropping it off at your desk.

These companies might be exploiting technology, but that’s not all that’s being exploited! There’s lots in the press of late about the people providing these services being exploited by these companies as well.

As with all new things, there’s always differing views. Technology enables companies to deliver services cheaply and more flexibly, which benefits us, and workers get paid for the work they do. It’s a clever way of matching customer demand to the supply of workers, and there’s lots of people who are happy to provide these services on a more flexible basis as it lets them call the shots as to when and how they work, and not an employer. There’s a fast growing expectation that work needs to be more flexible, more agile, people are looking for maximum flexibility to ensure there’s a better work / life balance.

Yeah, I get that but these people only get paid for the work they do, they don’t get any holiday pay, they’re not subject to the minimum wage and the companies running these platforms benefit as they don’t have a bunch of employees to deal with, don’t have to pay employer NI or other such costs.

I see where you’re coming from, but for some people who are after maximum freedom, this works well as it lets them do stuff as and when they want to without being tied to a long-term commitment. But, I absolutely agree that these sorts of arrangements aren’t for everyone…

Clearly they’re not for everyone, which is the reason why the likes of Uber, Deliveroo and Pimlico Plumbers have found themselves in the courts recently – locking horns with the people who provide services – to determine whether they’re self-employed, workers or employees!

Remind me why these labels are important…

I’d need to call on our legal friends to give you the proper legal definition of the differences, but in simple terms, at one end of the scale, the self-employed have no work place protection at all, which is the price you pay for maximum flexibility, whereas an employee has the most protection, and a worker is somewhere in between, but closer to the employee… in the Uber case that’s been in the courts, an employment tribunal found that Uber drivers were actually workers and not self-employed, but Uber’s just been given a right to appeal this decision.

Hmm, the cynic in me wonders whether HMRC is funding some of these cases…

Why?!

Well, if people delivering services are classified as self-employed, as opposed to workers or employees for tax purposes, this will lead to significantly lower tax revenue for HMRC!

Of course, you may be right. I guess though, the whole gig economy is just another example of the changing nature of how we work and consume services – a classic example of how an old model of doing business is being disrupted by technology and people’s changing priorities. This therefore means that there will be a lot of “wait and see”.

I’m sure there will be lots of twists and turns…

I agree. There’s the court cases and the government is also undertaking a review of the changes to the labour market as well, so lots going on. It’s particularly relevant if you run a business in those sectors such as accommodation, food, health, social work and transport, where the challenges of matching customer demand to the supply of workers could be greatly overcome by discarding the traditional models and looking at new innovative models that work on all sides of the equation.

Yeah, and did you see that Uber is now offering its self-employed individuals access to a benefits package for a fee that includes access to sick and injury benefits, as well as compensation for injuries on the job.

I did, and I thought the timing of the announcement was interesting given there’s a reasonable amount of press about their right to appeal the court’s decision on the status of those providing services. Deliveroo has also recently stated that claims for sick and holiday pay from its riders is jeopardising the whole approach to flexible working in the gig economy.

As we said, more twists and turns than a crazy roller coaster…

Disclaimer

We are but two fictitious characters throwing out ideas and comment to stimulate debate and collect information. As professional service firms, we are open-minded people and think independent thought and debate are essential to help us understand as well as navigate complex problems. By joves – doing business across Europe (and the world) is set to become a whole lot more complex in light of recent seismic political events. As businesses – we provide information and hopefully some wisdom – and we see this blog and its caricatures merely as a much more fun, perhaps slightly controversial, way of stimulating debate and collecting ideas. We’re searching for some true pearls of wisdom, and as we find them, we’ll share them with you.