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Report highlights perils of the digital gig economy



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London (AFP)

From hidden costs and poor wages to the pressures of being constantly available and lack of career development, many workers feel there is no way out of the digital “gig economy”, according to a new report published on Wednesday.

Technology think-tank Doteveryone said such jobs via mobile applications offered “flexibility and freedom” for people with existing skills and financial means.

“But for those who don’t, the app has become a trap. They have no option but to work gigs, and no way out once they’ve begun,” it said in the report, “Better work in the gig economy”.

The think-tank said one in 10 Britons takes a job via a digital platform at least once a week, to provide ever-more demanding consumers with services from taxi rides, hairdressing and takeaway meals to home repairs or babysitting.

It said the “gig economy”, in which nearly five million people work in the UK, works for some self-employed people, giving them a degree of freedom and a comfortable income.

Sometimes nicknamed “zero-hour jobs” because they do not guarantee any minimum working hours, these jobs also contribute significantly to the UK’s record-low unemployment rate.

Many employees said they were satisfied with their income, either full-time or as a supplement to another activity.

But many employees said gig work was “like quicksand — low pay becomes unlivable pay after costs are accounted for — and the promise of flexibility is an illusion when, in reality, workers must be available 24/7 and scrabble for every gig available”.

They live under the stress of constant customer evaluations that can call into question their ability to receive future orders, and complain of being treated like robots by their employers.

– Workers’ rights –

British director Ken Loach’s latest film “Sorry We Missed You” depicts the difficulties of an employee of a delivery company who works at such a fast pace that his health and family life suffer.

He then finds himself in a financial impasse after accumulating debts to buy his van and deal with damage to his equipment.

Doteveryone’s report recommends the introduction of a minimum wage for workers in the “gig economy” “that accounts for the costs of doing gig work”.

The think-tank also proposed that companies should set up human contact points to answer questions from their employees, instead of automated systems.

The centre’s chief executive, dotcom entrepreneur Martha Lane Fox, said: “The gig economy can be fantastically empowering if you can work on the terms you wish for.

“But it can also be destabilising, dehumanising and dispiriting if you don’t.”

Convenience “must not be traded for the rights of people to work with financial security and dignity and to fulfil their dream for the future”, she added.

Food delivery company Deliveroo and taxi-hailing service Uber did not respond to AFP requests for comment.

In 2018, a London labour tribunal ruled on appeal that Uber should consider its UK drivers as employees, giving them the right to minimum hourly wages and paid holidays.

Uber wants to take the case to the Supreme Court.

California, on the US west coast, ratified a law in September forcing the car booking giants to reclassify its drivers as employees.

Several cases of workers affiliated to a platform demanding their recognition as employees have emerged in other countries, notably in France.

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As Congress scrutinizes gig worker rules, small-business owners need to know the basics – The Philadelphia Inquirer




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Uber’s UK ruling could have implications for gig economy startups




Former Uber drivers Yaseen Aslam and James Farrar first brought their case against Uber in 2016
(Carl Court/Getty Images)

The UK’s Supreme Court has rejected Uber‘s appeal against an earlier ruling that said its drivers must be classified as workers, a result that may have a significant impact on other gig economy companies.

The decision—which cannot be appealed—means thousands of UK Uber drivers cannot qualify as being self-employed, entitling them to both minimum wage and holiday pay. The ridehailing company could now face paying substantial compensation to its drivers.

The ruling, which criticized Uber for sidestepping UK labor laws to withhold benefits, could influence other battles between gig workers and the companies that hire them. Earlier this month, the Independent Workers’ Union of Great Britain appealed against a court decision preventing riders for food delivery startup Deliveroo from engaging in collective bargaining due to their self-employed status. Deliveroo, which is backed by investors including Durable Capital Partners and Amazon, is looking to go public this year.

“Employees should benefit from improved rights; however, employers are likely to face increased costs of labor and disruption to their business models, which have proven to achieve rapid scale with gig workers,” said PitchBook analyst Nalin Patel. “The ruling may also now set a precedent in the UK and force other gig economy startups that utilize the self-employed contractor model to rethink how they operate in the region moving forward.”

Former Uber drivers James Farrar and Yaseen Aslam originally won their tribunal against Uber in 2016. Uber appealed the decision, but it was upheld in 2017, and again in 2018 by the High Court.

“This ruling will fundamentally re-order the gig economy and bring an end to rife exploitation of workers by means of algorithmic and contract trickery,” said Farrar, who is also a general secretary with the App Drivers and Couriers Union. “Uber drivers are cruelly sold a false dream of endless flexibility and entrepreneurial freedom.”

In a statement, Uber’s regional general manager for Northern and Eastern Europe, Jamie Heywood,  said the court decision was focused on a “small number of drivers” who used the app in 2016. Since then, he said the company had made changes to its business,  providing free insurance in case of sickness or injury. He added: “We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see.”

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The future is now for gig-based entrepreneurship – San Gabriel Valley Tribune




With Californian Kamala Harris as vice president, it’s clear the new Biden administration is taking its cues from the once-Golden State on labor policy.

In one of its first acts in office, the Biden Administration placed a regulatory freeze on a Department of Labor regulation enacted in the waning days of the prior administration relating to independent contractors.  The rule, according to labor and employment law firm Fisher Phillips, “aims to make it easier for businesses to classify workers as independent contractors.”

It’s unlikely this rule to give more workers freedom to be their own boss and set their own schedules will survive in a Biden administration that was heavily reliant upon labor unions for money and manpower to win the 2020 campaign.

Meanwhile, House Democrats recently re-introduced the controversial PRO Act in Congress, which “seeks to reduce the use of the independent contractor classification by companies such as Uber,” according to CNBC.

Both of these efforts followed the lead of California’s liberal legislative majority, which two years ago enacted the controversial Assembly Bill 5 to severely restrict the ability of Californians to work as independent contractors.  Their goal is to increase union membership and dues and force people to work in traditional, 9-to-5, union jobs that are relics of the past.

Doubling down on AB 5-type restrictions at the national level – which may be the Biden administration’s goal with the nomination of Julie Su, California’s chief AB 5 enforcer, as deputy Secretary of Labor – would be a tremendous mistake.  It would threaten innovation and hurt the ability of Americans who have lost their jobs to put food on the table during a global pandemic.

As documented in the new Pacific Research Institute study, “The Small Business Gig,” Americans are increasingly working in the gig economy.  They don’t want government – whether in Sacramento or Washington, DC – dictating how they can earn a living.

A 2018 Gallup survey found that 36 percent of U.S. workers have some sort of a gig worker arrangement.  Whether renting out an extra room to earn cash to pay the mortgage or using an app to earn a living on an alternate schedule, the gig economy is increasing opportunities for Americans to become entrepreneurs, while providing customers with lower cost services.

Many in California state government see the gig economy as exploitative and disruptive.  But data from the ADP Research Institute shows that 70 percent of gig workers are independent workers by choice.  Gig Economy Data Hub research found that more than two-thirds of gig economy workers are satisfied with their current work arrangement.

Government shouldn’t pick winners and losers in the economy.  New restrictions on the gig economy, like those proposed in Congress, will limit people’s freedom to become entrepreneurs while institutionalizing the old way of doing work.

Instead of adopting regulations at the federal level that 58 percent of Californians – Democrats, Republicans, and independents alike – rejected when they passed Proposition 22 in November, the Biden administration and Congress should take the opposite approach and enact market-based policies to encourage entrepreneurship and innovation.

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