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South Africa’s COVID-19 crisis brings gig economy workers into sharper focus

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This week many South Africans are choosing to work remotely and practice social distancing in the wake of the recent coronavirus (COVID-19) outbreak and its declaration as a national disaster by president Cyril Ramaphosa.

This has resulted in many people panic buying at retailers for essentials, but will also likely lead to an increase of gig economy services such as Uber, SweepSouth and OrderIn, as South Africans try not to risk travelling outside of their homes in the coming weeks.

But what about those people dependent on the gig economy as their primary source of income, how will they cope as a result of COVID-19?

Fair is fair?

This is what the Fairwork Project recently looked into, publishing a report that assessed 11 of the country’s largest digital labour platforms against five principles of fairness – fair pay, fair conditions, fair contracts, fair management, and fair representation – giving each a fairness rating out of 10.

The Fairwork Project conducted said research thanks to a collaboration with University of Oxford, University of Manchester, University of the Western Cape (UWC) and University of Cape Town (UCT).

“Work in the gig economy is often unsafe and insecure. Workers lack protections afforded to regular employees and are vulnerable to unfair practices like arbitrary termination, often based on inequitable regimes of customer ratings,” explains Professor Jean-Paul van Belle from the Department of Information Systems at UCT.

“Because of these inequities, the Fairwork team has taken action to highlight unfair labour practices in the gig economy, and to assist workers, consumers and regulators as they hold platforms to account,” he added.

The researchers note that gig workers such as rideshare and delivery drivers are likely to play an essential role in the response over the coming weeks and months.

That means that those workers are more vulnerable to exposure to COVID-19. Furthermore, the lack of sick pay for many workers means that if they need to self-isolate, they face severe financial insecurity, according to the Fairwork Project.  

This may lead many to continue to work despite being exposed to COVID-19 or showing symptoms which could also, unfortunately, spread the virus. Without UIF or sick pay, gig workers have no safety net, the researchers stress.

What’s being done?

This emphasises the need for platforms and government to ensure that gig workers and those who are currently financially unable to stay at home are protected, they add.

As far as what local platforms are doing, the Fairwork Project says Uber South Africa has indicated that it will follow the international company policy of compensating workers required to self-isolate for 14 days.

That said, precise details of exactly who will be covered, and to what extent, is not known at this stage.

We too reached out to Uber Eats last week to find out if there has been an increase in the use of the service as a result of COVID-19, as well as how delivery drivers are being assisted.

At the time the firm had no statistics as to usage, but they did offer up this statement.

“We are always working to help keep everyone who uses Uber safe. We have a dedicated global team, guided by the advice of a consulting public health expert, working to respond in every market where we operate around the world. We remain in close contact with local public health authorities and will continue to follow their guidance to help prevent the spread of the coronavirus,” a spokesperson told us.

How that position has changed since the national disaster status was announced, remains to be seen.

Looking at the numbers

In terms of how gig economy platforms ranked in the Fairwork Project’s latest report, GetTOD, No Sweat and SweepSouth, all tied for first place among the 11 companies that were looked at.

Of potential concern was Uber and Uber Eats, each receiving a ranking of 4 and 3 respectively. Whether that ranking would change once greater clarity is created with regard to assistance for workers, remains to be seen.

One of the other interesting findings from the Fairwork Project report is the notion of quantity versus quality, when it comes to addressing the job crisis in SA and the role the gig economy plays in this.

“Growing numbers of South Africans find work in the gig economy, and digital platforms are frequently heralded as a solution to mass unemployment. However, the employment challenge facing South Africa is not simply the quantity of jobs but also the quality of jobs being created,” the research team points out.

“Decent work and job creation are not mutually exclusive. This is why, by bringing workers and other stakeholders to the table, Fairwork is developing an enforceable code of basic worker rights that are compatible with sustainable business models,” adds Dr Kelle Howson, Oxford Internet Institute researcher.

The next steps

Following the release of its findings, now Fairwork is looking to engage with local gig economy platforms to ensure that their workers, employees and users are all working towards a better model for all involved.

“This is the second annual round of Fairwork Project ratings for South African platforms, and the impact is beginning to build. Fairwork engages directly with platform managers to suggest avenues for improvement, and one of their accomplishments includes securing guarantees from two platforms – NoSweat and GetTOD – that all jobs they post will pay above the living wage, calculated at R6,800 per month,” researchers highlighted.

“Furthermore, after working with the Fairwork Project, GetTOD has publicly announced its willingness to engage and negotiate with a union or workers’ association, including this in its terms and conditions,” they added.

Fairwork also seeks to disseminate enough information to consumers, so they can be intentional about the platforms they choose to interact with, thus contributing to pressure on platforms to improve their working conditions and their scores.

To find out more about the Fairwork Project and its latest report, head here.

[Image – Photo by Jacques Nel on Unsplash]

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Workers

Buckle Reinvents Insurance Model for Gig Economy with $31 Million Series A Funding

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JERSEY CITY, N.J.–()–Buckle, a tech-enabled financial services company, has filed its Regulation D and disclosed it raised $31 million through its Series A funding round co-led by HSCM Bermuda and Eos Venture Partners. Addressing gaps in conventional insurance policies that leave gig workers underinsured, Buckle is using the funding to reinvent the insurance model with new sources of data to underwrite risk, making insurance comprehensive, affordable, and easy to obtain for rideshare drivers.

“Whether rideshare drivers are on duty or driving their family around on personal time, Buckle will have them covered,” said Dustin Walsey, co-founder of Buckle. “We are excited to offer comprehensive, easy-to-understand insurance to active rideshare drivers for overall better personal protection.”

In 2019, Buckle launched its core rideshare insurance policy that combines personal and commercial coverages, in collaboration with Munich Re’s Digital Partners. Earlier this year, it expanded the program through a partnership with Lyft.

In June, Buckle announced the acquisition and recapitalization of Gateway Insurance Company (Gateway), including its 47 state insurance licenses. Now, through Gateway, Buckle is expanding insurance coverage to include transportation network companies (TNCs), traditional taxi, limo, and livery businesses using the Curb app.

“The ride-hailing market is expected to grow globally to approximately $260 billion by 2024,” said Vikas Singhal, Partner and CIO of Insurtech at HSCM Bermuda. “As the market grows, demand for straight-forward and affordable insurance coverage for both providers and TNCs will grow with it. We’re excited to help the Buckle team take the company to the next level.”

“The rideshare and dispatched delivery markets need specialized insurance expertise,” said Jonathan Kalman, Founding General Partner at Eos Venture Partners. “Buckle has built a comprehensive insurance solution to this growing market.”

Buckle plans to launch other products and partnerships as it expands nationwide.

About HSCM Bermuda

HSCM Bermuda is an asset manager focused on investments in the Re/Insurance and Transportation sectors. HSCM was launched in 2016 and focuses on core economic sectors that are likely to outgrow global GDP, offer low correlations with broader markets, and are experiencing a shift from balance sheet and to market financing. For more information about HSCM Bermuda, please visit www.hscm.com.

About Eos Venture Partners

Eos Venture Partners is a global independent Strategic Venture Capital Fund focused exclusively on InsurTech, investing in early and growth stage technology businesses that accelerate innovation and transformation across the insurance industry and value chain. Eos was founded in 2016 to bridge the “digital chasm” between InsurTech start-ups and traditional (re)insurance companies. Investors in the Eos fund, EVP I, are from the insurance sector, forming a close strategic relationship with the Eos team to capture both strategic and financial value from the innovation and technology change in the insurance industry. See more at: www.eosventurepartners.com.

About Buckle

Buckle offers total insurance coverage specifically for rideshare and other gig economy providers and TNCs, looking to get coverage that’s fair and simple. Buckle Rideshare Insurance isn’t a gap product that supplements an existing policy, but replaces a driver’s current auto insurance, providing continuous 24×7 coverage on-and-off the clock with one low rate. Connect with Buckle on Facebook and LinkedIn and visit www.buckleup.com.

All trademarks recognized.

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CERB 2.0? Trudeau Hints at New Benefit for Gig Workers

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The CERB may be winding down, but that doesn’t mean out-of-work Canadians can’t still get benefits.

That’s the takeaway from a recent statement by PM Justin Trudeau, who announced that his government had been working on a “21st century EI system.” In covering Trudeau’s statement, the Canadian Press reported that the revamped EI system would replace the CERB, bringing more Canadians under coverage — including one group of Canadians who had been sorely neglected until the CERB came into effect.

An “EI-like benefit” for gig workers

One of the main beneficiaries of Trudeau’s “transitional EI-like benefit” would be gig workers. Under current rules, gig workers are considered self-employed. That means that they’re opted out of EI by default. Gig workers can indicate that they want to pay in to EI, but usually don’t. The self-employed pay twice the usual rate on CPP; passing on EI premiums is a way to partially offset that extra tax. As a result, many self-employed Canadians aren’t covered by EI.

Trudeau’s new EI benefit could remedy that. While details on the plan are scarce so far, it appears that there will be an interim benefit to cover non-EI eligible Canadians, followed by a totally revamped EI system. It’s hard to predict exactly what the latter will consist of, but the former will probably be regular EI with looser eligibility requirements.

Why this is good news

While many out-of-work Canadians may bemoan the loss of the $2,000 a month benefit, it may ultimately be a good thing. The CERB has always been beset by concerns about eligibility and fraud. Many Canadians have reported being “scared” to spend their CERB money, and ominous CRA statements probably haven’t helped with that.

Getting back to EI could therefore be a welcome development. While the average monthly amount isn’t as high as the CERB, EI has fewer eligibility questions hanging over it. As a result, individuals receiving EI may feel more free to spend it.

For example, if you received $1,000 a month in EI, you could spend that money on investments. If you took $1,000 worth of EI and spent it on shares in Fortis, you’d be within your rights to do so. After all, it’s a program you paid in to, and if you’ve been laid off, you’re eligible to benefit from it. It doesn’t matter how you spend the money.

With the CERB, it’s not quite so simple. There’s been a big question mark about eligibility ever since the program began, and spending CERB money on non-essential items has been frowned upon. If you took $1,000 worth of CERB money and bought FTS shares with it, that wouldn’t make you ineligible. However, it could be inconvenient if the shares declined in value, and you were later forced to repay the CERB. With EI, you always know that you’re entitled to the money you’re getting, as applications are pre-screened for eligibility. As a result, you can sleep soundly no matter how you spend the money — be it on groceries, Fortis shares, or anything in between.

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Observers call on National Wages Council for more aggressive wage support, office to look after gig workers, Manpower News & Top Stories

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In September and October 1998, as the full impact of the Asian financial crisis on Singapore’s economy became more apparent, the National Wages Council (NWC) was convened a second time that year to revise its annual wage guidelines.

Its original guidelines, issued in May, had called for wage restraint and non-wage cost-cutting measures, as the Trade and Industry Ministry forecast economic growth for the year of between 2.5 per cent and 4.5 per cent.

But as the crisis deteriorated, the growth forecast for the year was revised downwards in June to between 0.5 per cent and 1.5 per cent.

The NWC in November proposed that in addition to a 10 percentage point cut to employers’ Central Provident Fund (CPF) contributions recommended by the Committee on Singapore’s Competitiveness, total wages for 1998 be cut by 5 per cent to 8 per cent, as compared with 1997.

This year, with Singapore headed for its worst recession since independence due to the Covid-19 pandemic, observers suggested that the council consider calling for more aggressive wage support, an office to look after gig workers and pay hikes for low-wage staff.

Manpower Minister Josephine Teo said in a Facebook post yesterday that the NWC will reconvene this year. The council made its annual wage guidelines in March this year.

Institute for Human Resource Professionals (IHRP) chief executive Mayank Parekh said that without the prospect of a near-term recovery of demand, there could be more job losses and wage cuts on the horizon.

“It is timely for the NWC to review its earlier recommendations and seek support for additional measures to safeguard jobs and enhance employability,” he said.

“More aggressive wage measures, higher support for job redesign and re-training and additional guidelines on retrenchment payments could be considered.”

Singapore Human Resources Institute president Low Peck Kem suggested the council look at whether the Jobs Support Scheme of wage subsidies can be extended, as well as the need for funding to facilitate job redesign for future-ready jobs.

It could also propose the setting up of a tripartite office to help and protect gig workers, who tend to fall under the radar because they do not have employers, she said.

National Trades Union Congress (NTUC) assistant secretary-general Zainal Sapari said the NWC should continue to push for wage increases for low-wage workers, even amid the pandemic.

“Instead of recommending a quantum wage increase, I would like NWC to set a long-term target of where wages of these vulnerable low-wage workers who are performing essential services should be at. This could then act as a guideline for the wage increases and the necessary productivity initiatives that must be embarked upon to make it sustainable,” he added.

This is only the fourth time since being set up in 1972 that the council has been convened twice in the same year.

Aside from 1998, it also released revised recommendations in 2001, after the Sept 11 attacks on the United States, and in 2009 amid the global financial crisis.

In January 2009, the council updated its guidelines to recommend – among other things – that companies work with unions and workers to manage costs, such as through wage freezes or wage cuts, to save jobs.

The NWC had in March this year considered whether to recommend reducing CPF contribution rates to cut wage costs.

But Permanent Secretary for Manpower Aubeck Kam had said then that as the Jobs Support Scheme wage subsidy far exceeds the employer CPF contribution rates of up to 17 per cent, the Government did not feel that a cut to the rate was warranted.

DBS Bank senior economist Irvin Seah said that short of extending the JSS payouts for worst-hit industries, a temporary cut in employer CPF contribution rates could be an option the NWC considers.

But he cautioned that such a move would need to be weighed very carefully. “It would be a reduction in workers’ savings, on top of already widespread wage cuts.”

Amid reports of major retrenchment exercises in recent weeks, Mrs Teo also commented yesterday on the Fair Retrenchment Framework proposed by the NTUC last month. It includes protecting the Singaporean core of the workforce, while foreigners with special or critical skills could be retained as well.

She said in her Facebook post that the Singapore National Employers Federation will consider the framework and discuss a mutually acceptable way forward with NTUC.

In the meantime, the Manpower Ministry will continue its work on the Fair Consideration Framework, she said, adding that there would be updates soon.

“Tripartite partners are aligned on one thing – the need to support our workers and businesses through the storm brought about by Covid-19. Much work ahead,” she said.



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