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New report reveals gig economy thrives off hardship and instability

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A recent Victorian Government report on the gig economy reveals a sector governed by laws that act against workers’ interests, writes Sam Brennan.

THE GIG ECONOMY exploded onto the scene after traditional and secure work plummeted around the world after the Global Financial Crisis. The sector is dominated by tech giants who make their profits by connecting workers with customers, like Uber, Menulog, Airtasker and more.

The Victorian Government recently published a landmark report by an inquiry into the on-demand workforce (the gig economy), which explores the complex laws surrounding the issue and damning lack of worker security.

You’re not an employee

If you are a driver for Uber, if Uber decides your pay, if you get your wage from Uber and if you can be fired by Uber, are you an employee of Uber?

The answer is no, you are not an employee at all.

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Instead, you are – in the flowery language of corporate jargon – an “entrepreneur”, “partner”, “tasker” or “freelancer”. If you look closely, you will find a slate of less flattering, more legal jargon describing you as a “non-employee”, “independent contractor” or even a “small business owner”. These terms all emerge from a gap in current labour law.

Australia’s labour law stems from the “wage-work bargain”, in which an employee will get paid for a willingness to work for a set period of time even if there is no work to be done. The theory came from master-servant relationships of the 18th Century, where the servant would mull around waiting on their master until they were needed. 

Gig economy companies argue that this wage-work bargain is not applicable to them, because their “partners” get to decide their own times and wages are based on a single task, not hours spent ready to do tasks.

This highly theoretical legal distinction has very real material impacts. As an employee, you are guaranteed a minimum wage, the right to collective action, superannuation and more. But a non-employee (a gig economy worker) gets none of this.

For example, a 2018 survey found that the average driver for Uber earns $16 an hour despite the national minimum wage being $19.84.

Furthermore, in 2018 when an Uber driver filed an unfair dismissal application to the Fair Work Commission, his case failed because he was found not to be an employee and therefore could not be unfairly dismissed.

This legal loophole means Uber only has a handful of employees in comparison to their 60,000 “rideshare driver-partners”, the latter of whom are paid by half a dozen subsidiary companies that allow Uber to pay only $5 million in taxes from its revenue of $474 million, or one per cent. 

The argument that traditional workers get paid by the hour, while independent non-employee gig workers get paid by the task is also a false binary, as there are labour laws that cover employees who work to a task. One example is piece rates in agriculture, where the worker is paid based on how much they harvest. Importantly, piece rates guarantee minimum wage and superannuation.

Uber claims that their drivers like the current deal because it provides them with the flexibility to choose the times they work. This is not entirely true, as Uber will change prices to push drivers to work certain times. The term “flexibility” becomes even more disingenuous when it’s placed in opposition to security. 

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Uber’s reclassification risk

Uber, in its submission to the inquiry, said flexibility was the most important aspect for their drivers and that introducing worker protections would threaten this.

The company said:

‘…existing employment law means platforms like Uber are constrained in providing additional support to those who use the app to find work. This is because offering benefits and training to our partners could compromise the self-employed status of the individual.’

This is known as “reclassification risk”, where businesses are unwilling to provide benefits and security to their workers because it might reclassify them as an employee, risking their much-loved flexibility.

However, during the COVID-19 pandemic, we have seen millions of employees working from home at times that suit them, yet still keeping basic protections and benefits, indicating this trade-off is not innate.

Furthermore, it leads to companies like Uber making the bizarre argument that they can’t provide benefits to their workers, because in doing so they would be tacitly acknowledging them as employees and therefore mandated to provide benefits. 

People take what they can get

Industry groups say we shouldn’t really care about all this because it is such a small part of the workforce. The Australian Chamber of Commerce and Industry said the gig economy is ‘non-statistically significant’ and advises against ‘unwarranted, misplaced or premature’ regulation. 

The gig economy is hard to pin down, operating across various professions. However, a survey conducted by the inquiry found that around 14 per cent of the population had engaged in the gig economy at some point, a not-insignificant amount.

Looking into why people work in the gig economy only further reveals the importance of good pay and security.

Praise and regret for the casual worker

Despite Uber claiming flexibility was the reason drivers used the app, the survey found that the main reason people engaged with the gig economy was to earn extra money.

The report noted:

‘This is consistent with a range of data that indicates platform [gig economy] income offers secondary rather than primary income for the majority of platform workers.’

This should not be surprising as wages stagnate and people struggle to find stable work with a constant rise in underemployment exacerbated by COVID-19.

Workers need more money because they are not getting paid enough or working enough hours. As opposed to employers raising wages or the Government furthering stimuli, the gig economy paves over the failures of the economic system by compounding them, offering even lower-paid jobs to cover the shortfall in low-paying jobs.

Who’s the boss?

Uber said:

‘…the flexibility Uber offers is proving an attractive option for many… entrepreneurs. …partners tell us they value the freedom of being their own boss and choosing if, when and where they drive or deliver.’

Traditionally, a boss has control over the object that employees use to produce goods and then takes a cut of the earnings. The boss owns the sewing machine at a textile factory, the coffee machine at a cafe and the software that connects drivers and passengers.

However, in a strictly legal sense, Uber is correct — our current system does not include gig economy workers as employees. This has allowed gig economy companies to push all their workers into a legal grey area where they don’t have to provide basic worker protections.

Gig economy workers still engage in this exploitative relationship because the poor economic circumstances leave them little choice. It is not a coincidence that many gig economy workers come from vulnerable socioeconomic groups, particularly migrants and young people.

The report made some important recommendations to correct this situation, including new labour laws. However, with the Government preaching the benefits of flexibility and people desperately looking for whatever job they can find, action needs to be taken sooner rather than later.

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Sam Brennan is a freelance journalist. You can follow him on Twitter @samkbren.

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Food delivery deaths show why gig economy workers need more rights

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Australia’s gig economy road toll is growing, with five food delivery riders killed in the past two months – and those tragic deaths have ignited debate over the rights of workers.

While the companies behind the apps rake in pandemic profits, workers’ advocates warn we will see more delivery riders die and be injured on our roads, with limited rights to compensation if nothing changes.

Hungry Panda delivery rider Xiaojun Chen died after being hit by a bus while delivering food in Sydney on September 29.

Last week, representatives of the firm failed to front a NSW parliamentary inquiry looking into the death, with no explanation given.

Mr Chen’s widow, Lihong Wei, was told by Hungry Panda that they considered her husband to be an independent contractor, not an employee, so she would not be entitled to compensation.

Slater and Gordon lawyer Jasmina Mackovic is now representing Mrs Wei and pursuing a death-benefit claim under the NSW workers’ compensation scheme.

“They’ve lost the breadwinner and they don’t want this sort of thing to happen to any other family, especially given the state of that industry, and the fact that there’s all these loopholes, and there’s really no proper compensation,” Ms Mackovic said.

Mr Chen was the sole income earner for his family back in China, and his death has left Mrs Wei to support herself and their two children with no guarantee of financial compensation from either Hungry Panda or the state government.

Like many gig economy workers, Mr Chen was a migrant on a temporary visa.

These workers are not entitled to the federal government’s pandemic safety nets JobKeeper and JobSeeker, and they have little option but to take on low-paid, insecure and risky gig economy jobs to survive.

Gig economy companies have a history of pouring large sums into lobbying against workers’ rights.

In California, Uber and Lyft recently spent more than a-quarter-of-a-billion dollars to successfully fight law reform that would have seen gig economy contractors classified as employees.

In September, a Transport Workers’ Union survey of delivery riders in Australia showed that average earnings after costs were just over $10 an hour.

More than one in three riders said they had been injured on the job, with the vast majority (80 per cent) receiving no support from their companies.

The NSW government this week set up a taskforce to investigate the four delivery rider deaths on the state’s roads in the past two months.

Delivery riders in Australia earn an average of $10 an hour, the TWU says. Photo: Getty

But gig workers’ rights are a national issue and need to be addressed by both federal government and state governments, Ms Mackovic said.

“Both state and federal governments have a role to play to ensure that these companies don’t avoid their responsibilities, and to ensure they adequately protect the people that work for them,” she said.

Transport Workers’ Union national secretary Michael Kaine also called for the federal government to step in and “acknowledge its role”.

“It’s not good enough that states are in a piecemeal way trying to address the problem,” Mr Kaine said.

“We need the Federal Government to act and regulate.”

Hungry Panda did not respond to questions put to it by The New Daily.



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Pearl Thusi Bags A Huge Gig After Getting Booted Out Of Netflix

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Pearl Thusi Bags A Huge Gig After Getting Booted Out Of Netflix, She Has Partnered With Yvette Davis’ Sitota Collection

Pearl Thusi Bags A Huge Gig After Getting Booted Out Of Netflix. She Partnered With Yvette Davis' Satota Collection
Pearl Thusi Bags A Huge Gig After Getting Booted Out Of Netflix. She Partnered With Yvette Davis’ Sitota Collection

It seemed like a dead-end for Queen Sono lead actress, Pearl Thusi when the show unexpectedly got booted out of Netflix’s streaming service amid production for season two – but sis fell, stood and brushed herself fast enough.

She bagged herself yet another gig and continues to secure the bag.

She has partnered with American legendary music industry’s biggest icon, Yvette Davis Gayle to produce a new luxurious home fragrance, called the BlackRose under Sitota Collection.

Sitota Collection is one of the big home fragrance companies in America and abroad.

They boast in producing hand-poured soy candles and artisan soaps made with natural oils and kinds of butter.

The new fragrance is said to combine Bulgarian rose with blackcurrant and sweet berries.

Speaking on her recent big win after the Netflix flop, Pearl Thusi said the opportunity came at a right time for her and has always been a dream of hers to get into such business.

“The partnership with the Sitota Collection came naturally and it felt right. I am a businesswoman and venturing into luxury home products has been a dream of mine, who better to partner with than the best in the business?

I can’t wait for the local community to experience what we have put together. I feel this is my full-circle moment.

The collaboration is incredible because the soap and candle used my favourite scents and ingredients,” she said.

Yvette Davis Gayle is one of America’s legendary music icons.

She is well known in the musical circle for overseeing the day-to-day media and public relations efforts for such standout recording artists as 50 Cent, Mary J. Blige, The Game, Diddy Dirty Money, Keyshia Cole, and Keri Hilson as well as various artists that graced the rosters of Aftermath and G-Unit Records back in the day.

She ventured into the fragrance collection business back in 2011 and her company, Sitota Collection has won her a fortune.

Pearl Thusi Bags A Huge Gig After Getting Booted Out Of Netflix


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Gig economy: Panacea or a silent killer?

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Image Credit: Agency

You probably never heard of Jang Deok-jin. And now you never will, because he’s dead.

27-year-old Jang, a former Taekwondo enthusiast in South Korea, was of the millions bit by the bug of the ‘gig’ economy — the new-age system typified by the prevalence of short-term contracts or freelance work as opposed to permanent jobs. The biggest employment this has created is in the online marketplace — where millions of bike or vehicle drivers deliver packages of goods bought over the internet.

No doubt Jang thought that this would help him earn big bucks. He did, for a while. In the process, he lost 15kg after doing 18 months of night shifts, according to a BBC report. One night, he came home from a night shift last month at around six in the morning and headed for a shower. His father found him dead an hour later.

Master-slave. Landlord-serf. Bourgeoisie-proletariat. And now — Aggregator-partner.

By whatever name you choose to call it, throughout human history, the relationship between the oppressors and oppressed has always remained the same. The terminology may have changed over time, the levels of oppression may have varied, but the essence of the relationship still continues as they have been through the millennia — a miniscule group of people calling the shots, and the starving millions toiling for their lives to eke out a meagre existence.

We all thought it was a momentous event when the ‘Iron Curtain’ of communism came crashing down three decades ago. The 1990s were heralded as the beginning of a new epoch of liberty, human rights and prosperity, as the stifling conditions of the communist bloc gave way to liberal democratic regimes, championing the free market and industrial progress.

But are we really free?

With the advent of globalisation, free movement of goods followed as a natural course. The companies’ profits also ballooned as a consequence. As a result of globalisation, the factories moved from the industrialised states to countries where labour was cheap and plentiful, and more importantly, less likely to complain about low wages. So, while the workers in the West lost their jobs, the workers in the East gained employment under poor conditions. The classic example of this situation gained worldwide attention in 2013, when Rana Plaza, a building housing garment factories in Dhaka, Bangladesh, came crashing down, killing over 1,100 people, who were all sewing clothes for multinational brands.

Let us take a peek into the moulded pages of history to gauge how the present situation has come about.

In the 18th century, as the global economy was moving from an agricultural dominance towards industrialisation, it also became necessary to get the labour for the factories. The so-called ‘emancipation of serfs’ was nothing but a ruse to take the farm workers away to the assembly lines. The worker’s wellbeing was the last thing on the mind of those championing their liberties. It is no coincidence that the French Revolution — 1789 — occurred just 25 years after the first cotton mill opened in England.

As the factory owners pounded the labourers with more and more work, the issue of labour rights began to come to the fore — championed foremost of course by German philosopher Karl Marx. This explosion of the communist movement saw rising demand to improve workers’ rights, and increasing popularity of left-leaning movements.

As these movements caught on, it was in 1936 that France became the first European country to grant paid vacations for working class employees beyond national and religious holidays, with the post-war consensus steadily expanding those privileges. Other Western countries followed suit, establishing the social security network that forms the bedrock of social organisation at present in those nations.

However, by the end of the past century, two global events shook the very foundations of society as we knew it. One, the communist block crumbled, effectively removing the opposition to unfettered capitalism. Second, the advent of the internet ushered in a new world of connectedness like never before.

New ideas exploded. And as a natural consequence, new industries too. With the Fourth Industrial Revolution under way, a plethora of new work opportunities resulted. It was thought to be the ultimate panacea — knowledge-based industries.

And so it did — for a while and in some places. But then, the dark clouds gathered.

As it is with globalisation, manufacturing had largely moved from the assembly lines of the Western nations to cheaper locations in the Eastern hemisphere. The same happened here as well — with distances no barrier, companies moved a major part of their operations to similar places. A new term — ‘Bangalored’, referring to the city in India — made its way into the English lexicon, which refers to a person losing his/her job because that position was outsourced somewhere else. The ‘Business Process Outsourcing’ companies flourished in the less developed countries as a result, India being a major gainer.

But did it really mean the people working in these countries go better off, at least economically? For a while, yes. You suddenly saw 20-somethings with no skill to speak of but a rudimentary knowledge of computers and a smattering of accented English break out in the socioeconomic space, buying apartments, fancy cars and bikes. However, as this group reached the next decade of their lives, it was increasingly seen that they remained stuck to those positions. There was hardly any movement up the corporate ladder, and with unearthly working hours thrown in, the situation quickly became desperate.

And then came the ‘gig’ economy. The internet-based businesses were hailed as the solution to the masses being laid off due to the blue-collar jobs vanishing. But as the millions of bikes rode out to deliver parcels, the stark aspects of this new phenomenon —zero holiday pay, and employment only when there’s work available — became increasingly visible.

These are now becoming the default employment terms in what’s now considered the developed world. Governments have struggled to create a safety net of the same strength for this workforce as that being provided to people in traditional employment models, which is becoming increasingly scarce. This insecurity “has likely led gig economy workers to continue working, even when they perhaps should not, as the alternative risks substantial shortfalls in income,” Lazard Asset Management wrote in a recent note.

Thus the entire globe is increasingly moving towards an informal employment model, where there is unlikely to be any form of permanent labour benefits. This is bound to have ripple effects — not just for workers’ health. For example, if a worker does not find stable employment, will he/she think about setting up a family? How is he/she to support such a family without the knowledge of what he might be earning in the near future? Without a social security net, how will the children be educated? Without company-provided insurance, how will the health care of the workers and their families be taken care of?

No concrete answers have yet come up on these questions. Movements have begun in parts of the world for greater rights for these ‘partners’ in the gig economy, but hardly anything has been achieved yet. And the COVID-19 pandemic, of course, has worsened conditions for these workers while beefing up the ‘aggregator’s’ bottomline.

So the next time you sit in the cocoons of your home, sitting in front of your laptop and order that next round of food or anything else from the ‘aggregator’s’ website, spare a thought for the ‘partners’ like Jang Deok-jin, who gave his life in the process.

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