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Just Eat Takeaway CEO plans to end reliance on gig workers: report

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  • Just Eat Takeaway is pivoting to an employee-based model and will no longer rely on gig workers to power its food delivery business in Europe, the BBC reported this week.
  • “We want to be certain they do have benefits, that we do pay taxes on those workers,” Takeaway CEO Jitse Groen told the BBC.
  • The company has become one of the world’s largest food delivery companies following its acquisition of Just Eat and its plans to merge with Grubhub.
  • Groen’s comments came as Uber, Lyft, and other US-based gig companies are engaged in a heated political and legal battle over the status of their workers.
  • Visit Business Insider’s homepage for more stories.

Just Eat Takeaway CEO Jitse Groen told the BBC this week that the food delivery company plans to end its reliance on gig workers and implement an employment-based model across Europe.

“We’re a large multinational company with quite a lot of money and we want to insure our people,” Groen said, according to the BBC. “We want to be certain they do have benefits, that we do pay taxes on those workers.”

The BBC reported that Groen had grown concerned about the uncertainties and lack of workplace protections gig workers face that traditional employees don’t, saying: “It’s our intent not to have those in Europe.”

Just Eat and Takeaway did not immediately respond to requests for comment on this story.

Takeaway.com acquired Just Eat in January for approximately $7.7 billion, and Groen now leads the combined company. In June, Grubhub said it plans to merge with the new company as part of a $7.3 billion deal after talks fell through with Uber. The merger would make Just Eat Takeaway the largest food delivery business outside of China.

Groen’s pledge comes as many US-based companies are facing increasing scrutiny over their reliance on gig workers, contractors, and other non-traditional arrangements that allow them to deny workers benefits like healthcare and sick pay, avoid paying into programs like unemployment insurance, and escape the reach of certain labor laws.

As the pandemic has both slashed rideshare income for drivers and dramatically increased the health risks for both rideshare and food delivery drivers, regulators, lawmakers, and the public are paying more attention to how the gig model can threaten workers’ economic and physical security.

Uber and Lyft are currently engaged in an escalating political and legal battle in California, where a court recently ruled that the companies’ drivers are employees under the state’s gig work law AB-5. Both companies are challenging the ruling and are hoping to persuade voters to pass a ballot measure this fall that would exempt them from the law.

Axel Springer, Insider Inc.’s parent company, is an investor in Uber.

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Companies relying on gig work long term hurt employees and customers

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Imagine that one of two people will be responsible for your safety. The first receives health and dental benefits, earns more than minimum wage, has clear advancement options within their company, and may even belong to a union. The second has no insurance benefits, works wildly erratic hours, feels no allegiance to their company, and makes less money. Which person would you pick?

The ride-share and micromobility industry is under the microscope for worker violations and safety concerns. Major shared e-scooter companies are facing lawsuits from injured riders. Revel, a moped company operating in New York City, recently reopened operations after a shutdown earlier this year, as complaints about reckless driving and fatalities involving its vehicles mounted. Ride-sharing companies Uber and Lyft face a number of lawsuits related to allegations by passengers of injury, assault, and harassment. A California ballot measure asking voters whether gig workers should count as employees has shown that many Americans are understandably focused on legal and legislative methods to introduce more order and security to the gig economy.

Like most startup industries, the companies providing these new mobility options are scrappy, doing things on the fly, and, at times, operating shortsightedly. This needs to change. As these forms of transportation edge their way to being a supplementary public transportation in a pandemic and beyond, we need to take this responsibility seriously.  After all, when the public gets on a bus, they don’t imagine the bus’s tires were changed not at a company-designated station but in someone’s garage.

Companies themselves would be wise to consider moving away from the gig economy and choosing to play a greater role in ensuring the well-being of their workers because doing so is fundamentally linked to the safety of their consumers and the success of their business.

Outdoor apparel giant Patagonia is famous for taking this approach: With generous time off, on-site child care, and the doors locked on weekends, the company has doubled in size since 2008 and is currently expanding into new markets. Employee turnover is minimal. CEOs and business school professors are increasingly aware that giving workers better wages and benefits also tends to be a recipe for greater profitability and employee retention in the long run.

Of course, any business has to keep an eye on the bottom line, but the damage done from rider injuries and safety lawsuits gives pause—financial pause, especially with potential liabilities tied up. But also pause because if you are hurting your customers, it’s not great for your brand. Investing in worker safety and well-being is more expensive in the short term, certainly. But in the long term, it leads to a more profitable company.

In 2019, my company, Spin, chose to make more than 90% of its workers employees with benefits, as opposed to contractors. In all markets our lowest starting wage is $15 per hour, with incremental increases based on tenure. We did this in part because research has shown that companies with healthy employees have better business performance. Companies with excellent safety, environment, and health programs outperform the S&P 500 by 3%-5%. But also because gig workers are less likely to have been thoroughly trained, more likely to leave for another job, and are often incentivized to cut corners in order to keep a high number of scooters on the streets and boost their own apparent productivity. This is unacceptable. Carefully training and fairly compensating the employees who work to keep our scooters safe for riders ensures that employees face no perverse incentives to rush through their work.

Safety ‘out there’ also begins with safety in the home base.

Safety out there also begins with safety in the home base. Designating our workers as employees with benefits—as opposed to contractors—allowed us to put protocols in place in both operations and maintenance and high standards endorsed by the Occupational Safety and Health Administration (OSHA). This operation would have been much less achievable with an ad hoc staff.

In order for companies in the ride-share and shared mobility space to truly unleash their potential, we must first gain public trust by improving the job we do on safety. Part of this will require that city planners and urban voters reimagine the nature of transportation infrastructure away from cars and toward biking, walking, and scooter transportation. It’s also vital that companies themselves give their workers every reason to do careful, excellent work in maintaining their fleets. As private-public partnerships create another way for people to move around, we need to make sure our workers are as supported as the workers behind transit agencies.

As the pandemic continues to demonstrate, the choice between safety and economic growth is a false reality, and companies should not pose these options against one another. At the end of the day, treating workers well is ultimately the safest choice for both businesses and their customers.


Kyle Rowe is the global head of government partnerships at Spin, the micromobility unit of Ford Mobility.




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When the pandemic struck Indonesia, urban gig workers were hit the hardest

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“We know what can end poverty. But how come poverty never diminishes?” was the reply I received from Harry, who works as a gig worker in a city in Scotland when we were discussing poverty. The reason I specify his identity is because it is significant to what I am about to elaborate.

Indonesia’s rural poverty has always been higher than in the cities. In September 2019, urban and rural poverty hit 9.86 million and 14.93 million people, respectively. But when the pandemic struck, more households were plunged into poverty. As of March 2020, the urban and rural poor were already 11.16 million and 15.26 million, respectively.

The spike in rural poverty was not as high as in urban areas. Does this mean that urban communities are more prone to external shocks? Maybe. But we should dig deeper, deeper, and deeper. Based on the Statistics Indonesia (BPS) database, there is not much disparity in bi-annual poverty trends between urban and rural areas. Even though poverty is much higher in Indonesian villages than in cities, the pace is quite similar. So, what makes March 2020 different? Both areas were hit by the same pandemic, but why was the spike in urban poverty four times larger than in rural areas?

There might be a lot of plausible reasons behind this, but perhaps we should examine what has been sitting in front of our eyes: the unequal geography of the gig economy in Indonesia, which, in the case of COVID-19, protects rural areas from more poverty cases.

The gig economy is mainly concentrated in urban areas, where people are no longer in the process of catching up — they are already there. Gig workers represent 5% of Indonesia’s workforce. The majority of them work in urban areas. They were among the main recipients of the negative effects of COVID-19.

On the other hand, Indonesia still has much homework to do for its villages. It needs to improve infrastructure, education, access to health services — all of which can pave the way to ending poverty. The slow progress in meeting these needs leads to an automatic rejection — or slow absorption — of innovations in employment and economic activities. The low concentration of the gig economy in rural areas corresponds to a smaller presence of COVID-19 infections in rural households, whose incomes are slightly above the poverty line.

So, what does that tell us about the nature of the gig economy and poverty in Indonesia? The answers are threefold.

First, gig economy work in Indonesia is extremely fragile — it exposes workers to the risks of living in poverty after giving them a taste of heaven for a split-second. Gig workers can be independent contractors or contract workers at big firms, other forms of temporary workers, or online platform workers. The new poor in urban Indonesia mainly come from online platforms.

Digital labour platforms, such as ride-hailing services, were supposed to bring more job opportunities to low-income families. And that was at least what we thought had happened. Nevertheless, by seeing the concentration of digital innovation, it looks as if profit always outweighs any social motive.

Second, the disproportionate levels of the gig economy between rural and urban Indonesia makes the low innovation in rural Indonesia more evident. In the case of COVID-19, the lack of innovation acted as a buffer against poverty, but it might also be the reason behind rural Indonesia’s slow progress in reducing poverty. Innovation has a blank face. Whether it turns out to be good or bad depends on how we make use of it. Before intensifying innovation in rural areas, the government ought to design social protection policies for all kinds of gig labourers.

Third, it is time to put an end to the stigmatisation of rural communities implying that they are backward, with low ability to succeed, and that “rural” means poor. Regardless of country or province, “rural” is associated with third world nations. Looking at the unequal geography of the gig economy, prejudice is another reason why innovative projects rarely target rural areas.

This is our life now. The life we had prior to digital innovation has become history. We can study it, but we no longer live in that period. Whether we want it or not, temporary and remote working are becoming the new normal. That will eventually reach all Indonesian villages. But even if we already know what is going to happen, there is no harm in coming up with a plan. Because odds are, digital innovation in rural areas will intensify inequality of income and deepen poverty.

Local governments in rural areas must promote innovation, but they should also prepare the buffers that will protect gig workers from economic turbulence and smoothen the transition to the gig economy.

To begin with, local governments must build a foundation for employment innovation. This includes creating a mechanism to bring equality between gig and non-gig workers, such as establishing shared social protection responsibility between rural governments and employers in the case of workers coming from poor or low-income families.

Harry’s comment that poverty never decreases, although not entirely accurate, bears some truth. We know that education is key to poverty eradication, and access to finance can expand people’s mobility and improve their livelihood.  Yet the reason why poverty rates remain high is that policymakers fail to adapt poverty alleviation policies to contemporary forms of livelihood. Accurate poverty-targeting strategies are not merely about serving those who live below the poverty line; they are about understanding poverty. And the gig economy is one of the many faces of poverty.

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Notes:

  • This blog post is an edited version of an article that appeared first in The Jakarta Post, and is reproduced here with permission from the author and the newspaper.
  • The post expresses the views of its author(s), not the position of LSE Business Review or the London School of Economics.
  • Featured image by Fikri Rasyid on Unsplash
  • When you leave a comment, you’re agreeing to our Comment Policy

Namira Samir is a PhD candidate in human geography and urban studies at LSE.

 

 

 

 

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Bringing In a Seamless Technology-Based Hiring Programme for Gig Workers

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5 min read

Opinions expressed by Entrepreneur contributors are their own.


You’re reading Entrepreneur India, an international franchise of Entrepreneur Media.

With the pandemic around the world restricting our movement and physical behavior, how do you ensure large-scale hiring of gig workers? Gig economy is one of the few sectors gaining demand and to match the supply it must have a quick and efficient on-boarding process.

The traditional hiring methodologies are passé, to speak the least as they don’t support the scale of hiring gig workers. The unstructured and manual verification processes cannot provide quality assessment of the on-boarded workers. This is true across the industry—cab aggregation, food delivery, logistics or professional service marketplace.

The challenge

Gig economy companies need to hire verified workers with clean background to mitigate risks of employee fraud or customer harassment. The challenge is that delay in on-boarding means potential business loss. And with pandemic around, the physical dependencies are making it more difficult to background check and onboard gig workers quickly.

Any future-ready organizations in gig economy must lay a strong foundation of on-boarding workforce that meets their dynamic needs at a large scale.

Automation is imperative to remain competitive in the current scenario

Authentication technology and digital workflows are solving this problem. A seamless integration of technologies delivered on an easy-to-use dashboard can do the trick. Real-time verification and process automation can be used to seamlessly digitize and allow remote and paperless on-boarding.

Background check: Organizations need to validate identity, criminal background and address of the candidates. Technologies such as AI/ML, facial recognition, OCR and deep search can deliver these verifications remotely.

Automation technology integrates databases, online document collection and verification. Once the IDs are verified and no criminal history is found, then the address of the worker is verified digitally via geo-coordinates.

Onboarding: Automation of document collection, data transfer and data enrichment can reduce on-boarding time drastically. This combined with electronic signatures means truly paperless processes and no redundant documentation.

Recent developments in recruitment technologies have effectively helped in managing the hiring processes better by focusing on these key points:

Enhanced visibility for better recruitment

With all the reports and the data stored online, it has become easy to not only manage the data over cloud, but it has brought in ease in the analysis domain. Now, the HR need not put in extra hours to first store the physical report and then digitalizing it in a suitable format and then analyzing the same. With the information filled in and stored digitally, the HR can design dashboards basis the desired inputs and can come with hiring based insights at a much faster pace and with minimum manual error possible.

Streamlining workflows to reduce turnaround time of processes

With the hiring process, background verification process and document storage now being online, it has made the whole hiring process digital and more in-sync. Earlier while the employee information gathering being online, it still had to go through a manual background verification process and physical document collection and storage process which not only resulted in drop in efficiency but also these process were difficult to manage as they were not synced up. But with all these processes online, their workflows can now be streamlined and synced together to give a more seamless experience.

Centralizing the whole recruitment process and mitigate risk

With the complete hiring process digital, streamlined and synced up on a common platform, it has helped in making the whole recruitment process centralized. This has not only helped in reducing the turnaround time in the various processes involved but has also helped in improving efficiency, making the data ready for analysis, reducing errors during manual handling and storage of physical data. With all the data stored online, it is easy to check the audit trail to verify the data handling process alongside making the processes to being integrated with future technologies that might come up in the domain.

One can say that big changes could be coming to the gig economy. With the ever-changing regulations in the sector, it becomes critical for the companies to pay close attention to whether their gig workers feel empowered or exploited. Effective workforce management, that includes employee onboarding as well, will become more important than ever. As more employees on and off-board, companies will want to keep a close eye on the constant alignment of talent supply and demand.

Cloud-based systems that put all that information in one place will continue to play a big role. And more than ever, employee experience will be a differentiator. With so much competition for talent, experience will be even more important. They will want to work in systems that use machine learning to understand to come up with insights that will help in managing and recruiting workforce in a better way. Gig workers have a myriad of opportunities at their fingertips, so anything companies can do to keep them on board will help build retention.

To say the least, technology is not only making the whole hiring process simple, it’s also delivering a seamless experience to hiring teams and candidates along with helping the HR in building stronger retention strategy.

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