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It’s official. In Britain, Uber Technologies
The deal is a (minor ) blow to the ride share company, but could become a major hit to the broader economy if policy makers don’t show restraint.
On Friday, Britain’s supreme court ruled in favor of a group of former Uber drivers that they were employees and not contractors. Exactly how much compensation the workers will receive remains to be seem and will depend on the results of a U.K. employment tribunal.
Uber shares were down 0.8% in early trading Friday. But the company maintains that the ruling applies solely to those who sued because it has substantially changed its policies since the suit was brought in 2016, according to a recent report from Motley Fool.
Still, the court decision surely sets a precedent that other former drivers may try to exploit. Expect more suits in the coming months.
However, we can’t expect this to hurt Uber dramatically over the longer term. The ride share company, and its competitors are here to stay with Uber likely remaining in pole position in its niche for the foreseeable future.
The reason is that consumers really like using Uber and it will hard to tell them that they can’t have it after years of enjoying the service.
That means stock holders should not worry about their investment in the company. It will likely continue to do well as increasing numbers of people opt for the service versus paying for traditional taxis.
Perhaps more important is the court ruling, which could be seem as a larger blow to the gig economy.
While informal working arrangements are much-derided by unions and those on the left, they are embraced by many (me included.) This type of work suits people who want flexibility and dare I say it, freedom from being beholden to a single employer.
No doubt the U.K. ruling will embolden politicians and activists (on both sides of the Atlantic) to push the idea that anyone who does (any) work for a company must be declared an employee. That should worry everyone, and not just because gig workers overwhelmingly like being gig workers.
The gig economy contributes around 8-9% of the U.S. economy and likely similar in the U.K. To put that in perspective, that’s about as much as the U.K. economy got hit by the COVID-19 pandemic in 2020.
Put simply, if the gig economy disappears because of increasingly harsh legislation, such as that seen in California, or restrictive court rulings, like that in the U.K. , then the economy will likely get hit very hard.
In such a case, everyone will suffer including investors.
Unemployed Americans who have turned down job offers because they feared their prospective employers weren’t providing sufficient protection from the coronavirus would qualify for jobless aid under a directive the Labor Department issued Thursday.
The measure would also expand a federal unemployment benefits program, established in last spring’s economic relief package, to cover workers who have lost hours or who were laid off because of the pandemic. It would also cover school employees who lose jobs or work hours because of school closings.
The federal program, known as Pandemic Unemployment Assistance, made the self-employed and gig workers eligible for jobless aid for the first time.
“Until now, unemployment insurance benefits during the pandemic have been too scattered and too uncertain,” said Patricia Smith, senior adviser to the labor secretary. “That begins to change today, with many more workers now eligible for unemployment insurance benefits.”
Speaking to reporters, department officials declined to estimate how many Americans would now become newly eligible for jobless benefits.
The benefits will be made retroactive, officials said. People who applied for unemployment benefits after Dec. 27 can receive retroactive payments back to Dec. 6. Those who applied before then and were turned down can receive retroactive payments dating back to when they first applied.
With unemployed Americans now receiving a $300 weekly federal payment on top of state benefits that average about $320 a week, the retroactive aid could result in significant lump sum payments. The department estimates that states won’t be able to update their jobless benefit systems to include the new criteria until late March, which could mean that the first payments would amount to about four months of benefits.
Workers whose employers have closed because of the pandemic are already eligible to receive jobless aid from the federal program. But workers who were laid off even as their company remained open, such as waiters at a restaurant that stayed open for delivery, weren’t eligible. This directive will now cover those workers, the Labor Department said.
For the unemployed who have turned down jobs out of concern over the coronavirus, applicants will have to state under penalty of perjury that their prospective employer wasn’t meeting state or local guidelines on mask-wearing or personal protective equipment, said Suzi Levine, a deputy assistant labor secretary.
TORONTO, Feb. 25, 2021 /CNW/ – The Gig Workers United campaign launched today with a bold scope and agenda for change. Delivery workers say the status quo is simply unsafe and unliveable for those whose jobs are controlled by apps. The workers have come together to call on employers and legislators to make fundamental changes.
“We have to stand up for ourselves – the streets don’t look out for us, the apps don’t look out for us, so we’re looking out for each other and collectively calling out a bad business model,” says Narada Kiondo, one of the courier spokespersons. “The way it is just can’t continue – if the gig economy is going to work for our society than it can’t be based on squeezing delivery workers and restaurants for profit, and dodging our labour standards. And we’re going to persist, and we’ll win, because our bodies and our livelihoods are on the line.”
The roots of this struggle are in experiences including the successes of Justice for Foodora Couriers, which showed over the last two years that collective action in the gig economy is possible, that victories are there to be won, and that the organizing campaign itself makes a real difference in workers’ lives. One year ago, the couriers won the legal right to join a union, and the vast majority voted yes.
Foodora, the employer that was the target of that struggle, is no longer operating in Canada, so the workers have broadened their scope in a new drive to organize delivery workers for all the apps. Working conditions, health issues and risks are common, and many couriers work for multiple apps. Now there is a common home for them to work collectively on their demands.
Jan Simpson, National President, spoke about how CUPW has welcomed the delivery workers into the organization: “The couriers have shown that traditional union organizing is possible in this space. But they’ve gone farther than that, with community-organizing tactics and collective mutual aid. They’ve formed a worker-led organization that we’re proud to support because their fresh energy and ideas are what it takes to improve working conditions and reject silicon valley’s model of exploitation.”
“Our demands are reasonable but our vision is big,” says Arash Manouchehrian, another courier. “We need liveable wages, and transparency on wages and scheduling. We need health and safety protections, we need bathroom access, warm-ups, breaks, all the things that most of our society expects as basics for all workers. We have rights, and it’s up to us to assert those rights until we get the system fixed.”
SOURCE Canadian Union of Postal Workers
For further information: please contact CUPW communications at [email protected] or 613-882-2742
James Yang is still angry over the road deaths of five colleagues at work who suffered the same pressure he felt as a food delivery driver.
The Chinese migrant worked for Hungry Panda but says the company booted him off the app after raising concerns about conditions.
Mr Yang earned as little as $12.50 an hour working 12-hour days.
He and fellow gig economy workers met with politicians at federal parliament on Thursday, campaigning for the same rights afforded to other workers.
Labor leader Anthony Albanese believes gig workers should be given the minimum wage and greater scope to access other base employment standards.
He urged the Morrison government to stand up to Uber and Hungry Panda in the same way it took on tech giants over the news media bargaining code.
“What we can’t have is a circumstance whereby we have two industrial relations systems,” Mr Albanese said.
“One that has pay, one that has annual leave, sick leave, one that has conditions that most Australians take for granted, and another whole section of society who are marginalised, who don’t enjoy any minimum wage.”
Industrial Relations Minister Christian Porter said he had a great deal of sympathy for Mr Yang but he’s not going to tell him there’s an easy fix.
He said the Fair Work Commission had consistently ruled gig workers were contractors and not subject to the same conditions as employees.
Mr Porter said media code negotiations with Facebook and Google were years in the making after a consumer watchdog inquiry.
He noted the cost to business of changing the gig model and impact on consumer pricing as key complexities in regulating the sector.
Rideshare driver Malcolm McKenzie said gig workers didn’t have the same avenues to pursue unfair dismissal.
“Drivers face the possibility of termination through the app as a result of a fallacious claim against them, unsubstantiated claim against them,” he said.
Delivery driver Ashley Moreland said he faced losing his job if orders weren’t met on the company’s timeline.
“It really is time that laws caught up to the technology and that we brought some rights to this industry,” he said.
“Because I think it’s a bit of a shame that in a modern developed democracy, we have this situation of third world work.”
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