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Coronavirus could destroy much of the U.K. gig economy—despite emergency handouts | PaymentsSource



On Friday morning, Fiona Lockyer logged onto the U.K. Live Events Freelancers Forum — a Facebook group with more than 7,500 members who are all self-employed contractors within the U.K. entertainment industry — to be greeted by a mixture of relief and confusion.

For Lockyer and many others who work in the gig economy, which employs some 4.7 million people in the U.K., the Self Employed Income Support Scheme announced by the U.K. government last week will prove a lifeline amidst the widespread economic chaos resulting from the coronavirus-induced lockdown. A taxable grant covering up to 80% of a self-employed individual’s estimated income over the next three months, to be paid in a single lump sum at the beginning of June, the scheme will provide a vital lifeline for many of these workers who have seen their regular sources of income disappear almost overnight.

“It has solved an awful lot of stress and worry,” said Lockyer. “The events industry shut down voluntarily ahead of everybody else. My last event was March 11, and the fact that self-employed people were completely left off the initial government payment announcements and not even considered was really scary.”

The gig economy flourished in part for its ability to get timely payments to workers. Uber and Lyft, for example, offer express payments to drivers who need to use those funds to refill their gas tanks before picking up the next rider. But these payment innovations mean very little when there isn’t sufficient money flowing into the system.

The U.K.’s grant to self-employed workers should ease this pain, but there are still many problems to be solved. Firstly, the payments will not be processed until June, meaning Lockyer and others will have to apply for the Universal Credit unemployment benefit payments scheme in the meantime. And the grant does not apply to new freelancers, who have yet to file a tax return — having only been working in the gig economy since April 2019 — as well as the many gig economy workers who have registered themselves as limited companies rather than sole traders.

The Association of Independent Professionals and the Self-Employed (IPSE), which has been working with the government to devise the new Income Support scheme, based on a similar model being rolled out in Norway, expects that there will be changes.

“There are about two million people who have registered themselves as limited companies,” said Ryan Barnett, an IPSE economist. “We need better protections for these different groups, and hopefully people who’ve been self-employed for a short amount of time can become eligible. The government’s attitude is they tend to roll these things out, and then work back to fill in the gaps a little bit.”

While the current scheme is only supposed to cover the next three months, Alan Lockey, head of the Royal Society’ Future Work Centre, predicts it will later have to be extended to a minimum of six months due to the scale of the ongoing crisis.

“I think both the employee and self-employed packages will be extended,” said Lockey. “I think the government will keep paying until we’re out of this, because what’s the alternative? It’s difficult to see an exit strategy within the current timeline. Maybe in six months, there might be grounds for thinking that we might be able to restore some of the economy beyond the summer.”

But when the crisis does subside, there is a serious danger that besides delivery and distribution workers, there may be not much of the gig economy left.

As entire industries struggle to re-emerge from lockdown, many workers are likely to be left relying on Universal Credit payments for a prolonged period of time. Barnett predicts the economic impact to be far more severe than the 2008 financial crisis, pointing out that many entertainment industry workers have already had jobs cancelled until the end of 2021.

“That is long term economic malaise locked in,” he said. “Because you can’t just reanimate whole industries out of a box in six months’ time.”

In addition, with Chancellor Rishi Sunak threatening to leverage higher taxes on self-employed workers, many fear that working in the gig economy will no longer be economically viable.

“I would hope that freelancers might end up with getting some better protections in the future because this has illustrated the unstable nature of our careers,” said Lockyer. “What I suspect is we’ll all suddenly get moved onto a higher tax bracket. And I suspect it’s going to come back on our heads, heavier than other people’s.”

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The Gig Economy Is a Vampire That We Shouldn’t Make Peace With




When organized labor frets about the future of worker power in America, they usually focus on the decline of organized labor itself — a half-century of plummeting union density has reduced unions from a powerhouse institution to a niche. That’s a problem. There is an even larger underlying issue, though, that the labor movement now has to factor into everything it does: Not just the disappearance of unions, but the eradication of jobs as we know them. 

That doesn’t mean mass unemployment. It means the gig economy,” a friendly name for a force of capitalist nature that systematically seeks to set everyone’s nice, traditional full-time job on fire and blow the ashes into the wind. Though we are told an inspiring story of how the rise of the gig economy has been driven by the entrepreneurial genius of people like Uber founder and frat boy dumbass Travis Kalanick, the truth is that all of it is an inevitable response to the basic insight that there is money to be made by being able to command a huge work force while minimizing the number of them that you actually call employees.” Thanks to our nation’s wretched labor laws, any company that is able to designate a worker as an independent contractor” rather than as an employee can avoid paying for the high cost of benefits, and get the added bonus of ensuring that those workers are legally barred from unionizing, a right which is only afforded to employees. Thus the entire gig economy can be seen as corporate arbitrage of labor law, in which a company is able to stick all the money it would have spent providing for employees into its own pockets by relying on the legal fiction that its workers are not its responsibility. 

All of the arguments about the flexibility” and freedom” that gig work provides might have merit in a vacuum, but they are utterly cynical in the real world of the United States, where we have foolishly chosen to tie enormous parts of our social safety net to people’s jobs. Here in the richest and most powerful country on earth, all of that freedom and flexibility just means that you do not get health insurance or legal workplace protections or the right to a union. We should not allow the companies, whose primary goal is to minimize labor costs and legal responsibilities by reclassifying employees, to act as if this whole conversation is taking place in Happy Fairyland, where nobody has to worry about health insurance. We must live where we are. And where we are, the growth of the gig economy is a flat out battle between labor and capital. 

Taxi drivers become Uber drivers. Grocery workers become Instacart workers. Delivery workers become DoorDash workers. The effect is that the workers must work even harder to make a living without receiving the standard suite of benefits that full time employees get, savings which are then funneled to Wall Street and Silicon Valley. It’s a system that mints tech billionaires and makes thousands of regular people live in their cars. This is called progress.” It’s not. 

No one understands this dynamic better than the companies themselves, although they inevitably lie about it. Beyond the familiar app-based companies are a slew of more anonymous staffing firms that exist to allow companies everywhere to lay off portions of their full time work force and then rehire contractors” for those same roles. It’s the same economic impulse that has propelled outsourcing, but for jobs that can’t be moved overseas. The unavoidable financial logic of this impulse means that every employer has an overwhelming incentive to gig-ify as many jobs as possible. It won’t stop with drivers and delivery workers. The gig economy is coming for all of us. It is an inequality multiplier, an existential threat to the structure of work, and to the flawed and delicate system we have that provides the basic necessities for Americans to live.

This isn’t a novel insight. I say it only to properly frame the conversation that the labor movement needs to have. Gig companies just spent a fantastic sum of money getting Prop 22 passed in California, which cements their independent contractor” model and makes it much harder for the state to reclassify their workers as employees. They are now working to export Prop 22 clones to states across the country. In an excellent Businessweek story last week, Josh Eidelson reported that major players in the union world — SEIU, the Teamsters, the New York AFL-CIO, and others — are now open to holding discussions with gig companies to reach some sort of grand compromise” between the gig economy and organized labor. What the gig companies want is for labor to stop fighting them on the issue of employee classification, and to instead settle for some sort of deal that would maintain the independent contractor” model but grant workers various benefits, like pay minimums. 

This is a mistake, and a dangerous one. What is at stake is not just the gig economy as it exists today, but the potential of a dystopian future in which the gig economy continues to grow until full time employment, which has been taken for granted as the norm in this country for generations, is reduced to an elite status for the few, while the masses are transformed into contractors who are left to fend for themselves. This is not a remote threat. If we do not put up guardrails to prevent it, it will happen, just as surely as global free trade” caused American manufacturing jobs to disappear overseas. Assenting to it will be just as bad an idea as free trade without strong worker protections was. Gig companies want to make organized labor think that this battle is already lost — that the reasonable move now is simply to focus on what can be done in the context of our new economy. But if unions don’t hold the line on fighting for workers to be classified as employees, nobody else will. What may seem like a small concession now will be looked back on as a turning point, when labor ceded something to capital that will be extremely hard to wrest back. 

There is, of course, the non-insignificant question of what to do for all the gig workers who already exist. On this point, I spoke to Brendan Sexton, the head of the Independent Drivers Guild, which was formed in New York City five years ago out of an agreement between Uber and the Machinists Union. Today, the IDG (which is a worker center rather than a union) represents more than 80,000 rideshare drivers in the New York area, and has played an instrumental role in winning things for drivers like minimum wage, tipping and the ability to appeal deactivations by the company. 

Sexton, a veteran of the UFCW, says that his focus is a practical one: To improve drivers’ lives in a tangible way as quickly as possible.” Besides the everyday work of organizing around the immediate concerns of drivers, Sexton is pushing a Right to Bargain” bill in New York, which would establish collective and sectoral bargaining for drivers at the state level. A survey IDG conducted in late 2019 showed that more than 90% of drivers said that they wanted a union. Since U.S. labor law says they can’t have one, the IDG sees a path to state-sanctioned collective bargaining as the next best thing. Sexton knows that labor law needs to be reformed, but he is also responsible for doing what he can for drivers until that happens. He does not dwell on the more theoretical questions that could take many years to play out. I don’t have a lot of faith in the federal government” coming to the rescue, he says. We’re just looking at the here and now.” 

It is crucial for the labor movement to recognize that it can fight for existing gig workers, as the IDG does, without giving in on the larger question of whether all of those people deserve to be classified as employees. There is no conflict between fighting where we are today and fighting to be in a better place tomorrow. As important as labor law reform is, unions can’t assume that it will happen. The Taft-Hartley Act gutted worker rights in 1947, and we haven’t succeeded in reversing it in more than 70 years. To decide to acquiesce to the basic proposition of the gig economy — that workers are not really employees,” and therefore it is okay that they do not receive the rights and benefits that employees are entitled to — is to concede defeat. Unions may imagine that they can do so as a short-term tactical move because they will be rescued by a coming overhaul of hostile labor laws, but that has proven to be a losing bet for our entire lifetimes. 

Containing these gig companies and preventing their spread is an important goal for labor in and of itself. The gig economy is a vampire, staring deeply into our eyes to hypnotize us into complacency as it prepares to suck everything out of us. I hope we don’t have to wait until the job of union president has been Uber-ized before the labor movement sees the light. 

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Gig companies’ push for state-level worker laws faces divided labor movement, Auto News, ET Auto




Amid the controversy, efforts to have the bill introduced before the end of the state's legislative session this week failed.
Amid the controversy, efforts to have the bill introduced before the end of the state’s legislative session this week failed.

By Tina Bellon

Uber and other gig economy companies are trying a new approach to ending their battles with unions and getting ahead of possible federal regulation that could upend their business based on classifying workers as independent contractors.

In New York, for example, gig economy companies are working with several unions including the Machinists and Transport Workers Union to strike a compromise that would allow drivers and food delivery workers to organize in a union and negotiate minimum pay and other benefits without being reclassified as employees.

With the support of the unions, the gig economy companies are pushing state lawmakers in Albany to pass a bill that would allow workers to negotiate wages and caps on company commission fees, and provide unemployment insurance in some circumstances.

Among the most vocal opponents of a proposed bill to achieve that goal is the Service Employees International Union’s (SEIU) northeastern Local 32BJ, which says the compromise would enshrine gig workers’ misclassified status and create a company-sanctioned union that would only further erode workers’ rights by setting no floor for the negotiations.

“This legislation moves workers backwards,” Kyle Bragg, 32BJ’s president said. “There’s too much company manipulation.”

Amid the controversy, efforts to have the bill introduced before the end of the state’s legislative session this week failed.

New York is just one of several states where gig economy companies led by Uber, Doordash, Lyft and Instacart are courting unions and state officials in an effort to cement their workers’ status as independent contractors across the United States.


The push by the gig economy companies has exposed divisions within organized labour over whether to bargain with the companies or insist on workers being reclassified as employees with full protection of U.S. labour standards – and a clear legal right to join unions.

The rifts at times also run within the same union. For example, while 32BJ rejects the New York bill, SEIU President Mary Kay Henry in the past said she would back workers’ demands in reaching a deal with companies. The SEIU declined to comment on this story.

Similarly, the New York chapter of the AFL-CIO, the largest U.S. labour federation, backs the compromise proposal, while members of its Colorado chapter said they were opposed to bargaining agreements with the gig companies.

According to a Reuters review, the companies over the past few months set up lobbying groups in Massachusetts, New York, New Jersey, Illinois, Colorado and Washington to push for laws that declare app-based ride-hail and food delivery drivers independent contractors, while proposing to offer them some benefits. In some states the companies hope for buy-in from labour groups, company and union officials said.

The companies are trying to build on their success in California, where voters approved an industry-backed ballot measure that exempts ride-hail and food delivery workers from rules that require other types of contractors to be classified as employees, and provides them with limited benefits.

The companies say they pursue tailored policies for each state to combine flexibility for their mostly part-time workers with benefits and protections. They have yet to offer concrete proposals in most states.

Some executives hope state-based independent contractor laws can also forestall federal action by the labor-friendly Biden administration, which has vowed to end the misclassification of workers as independent contractors.

“The models that are developed at the state level can be given a framework at the federal level,” Lyft President John Zimmer said during an interview last month.

While any state law could be superseded by federal rules, Zimmer’s calculation assumes that the U.S. Labor Department is less likely to act once facts on the ground are established.

The companies’ race for state backing runs counter to the labor movement‘s single biggest legislative priority, the passage of a far-reaching labor reform bill known as the PRO Act in Congress. The bill would make worker organizing easier and among other things reclassify most independent contractors as employees for the purpose of collective bargaining, though not for wage laws and benefits.

The bill is unlikely to pass the Republican-led U.S. Senate, but even if it did, several years of regulatory and court wrangling would ensue, a time during which gig workers’ rights would remain unchanged, said Wilma Liebman, former chair of the National Labor Relations Board.


Some union figures have therefore taken a more pragmatic approach. Andy Stern, former president of the SEIU and at the time one of the most politically influential labor leaders, for the past six years has been trying to strike deals between the gig companies and unions, including failed attempts in California to ward off the ballot measure.

The California referendum, a costly victory for the gig companies, was also a cautionary tale for unions, as well as for drivers, who are now left without any avenues to organize or object to the terms stipulated by the companies.

Stern said internal union surveys in New York had repeatedly shown that a majority of drivers did not want to be employees and said debates focused solely on reclassification were based on unrealistic and purist sentiments.

Stern instead advocates for drivers’ rights to organize in unions and negotiate their own contracts.

“Give a worker a union and collective bargaining and they’ll decide themselves what kind of status, wages and benefits they want. People who believe litigation and legislation are the solution have failed these workers,” Stern said.

Stern and others dubious of reclassification point to Seattle and New York City, where years of union efforts to organize drivers have led to the only driver minimum wage laws in the country.

Uber and Lyft have rocky histories with unions and workers who want to organize. The companies in 2015 enlisted the U.S. Chamber of Commerce for a years-long court battle against a Seattle law spearheaded by the Teamsters union that would have allowed ride-hail drivers to bargain collectively.

Uber more recently appears to have opened up to such agreements, however. The company last month recognized Britain’s GMB union as the collective bargaining unit of its 70,000 British drivers. Lyft’s Zimmer said the company was having constructive conversations with labor leaders.

Many union officials remain skeptical about basing workers’ fate on the goodwill of companies.

“You never get everything you want out of collective bargaining…and it would be better to give drivers more options and protections under the law,” said Kjersten Forseth, political and legislative director for the Colorado AFL-CIO, which plans to make state-based gig worker policy solutions its focus over the next two years.

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Crum & Forster names veteran to lead captive and gig economy drive




Crum & Forster (C&F) has tasked Mark Srygley with expanding its captive solutions and gig economy offerings. 

Srygley has spent more than 30 years with C&F and previously worked in the property and casualty (P&C) business, most recently as senior vice president of underwriting and business development. 

In his new role he will work within the accident and health (A&H) division, strengthening its underwriting expertise and enhancing the tailored offerings for captives and the gig economy.

He has helped create custom insurance solutions for large and complex clients in non-traditional industries. He has also worked with underwriting and development teams to craft solutions and products that meet the challenges of micro and small business clients.

C&F is keen to develop and implement strategies for captives where the offerings that are currently available have proven difficult to place, ensuring C&F can provide specialised coverage for unusual or hard-to-insure risks. These new offerings can include both standard lines of business for both A&H and P&C, and extend to all other lines.

Clients operating in the sharing – or gig – economy often require bespoke products, C&F noted. It is therefore creating a “single-stop” approach for clients whose needs require strategies and solutions across multiple disciplines.

David Kaplan, vice president of A&H at C&F, leads the initiative, alongside Srygley. Kaplan said: “Mark brings with him a wealth of underwriting experience, knowledge and product acumen across many property and casualty lines, as well as a deep understanding of insurance analytics.”

Srygley added: “We have a tremendous opportunity here to offer the market new, innovative products and solutions that can fit a multitude of needs for our clients – both in the A&H and P&C space.” 

Susan Silfen, senior vice president of A&H’s specialty business unit, praised the breadth of Srygley’s knowledge and underwriting, which “will be invaluable in helping to expand A&H’s product capabilities in line with our billion dollar execution.”

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