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Is the gig economy worthwhile to individuals as the industry booms during a pandemic?

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After his garden lighting business slumped due to lockdowns, Jonathyn Morley from Nambour signed on to become a delivery driver for an online platform.

And with that move, Mr Morley became part of Australia’s burgeoning $6.3 billion gig economy.

According to the Macquarie dictionary, the gig economy is “individual workers … employed on a contract to do a particular task for a set time with little connection to their employer”.

They include “dog walkers, people who do food shopping and deliveries [and] drivers in ridesharing services”.

Person holding a phone tracking an Uber driver
Rideshare and food delivery companies have seen a spike in lockdown use, but critics say that they can be a form of slavery for contractors. (

ABC News: Malcolm Sutton

)

Mr Morley said he got the idea to sign up to a driving platform from his wife.

“[She] was working at a bottle shop and she mentioned that they were having problems with delivery drivers, so I signed up on an app … to give it a go,” he said.

“The good thing about the app is that it tells me where the delivery needs to be picked up and dropped off, and the price, so that way I can make the determination whether I want to take the job or not.

Gigs see nine-fold growth

The Australian Bureau of Statistics reported that in April 2020, underemployment hit a record high of 13.8 per cent, and in June of that year, unemployment hit a record high of 7.5 per cent — the highest level in over 20 years.

For lots of people the gig economy was a way of keeping money trickling in, and flexible.

Danielle Scott from Mackay started delivering food in June last year after losing her job at a local restaurant.

“I signed up as it worked around my duties as a single mum,” she said.

“I start driving at around 11:00am until 3:00pm, then I pick up the kids and then jump back on from 5:00pm to about 9:00pm,” she said.

Masked delivery driver in a car with a bag of takeaway food.
The gig economy grew during 2020 lockdowns with restaurants solely reliant on drivers. (

Supplied: Uber

)

According to the Actuaries Institute, the Australian gig economy figure of $6.3 billion was a nine-fold rise between 2015-2019, with a gain of 32 per cent in 2019 alone.

Career trainer Sue Ellson, author of Gigsters: Any Age or Ability Employees, Experts and Entrepreneurs, said technology was changing workplaces.

“In the future we have to be open to the idea of doing a number of different things.”

Sue Ellson holding up a copy of her book Gigsters at its launch in 2019
Author Sue Ellson says that we can’t consider the idea of a job in the future, instead we have to consider the idea of work.(

Supplied: Sue Ellson

)

Ms Ellson said thanks to technology we can work from home or work when it suits us.

“I use the term gigsters as someone who uses technology to attract aligned gigs,” she said.

“People can work out what their skills are and use technology to cherry pick the gigs that suit them.

“We can now have a better life rather than just working 9-5.”

Ms Ellson said despite businesses closing, the pandemic increased the gig economy.

“A lot more people are now prepared to use technology compared to before the lockdowns,” she said.

“A lot of businesses embraced technology during lockdowns to keep business turning over [and] employing gig economy workers to make it work.”

Divesting responsibility

While there are benefits to the gig economy, Ms Ellson said there were also negatives.

“If you see a window cleaning job … for $30 at someone’s house, by the time you get there, clean the windows, and supply the equipment it may not be worth $30 to you.

“But if you do it for a small business and they like what you do they may ask you to come back and do it regularly.”

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Australia’s gig economy and casual workforce in the spotlight.

While some riders and drivers are happy with their working conditions, others say the work can be dangerous.

Delivery riders and drivers have fewer rights compared to employees, such as a minimum wage, superannuation, workers compensation, and paid leave.

In late 2020 five delivery riders died nationally over a three month period.

The Transport Workers’ Union (TWU) argues the system is designed to exploit workers and allows companies to divest themselves of responsibility to their riders.

A masked food delivery driver waiting on an order at a fast food restaurant
Delivery drivers are independent contractors and therefore have fewer rights than employees.(

Instagram: Abuzar

)

TWU National Secretary Michael Kaine said regulation of the industry, including reviewing the work status of riders, was urgently needed.

 “This is a sector that’s totally unregulated,” he said. 

“We really need governments … particularly the federal government to step up and acknowledge this and deal with the consequences.”

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Portugal – Gig-economy workers set to be formally employed (Reuters)

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26 October 2021

Portugal has moved a step closer to ordering work services platforms such as Uber and Glovo to employ some of their drivers as staff with formal contracts and benefits, becoming the latest European nation to tackle the gig economy in this way, reports Reuters. The bill, which was approved by the government last week but still needs to get the final stamp of approval from parliament, aims to grant thousands of riders working rights as employees and not freelancers. It is likely to be approved as the Socialist government has the support from other left-wing parties. Portugal’s Labour Minister Ana Mendes Godinho said the bill assumes that a worker of the digital platform operator is staff with a formal contract whenever there is evidence of relationships between the platform, the worker who provides the service and the customers.

Earlier this year, the Spanish government announced a decree that food delivery companies based in Spain must hire their riders as employees and not freelancers. Also, earlier this year the UK Supreme Court ruled against Uber in a landmark case with the ridesharing firm having to classify its drivers as workers rather than self-employed.

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Startup Point Pickup’s CEO Wants to Make Gig Work a Career

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  • Point Pickup CEO Tom Fiorita said the gig work his delivery company relies on isn’t sustainable.
  • He’s launching a digital platform to increase transparency and community for retail gig workers.
  • The platform, GigPoint, is in an invite-only beta test now and will fully launch later in the fall.

For the founder and CEO of a gig economy delivery company, Tom Fiorita has surprisingly little faith in the gig economy. 

Fiorita calls his outfit, Point Pickup, the largest delivery company nobody’s heard of. Founded in 2015, its national network of 350,000 drivers make deliveries for Walmart, Kroger, and other major grocers. Its drivers and shoppers, and millions like them who work for Shipt, Instacart, DoorDash, and more, take on work one task — or gig — at a time. 

Retailers have rapidly adopted the model throughout the pandemic as delivery became an essential service. And though their conditions vary, Fiorita said the group as a whole must change to survive. 

That’s because the gig economy, while meeting the challenge of lightning-fast delivery, presents new problems. Workers are siloed from one another and contend with a lack of consistency or transparency — they often don’t know how much they’ll earn by day’s end when they start. They don’t have a central place to go for community or financial services tailored to their needs. 

“The current way it’s being done, we believe, is not sustainable in the future,” Fiorita said. 

That’s why he’s launching GigPoint, an online platform for gig workers that aims to make this kind of work a viable way of life in the long-term — and a viable business model.

The platform has launched an invitation-only beta test offering insurance purchasing, banking services, and a rewards system where workers earn points to exchange for cash bonuses, vacations, and discounts. The full version will launch for all Point Pickup drivers in the fall, and expand to the entire gig ecosystem in the future.  

‘The system’s gonna break’

The pressure is on to make gig work a better gig. Workers don’t often stay loyal to any given platform, and retaining gig workers tends to be harder than recruiting them to start with. 

“We see it all the time, they end up bopping around,” Fiorita said. He sees that “bopping around” as a threat to his company and the broader industry of gig delivery.  

“It’s gonna break,” he said. “There’s too much fragmentation.”

The GigPoint platform aims to encourage workers to keep coming back with features the company said address workers’ top priorities, including financial services like microloans and the ability to work out recurring shifts with predictable income. 

“Everything you need to be successful at gig work and be sustainable so you can continue to do it for a long period of time,” Fiorita said. 

‘A wave we cannot stop’

Major gig players like Instacart, DoorDash, and

Postmates
could all eventually be GigPoint clients, Fiorita said. So could retailers that don’t currently use gig workers. He aims to grow the platform into a digital hub for work that’s increasingly being outsourced to gig workers, like counting inventory, seasonal cashier work, and resetting store displays. 

GigPoint platform could be a homebase for any kind of retail gig, Fiorita said, with a more mindful and “caring” approach.

The company has yet to work out the finer points of how the platform will work. “We are working with gig worker focus groups now to determine the best business model,” a spokesperson told Insider. “We’re also discussing models with our retail clients — but not ready to discuss details at this time.” 

Still, the overall approach could benefit the gig companies, too, since the legal challenges to gig work are unlikely to stop.

“It’s a wave that we cannot stop. I think the government knows it,” Fiorita said. “We’re enabling the ability for true flex work as an actual classification of a worker in this country.” 

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After winning big in California, gig companies take their worker classification fight to Massachusetts

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The coalition representing these gig companies, Massachusetts Coalition for Independent Work, said it filed Wednesday to have a question put on the state’s 2022 ballot that would “grant historic new benefits” and allow workers to “maintain their flexibility as independent contractors,” something it says most drivers want.

“Without the ballot measure or a legislative solution, the future of app-based rideshare and delivery could be in jeopardy,” the coalition said, in language reminiscent of how dire the issue was positioned to Californians.

But with the benefit of seeing how things played out in California, the opposition is on its front foot this time against the playbook it believes was used last time. The Coalition to Protect Workers’ Rights, an alliance that includes labor advocates and community groups, argued this week that the Massachusetts measure would “permanently create a ‘second class’ status” for the workers, noting the majority of whom are Black, Brown and immigrants.

Classifying on-demand workers as employees has long been viewed as a potential existential threat to the business model popularized by Uber and Lyft. The companies have scaled their businesses with massive fleets of workers who are treated as independent contractors, avoiding the responsibility of providing costly benefits entitled to employees, such as a minimum wage, overtime, paid sick leave and unemployment insurance.

The companies have also shown they’re prepared to go to great lengths to get themselves a more favorable law. When faced with a new labor law in California, Assembly Bill 5, that made it much harder for companies to classify workers as independent contractors in the state, Uber, Lyft, DoorDash and Instacart spent a combined $225 million on a ballot measure known as Proposition 22 or Prop 22 to effectively side-step it. They waged an aggressive campaign of television ads, in-app messages, and confusing mailers to bombard Californians with its messaging. Prop 22 allows the companies to classify workers as independent contractors while granting some drivers certain benefit concessions, but not the full suite of protections that they would likely have gotten had the measure not passed and they were classified as employees.
Next up is Massachusetts, which has a similarly strict labor law. The Massachusetts Attorney General is currently challenging Uber and Lyft over how they classify workers, an effort the companies have indicated they intend to fight.
Similar to Prop 22, the proposed Massachusetts ballot initiative presents a minimum earnings guarantee of “120 percent of minimum wage” based on “engaged time,” meaning the only time counted is when a driver is fulfilling a ride or delivery request but not the time they spend waiting for a gig. (An analysis from UC Berkeley Labor Center had estimated the pay guarantee under Prop 22 for Uber and Lyft drivers would be equivalent to a wage of $5.64 per hour, instead of $15.60 or 120% of a $13 minimum wage, given such loopholes.)

Workers would also receive $0.26 reimbursement per engaged mile to cover vehicle upkeep and gas. (The UC Berkeley Labor Center previously pointed out that Prop 22’s $0.30 reimbursement is lower than the IRS’ estimated $0.58 per mile cost of owning and operating a vehicle.)

While the proposal includes a health care contribution from a company for certain qualifying workers, that too is based on “engaged time” and only a small portion of workers would likely qualify, according to the Coalition to Protect Workers’ Rights, due to minimum engaged time requirements. (Using “engaged time” as a metric allows for the flexibility of the job, according to the Massachusetts Coalition for Independent Work, claiming that the “majority of drivers receive healthcare from other sources, often from a full-time job.”)

Some workers could also earn paid sick time, paid family and medical leave, and in lieu of worker’s compensation, benefits for medical and disability in cases of on-the-job injuries. Workers would have the ability to appeal if their accounts are deactivated, and would receive training on public safety issues.

It would also let gig companies avoid contributions to unemployment or Social Security, and deny app-based workers more robust legal protections around discrimination, including when it comes to compensation. (The Massachusetts Coalition for Independent Work said the initiative prohibits companies from discriminating against the workers on any characteristic protected by the Massachusetts Civil Rights Act, but that is not expressly stated in the initiative’s language.)

“Things aren’t getting better with these gig companies, they’re getting worse. This [measure] is going to cause more and more drivers to be even more dependent on social programs that we taxpayers foot the bill for, less money going into the unemployment fund, the social security fund. We are just sick of this exploitation,” said Beth Griffith, an Uber driver and chair of the Boston Independent Drivers Guild, on a press call Tuesday organized by the Coalition to Protect Workers’ Rights. “We say ‘no’ to being a permanent sub-class of workers. This is ridiculous.”

Uber drivers win their first ever unionization deal

Shannon Liss-Riordan, a Boston-based lawyer who has challenged Uber and Lyft over worker classification through various lawsuits for more than seven years and was also on the press call, warned: “They’re going to try to get this ballot measure passed by deceiving the public into thinking that this is somehow for the benefit of the workers, but why would Uber, Lyft, DoorDash, Instacart and all these companies be putting $100 million or more behind this unless it was to benefit these companies and line their pockets?”

(Given the amount the companies spent on passing Prop 22 in California and the significance of the Massachusetts legislature, a spokesperson for the Coalition to Protect Workers’ Rights said it estimates the coalition representing the tech companies will spend upwards of $100 million on its efforts in the state. When asked how much funding is behind the measure to date, a spokesperson for the Massachusetts Coalition for Independent Work said “contribution reports are not required for some time.”)

Also on the call, Veena Dubal, a labor law professor at University of California, Hastings, and a vocal advocate for labor rights, similarly said the effort will likely rely upon confusion.

“They will continue to say ‘we are extending all of these great new perks and benefits to these workers.’ In fact, they are taking rights away from workers who really need them,” said Dubal, who noted that while the companies made promises ahead of passing the California law — including around how it would preserve flexibility for drivers — some of these have since been broken.

For example, flexibility was touted as a core need for Prop 22, with Uber introducing the ability for drivers in the state to set their own prices. But months after Prop 22 became law, Uber stopped allowing drivers to do so.

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