Uber: The long-overdue impetus for a new social contract?
What is your instant reaction, if you hear the words Uber and employment? Cheering or booing? Generally, opinion seems to converge around one of two conflicting viewpoints. Either you think that the platform revolution is a sly trick, where example Uber can avoid paying minimum wage and thus benefit by categorizing its drivers as independent contractors. Or you see Uber and its ilk as the beginning of a revolution in the workplace, where employees have taken back the power and can decide how to organize their workday, benefitting them in the long run.
Does the current system work?
No matter which side you are on, it is a fact that the new platforms such as Uber challenge the traditional structure of the labor market. However, which reply would we get, if we asked the question “does the current system work”? Probably not a clearcut answer, because if it was right in front of us, why do all of these lawsuits keep on popping up?
Various lawsuits circle around the same question: Are Uber drivers employees or independent contractors? In the latest ruling, the Central London Employment Tribunal decided that Uber drivers in the UK should be classified as workers and therefore by definition are entitled to minimum wage and holiday pay.
“Uber are going to have to fundamentally rethink how they operate in this country” — Jack Dromey
The UK government have committed to a solution that “works for all” but the shadow minister for labour, Jack Dromey, told the BBC that “Uber are going to have to fundamentally rethink how they operate in this country.” However, are platforms really deserving all the blame?
We tend to focus on the problem of classification, but aren’t we losing track of the development? A study from Intuit predicts that by 2020, 40% of US workers for example will be independent contractors, so does Uber just represent inevitable change?
At the moment, companies can take advantage of the different classification and the accompanying benefits, so why aren’t we looking for solutions for the future which can actually accommodate the demand for freelancing, without leaving the workforce in a precarious state without access to basic benefits?
Time to rewrite the rules
Maybe it is time to draw up a new social contract, as many of the established norms stem from a time where the world was an entirely different place. We should break away from the full-time-job-based benefits and instead make a set of mandatory universal benefits — with no different classification.
Another solution — maybe more realistic — could be a multi-employer plan, where employers split the payment of benefits, depending on how many hours the employee actually work for the company. The employee will benefit from the pooled benefits in one single account.
The ultimate goal is that the benefits become as portable and flexible as the jobs and create an equal footing for everyone; not discriminating between full-time employees and freelancers. Thereby closing the loophole.
There is always a “but” and the problem is that already existing multi-employer plans are — often — the result of collective bargaining by unions. Freelancers are often not unionized. Without a voice, Uber will continue to determine the contracts. While the traditional union is as good as dead — at least in the US — the power of the collective bargaining is still a powerful tool and while new unions for freelancers have popped up, these unions simply lack muscle to matter — yet.
We cannot prevent change, therefore it is not enough to pick a side and cheer or boo. The numbers don’t lie; change is inevitable. Instead of using the old strategy of simply making laws against new platforms; we should try to create fundamental solutions.
