New business models for the Gig Economy
The gig economy has made many services way cheaper and easier to access for everyone, but in absence of a proper regulation it risks shifting the clock of workers' rights back by decades.
The solution to the problem isn't that easy anyway: how to consider a worker who has indeed more freedom than a normal full-time employee, but who's still an essential component for the operations of a company?
Uber's answer has been quite clear:
"We believe that Drivers are independent contractors because, among other things, they can choose whether, when, and where to provide services on our platform, are free to provide services on our competitors' platforms, and provide a vehicle to perform services on our platform".
True, but for many of them Uber isn't a spare-time activity. For many Uber (or Lyft, or Deliveroo etc.) is a primary source of income, as they spend hours every day providing their services to the platform. Not guaranteeing those workers with the same rights guaranteed to any full-time employee (a pension scheme, paid leaves, sickness leaves, extra pay for over time work etc.) is a serious slap in the face of all the battles workers have fought in the last century. Moreover, a free contractor (e.g. a consultant or a cleaning firm) is traditionally a professional figure that supports your business, but it can't be a vital component for your business to operate. If free contractors are instead the CORE of your business, then we must agree on a different way to label them.
True, not all of them spend at least 8 hours a day on the platform like a regular full-time employee would do. But here's my two cents for these gig economy companies to provide workers with more rights while still being profitable:
1. Recognize the figure of the full-time contractor. Such a contractor will have to work 35-40 hours a week, won't be able to work for competitors while the contract is effective, will be subject to performance evaluations and to all the constraints a regular employee is subject to. In change, he/she will have right to paid leaves, sickness leaves, lunch/dinner breaks, pension schemes, and might also be made more loyal to the company by being rewarded with stock schemes if he/she is highly performing and has worked for the company for a few years.
2. Draw clear boundary lines between the workers in the category above and the free contractors. Not everyone will be happy to be subject to the constraints of a full-time contract, as many still like the flexibility the gig economy provides them. Those can still be independent contractors - and, as such, they can work for competitors while working on the platform, can provide their services whenever and wherever they like, can't be required to wear any company-branded outfit (as Deliveroo contractors do), but they won't be entitled to paid leaves, pension schemes, and all the benefits provided to more stable employees. More importantly, these workers will have to be paid slightly more than regular employees, as a higher revenue compensates the benefits they aren't entitled to. This is a common practice for other types of contractors like consultants, it shouldn't be different for gig economy workers.
3. Provide workers with the flexibility to choose between these two contracting plans and to seamlessly switch from one to another.
4. Such a regulation needs to be implemented transversally through the whole gig economy and enforced by the legislator. We can't expect companies to come up with such solutions on their own. And no company can be forced alone to comply, as that would just provide a strategic advantage to competitors.
5. Higher labour costs are likely to be charged to the end customer, but all in all that should be fine. Especially if all the companies are required to comply, and especially if the new business model can be designed in a way that is still cheaper than the old alternatives. The unregulated low-cost high-profit anarchy we've been experiencing in these years has allowed small startups to grow into massive giants in virtually no time, but that should be considered as an exception before legislators understood the new scenario and caught up, not the new normal. Moreover, a fairer contracting scheme is likely to empower the offer, while keeping in business only those who can afford to pay their workers fairly - and that's something that should definitely play in the interests of the gig economy giants on the long run.
