A green light for the gig economy gold miners is not a red light for workers' rights...

Not since Chopper Gate have the social media outrage merchants been so excited. Revelations that Susan Ley effectively commuted between her Canberra work and a rolling Gold Coast party for the past few years has again led to tired ravings about the excesses of politicians. As ever, calls come from far and wide for a return to a time where ethics in public office meant something. We are again told by the mass media that we all want honest politicians, true to their core values. Yawn.

I know it’s not very “zeitgeisty” of me, but I am much more disappointed and offended by Daniel Andrews catching an Uber than Bronwyn Bishop catching a chopper or Minister Ley’s apartment purchase. Sounds strange I know, but stick with me for a bit and you will see what I’m talking about.

The Andrews Government is a well-intentioned lot. As it enters the second half of what promises to be the first of at least two terms in Office, it has shown itself to be genuinely progressive, economically and socially. It is doing what State Governments should do, and it is doing it well.

The Government has an economic plan that is working, it is rolling out a public infrastructure program to address both current and future transport and social infrastructure needs of Victorians and has backed positive social rhetoric with meaningful funding increases to address family violence and community safety issues. Labor is investing heavily in creating training and employment opportunities in the transitioning parts of the economy, particularly manufacturing and energy production in places like Geelong and the Latrobe Valley. It has shown leadership amongst its interstate peers on issues relating to the environment, education, same sex marriage and voluntary euthanasia. It has shown a willingness to embrace the future, explore the economic opportunities, new energy types, new markets and new economic players.

The Andrews Government’s rhetoric is regularly infused with Labor principles. It is fond of invoking old fashioned ALP values of equity and opportunity, respect and fairness. It’s a Government that projects itself as one which hunts the Labor Holy Grail, that dopamine and economic growth inducing Labor sweet spot where equality, economic opportunity and new economy innovation deliver social cohesion; and where hard work and fair employment conditions are the catalysts for justice and equity. So the Andrews Government is a progressive, values based Government, its pathway illuminated by the unfading glow from the beacon of its Labor light on the hill?

Yeah, sort of. And sometimes. But not always.

Sometimes, like now, it appears confused, and the pathway seems more dimly lit. Sometimes, rather than acting in symphonic harmony, all these lofty notions become jumbled, jarring and crashing, sounding a wincing note of discord.

As it grapples with ridesharing regulation, the disharmony is becoming ear piercing. The Andrews Government is currently in the process of developing a comprehensive regulatory framework for ridesharing. You know, the hard bit that starts when the media announcements stop.

In doing so it is walking into a minefield of competing priorities and values, and its cohesion is being sorely tested. How do contemporary Labor values of innovation, diversification and economic agility align with traditional Labor values of fair work, equity and workplace safety?

It is hard. It is a new market, and there is no template regulation to follow. Uber have been let tap a vein of unregulated gold for several years now, dodging the regulatory constraints and costs that add lead to the saddlebags of market incumbents - their competitors. An unhandicapped runner in a handicap event is always going to win.

Seemingly blind to the realities of the looming and inevitable regulatory correction – the imminent intervention of the handicapper - others are seeking to exploit the current regulatory lag period, trying to cash in on the fact that regulators around the globe have been slower to make the rules than the players have been at beating them. It’s regulatory opportunism that is unethical, unconscionable, and, is a form of regulatory looting.

Caught in a kind o, no rules apply, reckless frontier type gig economy euphoria – which is part Gold Rush, part LA riots - app developers are “jumping out of trees” with ideas for all manner of boutique ridesharing services. The marketplace will soon be lousy with ridesharing providers offering consumers seemingly bottomless choice - from the gender of the driver to the colour of the car (maybe the colour of the driver will also be on the consumer choice menu in this interim Wild West period). Gimmicks, Give-Aways and Facebook Campaigns form the currency of the - soon to be - frenetic competition.

Unfortunately for the sweated labour that are the catalytic converters of the new economy engine, the ones turning the apps into the bullion, none of the new market gold diggers are seeking to differentiate themselves from the scrum by offering minimum wages or fair work conditions. Funny that.

Victorian Transport Minister Jacinta Allen and Premier Andrews were joyfully proclaiming how uba cool Victoria was when it announced in October last year that it was officially welcoming the rideshare industry to Victoria. It will be “revolutionary” we were told, and we will be all so contemporary and hip. Consumer choice will be King, let’s all sing kumbaya blah blah…

But now is when the rubber hits the road, and cutesy ideas need to be turned into a safe and effective road transport system. The Government is only now looking beyond the hype at just how is it going to make all this work. Just how best do regulators accommodate this new and emerging industry while protecting workers’ rights? How does the Government create a market environment that waves in new market entrants – and gives consumers more choice - without sweeping away 150 years of hard won rights and protections for workers?

Gig economy is a term given to the workforce in which someone is hired, usually through a digital marketplace, to work on demand, for a short-term engagement.

Ridesharing is probably the best known of the “gig” economy markets, but the markets for things like home cleaning services (Whizz), accommodation services (Airbnb), and general and professional services (Airtasker) are also being gigged up.

In ridesharing, there is not really much sharing going on, at least not with the workers who generate the profits. In fact, in terms of workers’ rights, the ridesharing industry as it is currently set up is nothing less than embedded sham contracting that sets workers’ rights back more than 100 years. It is a model in which workers are classified (by no authority, just because that’s what Uber and co have been able to get away with) by the facilitating companies as independent contractors and are not afforded any employment protections or minimum standards in the performance of their work.

So the worker (or “contractor” as Uber and co would argue) could work, let’s say upwards of 40 hours per week, receive less than minimum wage (once car expenses, fuel costs, GST, maintenance and down time are all factored in), no WorkCover insurance, no Superannuation, no Sick Leave, Maternity Leave, Penalty Rates. No anything.

“What’s that, you have worked for us for 10 years and had a bad crash at work and can’t work anymore?” – bad luck.

“You want time off to have a baby and be paid for it? No, not here love, this is the new economy stupid.

“You don’t make minimum wage?” Work harder, buy a better car, your problem.

“you want superannuation, paid leave and you want to be paid a better rate for driving drunks around and 5am on New Year’s Day”- LMAO, you’re dreaming, and btw get the spew smell out of your car or I’ll cut you off the app.

Workers, sorry, independent contractors, do get to pay 15-20% of their takings to their “employer”, but get nothing for that. The worker wears all the risk. And, because no Superannuation or other benefits are part of the deal, the taxpayer ends up footing the bill in the form of pensions.

The world is waking up to the fact that the current sham contracting ridesharing model is facilitating a massive net wealth transfer from workers and the public sector to Uber and the other ridesharing companies. And an emerging problem for the Andrews Government is that the Australian Union movement thinks so too.

In its submission to the Victorian Parliamentary Inquiry into ride Sourcing Services in August 2016, the Victorian Trades Hall Council calls on the Government to ensure workers receive minimum payment guarantees and WorkCover protection amongst other things. The VTHC points out that the status of drivers (ie: whether they are classified as employees or contractors), is untested in Australian Courts, and the Government should regulate to clarify workers’ rights.

Unions NSW is also very focussed on the issue of workers’ rights in the gig economy. In its recent publication Innovation or Exploitation – Busting the Air Tasker Myth, Unions NSW is scathing on the impacts of this type of sham contracting practices in the gig economy:

“To flagrantly disregard 150 years of labour standards is to cultivate an industrial jungle, where large tech companies can absolve themselves of responsibility in the name of innovation.”

The classification, and therefore treatment, of workers in the emerging gig economy is the international Industrial Relations frontier. It is a testing ground, and, if the UK Employment Tribunal finding of October last year is anything to go by, one in which Uber’s arguments are falling terribly short.

The UK case was brought by two drivers, James Farrar and Yaseen Aslam, on behalf of a group 19 Uber workers who argued that they were employed by the San Francisco-based firm, rather than working for themselves.

Uber argued that it was a technology firm not a transport business and that its drivers were independent self-employed contractors who could choose where and when they worked. The judges were scathing about Uber’s arguments, accusing the firm of “resorting in its documentation to fictions, twisted language and even brand new terminology” and even quoting Hamlet to suggest that the group’s UK boss was protesting too much about its position:

“The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous,” the judges said. “Drivers do not and cannot negotiate with passengers … They are offered and accept trips strictly on Uber’s terms.”

And it’s not just in the UK where gig economy workers are getting organised and fighting back against the draconian model. A model which, when stripped back, is nothing more than an app enabled version of the Great Depression era “hungry mile” where workers are reduced to endlessly tradeable commodities and discarded on a whim. In the UK, France, Italy, Germany, and from the East Coast to the West Coast of America, rideshare drivers (and a range of other “gig” economy “contractors”) are protesting loudly and demanding a better deal.

It is hardly surprising that the millions of gig economy workers around the world are pushing back. Workers are workers, and sham contracting is sham contracting. Whether the employer chooses to use an app as a buffer between themselves and their income generating workforce, or a Labour Hire Company to contract unskilled labourers on construction sites at below minimum conditions, it is sham contracting - and it’s not on. A model where workers can expect no protections at all, no opportunity for promotion, no training or career development and no share in the company’s success takes us all backwards.

Flexibility and innovation can be more than adequately accommodated within a regulatory framework that sets reasonable minimum pay standards and protects the rights of workers. And, if you believe the marketing hype, there are big profits to be made by the very few at the top in this “trickle up” model. Unions NSW had a good suggestion with respect to ensuring that those profits are not made at the expense of workers. Given profits are not really profits until the workers are properly paid, Unions NSW suggested that the 15% Airtasker takes off the top of every transaction (in the same way as Uber takes 20 %) should go to funding all mandatory entitlements associated with dependent employment, including workers’ compensation insurance, superannuation and a casual loading payment in exchange for the lack of sick leave and annual leave entitlements.

The Victorian Government is being appropriately cautious and unhurried in its devising of a suitable regulatory framework for the emerging ridesharing industry. It is new territory requiring new regulatory thinking. In doing so it should listen to the best of its Union heart. It must ensure that the rules of the new economy guarantee workers are treated fairly. After all, whether the rideshare company decides to classify their drivers as employees, partners, contractors or pineapples, they are still Victorian workers and they deserve respect.

I have no expectation that old Tories like Bronnie Bishop or Susan Ley give a flying proverbial about the taxpayer as they soar above the great unwashed, much less the employment conditions of the pilot. But when young Union Dan of the common man takes a ride around our great city in an Uber, I have an expectation that he would have an expectation that in a Victoria, where workers’ rights matter and where the Labor Party is in charge, the person doing the driving receives fair pay and entitlements.

Richard McEncroe

11 January 2017

#ridesharing #gigeconomy #writeoptions #workersrights #uber