By Dustin Halse

27 April 2021

My opinion piece on Eureka Street.

For millions of Australians, the gig economy has brought greater convenience to our everyday lives. At any given moment, in metropolitan cities you can order that late night burger without even moving from the comfort of your own couch or secure a lift home with the click of a button. It’s a new era of what we want, whenever we want it with products and services delivered to us directly.

However, behind the slick advertising and high-tech veneer of on demand apps and services lies a bleak, hazardous and often dangerous reality: tens of thousands of people working at the fringe of the labour market as delivery riders and personal chauffeurs. When you remove all the tech, the sizzle and pop, it’s little more than modern day iteration of old-school precarious piece work arrangements.

To set the context, on a good night a delivery rider might, if lucky, earn somewhere close to the minimum wage, without accruing any employment entitlements. A 2020 report for the Victorian Government, Report of the Inquiry into the Victorian On-Demand Workforce, found that these workers are most likely to come from ‘vulnerable cohorts’ within our community: young people, students and migrants, often forced into ‘gig’ jobs as a last resort.

The COVID-19 pandemic and related lockdowns saw a surge in demand for these services and thousands of vulnerable workers found themselves thrown onto the frontline of the latest battle in the war for fair wages, safe working conditions and job security for Australia. 

But in some recent positive news, major food delivery service Menulog announced to a Senate inquiry recently that they at least agreed that gig economy workers are just that — workers — and the firm’s CEO Morten Belling announced that they would trial employing riders in Sydney’s CBD directly rather than treating them as sub-contractors.

Menulog was under pressure from riders, drivers, their union, as well as investors and regulators. They appear to have seen the writing on the wall and this pilot will extend minimum wage and superannuation rights to food delivery riders, and represents a break with other big gig economy firms like Uber and Deliveroo that refuse to treat workers as employees.

It’s a move that represents a small but significant victory for the Transport Workers Union and its members, whose campaign to grant gig economy workers employment status has gathered momentum from public outrage over the deaths of no less than five food delivery riders late last year.

It also comes as the other international jurisdictions like Spain and the United Kingdom have moved to classify gig economy workers as employees, and some investors have begun to shun food delivery services citing labour rights as a concern.

Yet Belling’s comments to the Senate inquiry show that the firm sees this as a necessary business decision rather than representing a real shift in how in how they view their workers.

'Ultimately, we want to employ couriers. However, the current regulatory framework presents a number of challenges, with specific regards to existing modern awards, the lack of flexibility they present and subsequent cost.' In other words: Menulog wants to extend basic employment protections to its riders but believe these protections should be watered down to fit the gig economy business model.

There’s a couple of things that set firms like Menulog, Uber, and Deliveroo apart from more conventional businesses, and they’re worth noting.

First, gig economy firms — especially food delivery and taxi services — often struggle to turn a profit. In 2020, Uber reported a net loss of $6.8USD billion. In fact, Uber has conceded that it may never achieve profitability. Instead, these firms churn through astonishing amounts of venture capital without ever generating a profit in the actual process of production or service delivery.

Second, these firms have significantly disrupted how we think about work organisation and service delivery. Gig economy firms like to frame these developments as ‘innovations’ that ‘disrupt’ complacent market incumbents. The reality is that these ‘innovations’ can essentially be summarised as a set of new mechanisms to bypass existing labour regulations. And the ‘disruptions’ have been to the lives of workers and small business owners in both the new and the incumbent industries.

Experience in places like California has shown us that gig economy firms will not easily allow regulatory arrangements to transfer risk back onto them and undermine the ‘innovations’ that have allowed them to bypass existing worker protections. We’ve seen companies going to extraordinary lengths not only to avoid existing labour regulations, but to re-write them to suit their business model.

In this context, Menulog’s announcement foregrounds more struggles to come: the defence of award conditions; advancing pay, conditions, and worker safety through enterprise bargaining; and the push for a return to industry wide bargaining.

When workers and their unions achieve employment status across the gig economy, the campaign to protect and extend hard fought award conditions from erosion and to extend workers’ rights through enterprise bargaining will intensify. The case study of the gig economy also lends further support to the Australian Council of Trade Union’s advocacy for return to industry wide bargaining, which would prevent gig economy firms from undercutting one another on workers’ wages and conditions.

The Victorian Labor government’s commitment to advancing the cause of workers is reflected in legislation on industrial manslaughter, criminalising wage theft, and controversially trialling a paid sick leave scheme for precariously employed workers during the pandemic.

Given the current federal government’s continued push to weaken collective bargaining and union rights to organise, we should not allow victories like the Menulog decision to be eroded to ultimately accommodate a flawed business model claiming to be ‘innovative’. When the thin veneer of technological ‘innovation’ is peeled away, all that’s left is the reality of unsafe, insecure, and poorly paid work. The opportunity to do what is necessary to protect workers and the broader community in the long term should not be missed.

Article originally published here The thin veneer of the gig economy.

Dr Dustin Halse is the State Labor Member for Ringwood in the Victorian Parliament. He has held positions in academia and the union movement prior to his election to office. Dustin has a strong interest in industrial, environmental and social welfare policy.