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Why gig work is so hard to regulate
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A delivery worker climbing the stairs
Policymakers in many nations are trying to reform the gig economy. Yet regulations have a long way to go to meet the needs of growing numbers of platform-based workers.
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Shaik Salauddin logs long hours. The 36-year-old freelance driver, who lives in the Indian state of Telangana, is also the national general secretary of the Indian Federation of App-based Transport Workers (IFAT). He spends mornings and afternoons logging and investigating issues reported by fellow drivers, then drives his own cab in the evenings.

In India, as around the world, much gig work remains unstable; the lack of traditional employment protections puts gig workers on a precarious footing. Explaining the common disadvantages of gig work, Salauddin lists “not having your pension, health insurance, paid sick leave or paid holiday covered by your employer”, as well as “minimal job security with regard to redundancy packages or dismissal notice periods”.

Gig-worker organising is at a critical moment in India. In September 2021, Salauddin and IFAT filed a petition with the Supreme Court calling, among other things, for pandemic relief for app-based transport and delivery workers, who have been struggling to stay afloat. Salauddin is hopeful that India’s millions of gig workers can mobilise to exert pressure on the Indian government. The government has already approved a law that would make gig workers eligible for social security benefits, though there’s been little progress on this since 2020.

It’s not just India where changes are afoot. In various countries, policymakers are responding to worker and consumer pressure with new legislation attempting to reform the gig economy. Yet moves remain largely reactive rather than proactive, and regulations have a long way to go in order to meet the needs of the swelling group of gig workers.

Regulators are slowly catching up

Gig work encompasses a vast range of employment types, including agency and temporary work, short-term contracts and app-based roles. Though statistics attempting to capture its scale vary wildly, it’s clear that gig work has expanded enormously in recent years. In the UK, the number of gig workers doubled between 2016 and 2021. In the US, it’s the main source of income for over 10% of workers.

Globally, the gig economy has grown very rapidly, outpacing labour regulation (Credit: Getty)

Globally, the gig economy has grown very rapidly, outpacing labour regulation (Credit: Getty)

Platform-based gig work (where people such as taxi drivers, domestic workers and translators find work through online portals) has been growing so quickly that in nearly every country where it exists, labour enforcement has been several steps behind. Some governments have been scrambling to develop laws, but have been dogged by corporate resistance and a search for loopholes. For instance, in response to Spain’s 2021 ‘Rider Law’ recategorising platform workers as employees entitled to protections, companies have tried to change their operating models so that the law doesn’t fully apply to them. 

“I think that there is going to be some kind of cat and mouse game,” comments Tatiana López, a researcher for the WZB Berlin Social Science Center and for Fairwork, an Oxford-based research project. “It’s logical that platforms that heavily rely on such a model of working with independent contractors, and shifting economic risk to these workers, will try to find ways to kind of evade responsibility of employers.” 

Overall, platform work regulation has been strongest in Europe, says López. In December, the European Union proposed a directive to improve and clarify working conditions on platforms. Traditionally, though, legislative attention has focused on ride-hailing and food delivery workers. López believes that “this is a weakness of most regulatory initiatives that we see in Europe, because they leave other platform workers – like those, for example, in the care work and domestic services sector, which is also a big sector – mostly unprotected.” 

In Germany most delivery platforms score above 5 on the Fairwork scale of 1 to 10, which rates platforms according to the research project’s five principles of fairness in pay, conditions, contracts, management and representation. This means that while there’s plenty of room for improvement, platform workers in Germany receive basic protections like sick pay. 

In contrast, in Latin America the scores tend to top out at 3. López explains that this is “because many delivery platforms there do not provide social benefits to workers; they do not provide adequate working equipment or even resting facilities for workers. Workers often have no means of getting in touch with the human representative of a platform in any way. So there’s a lot of psychological stress involved with this prospect of maybe being cut off the job at any time.” Within Latin America, however, Chile is leading on efforts to extend worker rights and protections to platform workers.

I think that there is going to be some kind of cat and mouse game – Tatiana López

In some places, any kind of governmental regulation of the gig economy is a distant hope. “This is a new kind of work, and most policymakers probably don't recognise it as work,” says Grace Natabaalo, who researches African platform economies at the advisory firm Caribou Digital. “For Africa’s case, I don’t think we’re there yet. We’re still trying to figure out unemployment, and regulation is probably going to be one of the last things on the list.” 

Platforms and consumers need to step in 

Where governments are slow to protect gig workers, pressure is mounting on gig employers to take the lead. For instance, female gig drivers in Kenya have reported safety issues doing this work. Ride-hailing platforms could improve collaboration with law enforcement, for instance, if drivers are threatened or assaulted. 

“It’s most likely going to be up to workers and their organisations and allies for now, to challenge these models again,” López says. Much of this pressure is coming from the grassroots. “Even in Europe many protests and lawsuits are initiated by new grassroots worker collectives and there is still room for greater engagement from established unions,” López says. 

Germany is a good example. When food-delivery platforms started operating there, they initially treated their workers as freelancers. But with worker protests, the involvement of German unions and workers’ councils, and heightened competition for workers, “last year the first two delivery platforms (Flink and Lieferando) have moved to a permanent contract model”, López explains. 

In the US, where labour movements have been weaker, important conversations about gig workers’ rights are taking place on online platforms like Reddit and Twitter. Shelly Steward, the director of the Aspen Institute’s Future of Work Initiative, sees these sites as “tools to organise what is often seen as a very disparate and disconnected workforce”.

Gig workers played important, public roles during the pandemic, prompting wider conversations about working conditions (Credit: Getty)

Gig workers played important, public roles during the pandemic, prompting wider conversations about working conditions (Credit: Getty)

Some gig employers are responding to the pressure with voluntary commitments to improve worker conditions. In India, a number of companies have pledged contributions to the proposed gig-worker social security fund. And Uber recently signed a voluntary memorandum of understanding with the International Transport Workers Federation to negotiate certain benefits. 

Voluntary agreements “can be a temporary solution or a very first step, but it obviously needs to be followed by stronger state regulation”, López says. One example is the Glovo Couriers Pledge, which Fairwork advised on, under which Glovo commits to paying a regional living wage and paid sick leave to couriers, among other protections. Of course, implementation and monitoring will be key. 

Company reforms often come in response to sustained pressure from customers and clients. López says, “One way of change would also be for consumers, for example, to give signals to platforms and to show platforms that actually they can benefit from implementing labour rights and labour standards.” For instance, a Berlin government department is one of the organisations that have signed the Fairwork Pledge – a public commitment to supporting fairer platform work, such as by only working with platforms that score higher on the Fairwork ratings. 

Positive momentum?

In the places where policymakers are trying to drive change, their efforts have mainly focused on worker classification: that is, whether someone should be considered a freelancer or an employee, with all the legal protections that this status would provide. This is important, but far from sufficient. Steward stresses “the need to address the broader job quality issues”. She points out that even if gig workers were classified as employees, theirs wouldn’t all be good jobs; they would still face issues of low and unpredictable earnings.  

Some US states have sought to pass laws that give workers weak, individualised benefits that are not comparable to employment, Steward adds. In California, legal challenges over Proposition 22, which exempts platforms from having to classify their gig workers as employees, are ongoing. 

Changing the legal status of gig workers could exclude the migrant workers who form such a large portion of gig workers in many countries, however. As López puts it, there’s a risk of leaving “the most vulnerable migrants unprotected; they might not have a formal work permit or a formal registration in the country”. Some gig workers are bound to remain freelancers, whether by choice or by necessity. So overall, López argues, “regulations should be more comprehensive in the sense of also thinking about those workers that will continue to be self-employed”, for instance regarding access to accident insurance and sick pay. 

Before Covid-19, moves to better regulate gig work were underway but, as Natabaalo says, “the pandemic brought the gig economy to the fore”. Certain kinds of gig workers became more visible and relied-upon, even as inequalities deepened. Gig workers’ income fluctuated more than traditional workers’ during the pandemic, and only some frontline gig workers could afford to step away from this work due to health concerns. 

Experts hope the pandemic’s uncertainties have sparked a reckoning over dignified and just working conditions. Building on such momentum, for instance, early in 2021 the UK Supreme Court upheld an earlier ruling about Uber drivers being employees. And late in 2021, the EU directive on platform work was proposed. If it passes in its current form, López believes “there is a good chance” that more delivery platforms in other European countries will offer regular employment to workers, giving them access to basic social protections. (Significantly, however, the directive does not establish collective bargaining rights for platform workers.) 

Steward is among those hoping for progress at this critical juncture. When it comes to improving the quality of gig jobs, she says she’s “cautiously optimistic that we will see some changes”.