Move with the times

Move with the times

James Paterson — Daily Telegraph — 1 June, 2018


The emergence of the gig economy has provided enormous benefits to millions of Australians – but this transformative 21st-century industry is now under attack from a collection of unionists and far-left politicians.

The latest threat comes from Greens MP Adam Bandt, who recently introduced legislation that would fundamentally undermine the business models of companies including Uber and Deliveroo.

Bandt’s legislation would give the Fair Work Commission the power to impose the employment regulations contained in an award or enterprise agreement on any worker or class of workers – including independent contractors.

Extending workplace entitlements to cover new and emerging industries may sound relatively benign but it is specifically designed to undermine the business models of companies in the gig economy.

As Bandt stated when introducing the legislation: “Currently, many workers in the gig economy or nonstandard work are engaged as independent contractors, which means they are not given the rights of employees under the Fair Work Act 2009.”

The people Bandt is referring to are the 82,000 Australian Uber drivers, the 4000 Australian Deliveroo riders, and the thousands of independent contractors who are offering their skills and time through platforms such as Freelancer in areas as diverse as graphic design and home handyman services.

Bandt would have you believe these people are being deprived of basic workplace conditions by predatory multinational corporations.

This Marxist analysis may align with his world view, but it simply doesn’t fit the facts.

Companies in the gig economy don’t use independent contract arrangements to exploit workers.

They use them because they aren’t traditional employers.

They are platforms that match people who are able to provide particular skills or services with people in need of those skills or services.

People offering services on gig-economy platforms have no obligation to show up. They can set their own hours and choose when and where they work. They can even be offering services on to multiple, competing gig-economy platforms at the same time.

It’s this flexibility that is so appealing to service providers – the same service providers who Bandt thinks are being oppressed.

According to a 2017 survey, 94 per cent of Uber drivers say flexibility is the key attraction to driving on the Uber app, 80 per cent would not be able to drive on app if they had to drive fixed shifts. Similarly, 92 per cent of Deliveroo riders choose it because of the flexibility it provides.

This flexibility simply won’t be possible if gig-economy platforms are forced to provide the same wages and conditions that apply to traditional employee-employer relationships. If companies like Deliveroo are forced to treat independent contractors as employees then they couldn’t possibly allow them to start and finish work at their own convenience.

They would need to ensure their employees were generating enough revenue to justify the wage rates and cover the cost of complying with the regulations. This would require a high degree of centralised control over when and where they worked.

This would fundamentally undermine the business models of most gig economy companies. Many would be forced to close, while others would look to replace their workers through automation.

This wouldn’t just harm the millions of Australians who provide services through the gig economy.It would also deprive millions of Australian consumers of the services that these companies provide. Uber alone has over 3.6 million active riders, and Airtasker boasts an Australian community of 1.9 million members. It would also deprive society of the flow-on benefits that have come from the gig economy.

Benefits like additional jobs in the hospitality industry – according to a major study by Capital Economics, 1800 people found work in the restaurant sector as a direct consequence of Deliveroo – and benefits like safer roads – according to an analysis of eight years of US county-level data, fatal crashes declined by 17 to 40 per cent after Uber had operated in a county for four or more years.

The gig economy has produced enormous benefits for Australian society. Imposing an outdated set of regulations on this 21st century work practice will rob consumers of choice and workers of jobs. It will kill one of the most transformative business models to have emerged in recent years, all because of an outdated worldview that views employers as oppressors and workers as oppressed.

This article was originally published in the Daily Telegraph.

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