The gig economy is exploitation masquerading as freedomHeat Profit
Over recent decades Britain’s industrial relations vocabulary has changed dramatically. Companies no longer lay off staff; instead they ‘downsize’ or ‘reorganise’. Workers at some firms are labelled ‘associates’ in what looks like a deliberate attempt to blur the potentially antagonistic relationship between boss and worker. ‘Freedom’ and ‘autonomy’ typically denote a paucity of employment rights.
The so-called ‘gig’ economy is awash with this language. The brainchild of Silicon Valley-based ‘disrupters’ – the intellectual progeny of libertarian hack-philosopher Ayn Rand – app-based gig work is fast becoming a fundamental part of Britain’s economic landscape. More than a million people are now working in the gig economy in Britain, and many of the jobs they do are insecure and poorly paid. The chief economist at the Bank of England has even suggested that Britain could be turning the clock back to its pre-industrial revolution days, when self-employment was widespread and there were no trade unions.
With this in mind the government last year commissioned a review of low paid work led by Matthew Taylor, a former aide to Tony Blair. With its pitch to the “left behind” classes, Theresa May’s government hoped to be viewed by voters as tough on one of the central scourges of working class life on the back of Brexit: unscrupulous bosses. As Frances O’Grady of the TUC put it last year, the Taylor Review has been the government’s “get out of jail card free” whenever it has been pressed on workers’ rights.
The review was ultimately a disappointment. A few breath-taking insights such as the revelation that workers are “not having their rights fully respected” – imagine that! – sat alongside precisely the sort of triangulation that one might have expected from a late-Blair era advisor. The review’s recommendations, had they been adopted, may even have made things worse for workers with their proposals for a new employment category of ‘dependent contractor’ – a policy which would have introduced a fresh hurdle for those who had won tribunal cases by removing their right to a guaranteed minimum wage.
It is grimly appropriate that the government’s lacklustre response to this forgettable review should come in a week when the human cost of sweated labour is hitting the headlines. On Monday it was reported that Don Lane, a driver for the parcel delivery firm DPD, died soon after being fined by the company for attending a medical appointment to treat his diabetes. Don’s widow told the Guardian that she believed her husband missed appointments with specialists because he was worried about potentially incurring a £150 daily penalty that DPD would issue if he did not find cover for his round.
Tellingly, practices like this are not illegal. DPD, along with a number of other companies, treats many of its drivers as ‘franchisees’, meaning they are not entitled to things like sick pay and holiday leave. The fines incurred through missing work because of illness come on top of the loss of around £200 in wages for every day off sick.
In its response to the recommendations of the Taylor Review the government has made several welcome proposals. It intends to give all workers the right to a payslip and it says it plans to give workers on zero hours contracts the right to demand permanent work (a policy first proposed by Ed Miliband in 2014).
Most importantly, the government has pledged to enforce existing holiday and sick pay entitlements. Yet it has given no information as to how it intends to do this, and no indication that such rules would apply to those misleadingly categorised as self-employed by gig employers. Research by Citizens Advice suggests that as many as 460,000 people in the UK could be bogusly classified as self-employed in this way.
As things stand there are few consequences for bosses who misclassify workers, and if the government’s enforcement record when it comes to the minimum wage is anything to go by then bad employers have little to fear from the Taylor Review. Sir David Metcalf, director of Labour Market Enforcement, told a DWP select committee last year that the average firm can expect an Investigation into non-payment of the minimum wage “once every 500 years”. He added that this was “hardly an incentive to comply”.
I spent several months driving for Uber for my forthcoming book Hired. The most striking thing about the experience was the gap between the gibberish churned out by the Uber ‘movement’ and the penurious reality. For all the purported autonomy and freedom to ‘be my own boss’, it was only profitable to work at certain hours of the day and we were informed categorically by Uber that we were not allowed to “pick and choose” which jobs we accepted from the app. Uber took a hefty 25 per cent commission from every job and told us we would face a “ban” from the app if we received poor customer ratings. For this purported flexibility we had given up most of our workers’ rights.
Of course, many commentators wonder why, if life in the gig economy is so tough, people do not simply quit and do something else. But it is worth reflecting on the circumstances that many people find themselves in before waxing ideologically about the magical properties of the free Market. Uber’s own data suggests that around a third of its drivers in London come from neighbourhoods with unemployment rates of more than 10 per cent.
Similarly, outside of London well-paid manual work has been replaced over recent decades with miserable jobs in call centres and distribution sheds, where much of the work on offer is insecure and temporary. According to the BBC, in parts of the north of England, Wales and Scotland there has been a notable reduction in full-time work over the past decade, with Redcar seeing an 8 per cent fall in the availability of full-time work.
It all adds up to a double-pronged attack on working people. The financial crisis of 2008, set in motion by a paucity of banking regulation, prompted an unforgiving attack on the state by ideologues who sought to blame it for the crash. The subsequent rise of the gig economy is a comparable assault on hard-won worker entitlements for the sake of bigger margins. It has been estimated that relying on independent contractors rather than employees can lower direct operating costs for businesses by as much as 25 per cent.
This means that multi-million-pound firms are, as it were, offloading business risk onto some of the poorest people in Britain. It is exploitation masquerading as autonomy – a new form of bondage carefully shrouded in a hip and euphemistic vernacular. The government’s ineffectual response is characteristic of its approach to so much else: because it is unwilling to upset vested interests it has little to offer workers beyond platitudinous hot air.
James Bloodworth is former editor of Left Foot Forward, one of the UK’s top political blogs, and the author of The Myth of Meritocracy.