'Tonight, I’ll be eating spaghetti carbonara with fried onions and diced pancetta from Luigi’s Mansion in Fremantle. Ding-dong!’
Everybody has seen at least one of these spots for Uber Eats on TV. My favourite is Boy George’s, I laugh every time. The hand you see handing over the food at the end of the commercial belongs to one of Uber’s delivery drivers. Uber calls them their ‘partners’ (understand employees with no social benefits). This delivery driver is a worker of the gig economy.
Disclaimer here: I already picked on Uber in my second blog post Lessons we can learn from Blade Runner 2049. I’m using the example of Uber again because of the abundance of information available about the company. Unfortunately, most of it came to light following the numerous scandals Uber got themselves into.
What is the gig economy and how does it work?
The gig economy refers to a type of employment based on a succession of short-term contracts or projects. Most industries have been affected by it: transport, healthcare, hospitality, professional services, and even the public sector. Online platforms such as Uber, Airtasker or Airbnb have been a massive hit with consumers. And for good reasons. They're cheap, convenient and easy to use.
The main appeal of the gig economy is the false promise of flexibility. ‘Be your own boss’, ‘work when you want, as much as you want’, ‘unlimited earning potential’ blah blah blah. The 'flexibility' really is for the employer, not the worker. I got lured into this myself when I started working as a personal trainer in a big gym. But this story is for another day.
Uber's business model is an abomination
Most people probably ignore how Uber manages to offer transportation services so much cheaper than taxis. Uber’s business model relies on cutting costs and exploiting taxation loopholes as much as they can in order to slash their prices and kill all competition. All the risks and running costs are passed onto the drivers, who are hired as subcontractors.
Because gig workers are considered self-employed, they are not entitled to social benefits such as holiday or sick leave and superannuation. Workers are paid per ‘gig’, or job, no matter how long it takes them to do the task. Unions representation is a problem too, as the status of gig workers is a grey area that needs to be clearly defined.
On a platform like Airtasker, workers bid against each other to get jobs, most of the time based on the cost of the service provided. Which as a result brings the cost of labour significantly down as most of the time whoever is the cheapest gets the job. The result of this race to the bottom is that it keeps wages down.
Back to the future
Uber started to operate in Australia in late 2012 without any licence. To make things worse, thanks to a clever tax scheme, Uber is paying virtually no taxes in Australia. In 2015, Uber was legalised in all states except Northern Territory (it happened last year), and the Australian Taxation Office decided that all drivers should pay GST from the first dollar they earn. For the sake of comparison, if you had started your own business in 2012 without any licence and had paid the same amount of taxes that Uber did, you'd most likely be in prison by 2015. This is called a double standard.
Where the gig economy has been the most disruptive is in going backwards on decades of struggle for fair wages and workers’ rights and entitlements. An increasing number of companies are hiring people on a subcontractor employment basis so they don’t have to pay for entitlements such as holiday leave or superannuation. The gig economy is here and it's here to stay.
The government turned a blind eye because Uber was ‘creating’ jobs. Insecure and underpaid jobs. One of the government’s roles is to set the rules for its economy and to ensure workers are treated fairly. By failing to respond to the changes happening to the work place, the government is responsible for the precarious situation so many workers find themselves in.
Between the gig economy and the casualisation of work, full-time employment and the benefits that go with it may one day be a thing of the past. Ask yourself if this is what you want for your kids when they grow up. Remember that when you take an Uber or when you order food through Uber Eats, you are supporting their exploitative practices with your own money. So tonight, after you've read the usual bedtime story, tell your kids to start saving for retirement right now. Just in case.