tag:theconversation.com,2011:/us/topics/foodora-51205/articlesFoodora – The Conversation2022-04-21T17:59:28Ztag:theconversation.com,2011:article/1816302022-04-21T17:59:28Z2022-04-21T17:59:28ZPunishment of Deliveroo by French court is a blow to the platform’s business model<figure><img src="https://images.theconversation.com/files/458847/original/file-20220420-25-qmtrg0.jpg?ixlib=rb-1.1.0&rect=9%2C3%2C1024%2C668&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Bike delivery people from the Deliveroo food delivery service gather for a demonstration at Place de la République in Paris in August 2017.</span> <span class="attribution"><span class="source">Jacques Demarthon/AFP</span></span></figcaption></figure><p>When the gavel came down, the verdict of the first criminal trial targeting “uberization” in France was unambiguous. The court in Paris recognised the French branch of the London-based company Deliveroo wrongly classified riders who should have been considered employees as independent workers. Found guilty of “systemic concealment” of jobs, the firm was <a href="https://www.rfi.fr/en/france/20220419-deliveroo-in-france-ordered-to-pay-fine-for-not-declaring-gig-economy-workers">fined 375,000 euros</a> – the maximum demanded by the prosecutor – and two former executives received one-year suspended prison sentences. Another executive was fined 10,000 euros for “complicity” in the scheme, and five labour unions who were plaintiffs in the case received 50,000 euros each.</p>
<p>It follows on the heels of the company’s loss in <a href="https://www.france24.com/en/20200207-france-faults-deliveroo-in-undeclared-work-lawsuit">February 2020</a>, when a judge ruled that Deliveroo was guilty of “skirting labour laws” and ordered them to pay 30,000 euros in damages to a delivery man.</p>
<p>The new ruling is a body blow to Deliveroo’s business model, in particular because it revealed how the company platform controlled workers. Testimony showed the existence of direct worker management by the platform’s algorithms and thus a subordinate relationship between riders and the firm. Evidence includes the constant monitoring carried out by geolocation and collection of data on rider performance. Together, they enable control over riders’ schedules and provide access to the most profitable food-delivery slots and distance-based pricing.</p>
<p>The court also pointed out the numerous obligations imposed on the delivery riders such as wearing a uniform or the attitude to have toward the customer or the restaurant owner; these instructions were reminded by regular e-mails, training videos and “trial shifts”. To the criminal court, the evidence presented demonstrated that Deliveroo is indeed the “boss” of these food-delivery riders, and that they were thus employees.</p>
<p>More broadly, Deliveroo’s conviction is a warning to all companies that operate on the same principle, and could potentially lead to the requalification of 5.5 million platform workers identified by the European Commission as “improperly qualified as self-employed”.</p>
<p>Today’s verdict represents a reversal of the French position on platforms. During Emmanuel Macron’s five-year presidency, there were attempts to establish a specific legal regime for online-platform workers, including the 2016 <a href="https://www.rfi.fr/en/france/20161231-new-law-gives-french-workers-right-disconnect">“El Khomri law”</a>. In 2018, the introduction of “social responsibility charters” sought to offset platforms’ unilateral ability to determine pricing and working conditions or social protection and – so the thinking went – impede any workers demanding to be requalified as employees.</p>
<p>France’s Constitutional Council partially censured this measure by ruling that these charters alone cannot restrict legal power. However, the creation of a separate status for such workers has not been abandoned: in a 2020, a report titled <a href="https://www.gouvernement.fr/sites/default/files/document/document/2020/12/rapport_reguler_les_plateformes_numeriques_de_travail.pdf">“Regulating Digital Work Platforms”</a> was submitted to the prime minister to find a way to grant additional rights to workers without subjecting them to social law. In April 2021, the government <a href="https://www.vie-publique.fr/loi/279617-ordonnance-21-avril-2021-dialogue-social-livreurs-velo-vtc-plateformes">issued a ruling</a> intended to guide negotiations between workers and platforms.</p>
<p>France’s position is at odds with the European trend to recognise the existence of an employment relationship between delivery workers and platforms. Following more than 100 court decisions and 15 administrative rulings dealing with the status of these workers across Europe, in December 2021 the European Commission proposed introducing a principle of “presumption of salaried status”, making workers employees until proven otherwise. The five criteria are:</p>
<ul>
<li><p>unilateral setting of the level of remuneration;</p></li>
<li><p>binding rules on behaviour or performance;</p></li>
<li><p>electronic monitoring of the performance of work and work results;</p></li>
<li><p>restricted freedom to choose working hours or accept tasks;</p></li>
<li><p>restricted ability to build up a clientele or to provide services to a third party.</p></li>
</ul>
<p>Platforms may contest workers being requalified as employees, but they will have to prove that there is no employment relationship between them and the workers.</p>
<p>Are we witnessing the end of “uberisation”? On the one hand, the algorithmic management used by the platforms is surprisingly flexible – they have already reacted to past legal outcomes by modifying their terms and conditions. For example, at Deliveroo, there is no longer any trace of slot reservation, “trial shift” or an obligation to wear a uniform.</p>
<p>It thus remains to be seen if the platforms’ new work organisations truly meet the five criteria established by the European Commission for true worker independence, or if they evolve toward an even more pernicious system.</p>
<p>We should not forget that platforms are constantly looking to negotiate regulations that are favourable to them and ensure the sustainability of their model. Remember how Uber, Lyft and other platforms tried to bury California’s AB5 law, which granted social rights to platform workers. Seeking to put the issue before voters, the companies drafted and spent nearly $200 million to push through <a href="https://www.theguardian.com/commentisfree/2020/nov/12/uber-prop-22-law-drivers-ab5-gig-workers">“Proposition 22”</a>. While there were modest commitments on wages, health benefits and worker compensation insurance, the price for platform workers was steep.</p>
<p>Before being transposed into national legislation, the European Commission’s directive must still be approved by the Council of the EU, chaired by France until July 2022. However, overshadowed by the war in Ukraine and concerns about purchasing power, labour law issues are not high on the government’s agenda, no matter who is in the presidential palace. No doubt there is still a long way to go.</p><img src="https://counter.theconversation.com/content/181630/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sophia Galière ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.</span></em></p>A trial in France revealed how the platform’s algorithm established a subordination relationship between riders and the firm. Could we be witnessing the beginning of the end of “uberisation”?Sophia Galière, Maîtresse de conférences en sciences de gestion, Université Côte d’AzurLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1644752021-08-04T18:42:46Z2021-08-04T18:42:46ZThe advantages of unionization are obvious, so why don’t more workers join unions?<figure><img src="https://images.theconversation.com/files/414615/original/file-20210804-17-11xdoqh.jpg?ixlib=rb-1.1.0&rect=21%2C32%2C3535%2C2586&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Thousands of teachers from the Peel District School Board hold a one-day strike in Mississauga, Ont., in February 2020.</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Nathan Denette </span></span></figcaption></figure><p>It’s well established that unionized workers earn <a href="https://pressprogress.ca/why_joining_a_union_could_mean_a_big_raise_for_canadians/">better wages</a> and have better benefits than their non-union counterparts. Unionized workers also experienced much greater levels of <a href="https://labourstudies.mcmaster.ca/research/impact-of-covid-19/labour-market-employment-covid">job security</a> during the COVID-19 pandemic. But if the advantages of union membership are so obvious, why are <a href="https://www.canada.ca/en/employment-social-development/services/collective-bargaining-data/reports/union-coverage.html">fewer than one in three</a> workers in Canada unionized?</p>
<p>While there’s no consensus about which factors are most likely to sway support for unionization, dissatisfaction with working conditions and the desire for dignity and voice at work <a href="https://www.usw.ca/join/why">are often cited</a> as key reasons why workers seek out unions. </p>
<p>Wanting a union and securing a union, however, are two very different things. That’s because there are enduring obstacles to unionization that make it incredibly difficult for workers to turn their initial support for the idea of a union into reality.</p>
<h2>Barriers to unionization</h2>
<p>Labour laws play a fundamental role in either helping or impeding unionization. For example, independent contractors and the self-employed are <a href="https://cirhr.library.utoronto.ca/sites/default/public/research-projects/Lynk-11-Exclusions%20Under%20LRA.pdf">legally excluded from union membership</a> in Canada and, in many provinces, so are agricultural and domestic workers. For workers who can legally unionize, provincial governments — under pressure from the business community — have generally made it <a href="https://doi.org/10.1177%2F0309816818815262">more difficult</a> to exercise that right in recent decades. </p>
<p>Employers intent on resisting unionization frequently exploit loopholes in labour law to build opposition to unions within their own workforces. While many union avoidance tactics are illegal, employers are often less fearful of the penalties they may face for engaging in “union-busting” activities than of the consequences of unionization. </p>
<figure class="align-center ">
<img alt="A banner outside an Amazon facility encourages workers to vote for unionization." src="https://images.theconversation.com/files/414620/original/file-20210804-25-bqvo8i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/414620/original/file-20210804-25-bqvo8i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=405&fit=crop&dpr=1 600w, https://images.theconversation.com/files/414620/original/file-20210804-25-bqvo8i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=405&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/414620/original/file-20210804-25-bqvo8i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=405&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/414620/original/file-20210804-25-bqvo8i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=509&fit=crop&dpr=1 754w, https://images.theconversation.com/files/414620/original/file-20210804-25-bqvo8i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=509&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/414620/original/file-20210804-25-bqvo8i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=509&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Amazon fought hard against a unionization push, which was ultimately unsuccessful.</span>
<span class="attribution"><span class="source">(AP Photo/Jay Reeves)</span></span>
</figcaption>
</figure>
<p>Union avoidance is a multi-million dollar business. Lawyers and consultants <a href="https://www.vox.com/recode/2020/10/6/21502639/amazon-union-busting-tracking-memo-spoc">devise strategies</a> for managers to maintain union-free workplaces. These strategies can include active intimidation and surveillance of union supporters, exploiting divisions within the workforce to stir up opposition to the union or spreading misinformation about the implications of unionization. </p>
<p>These common union avoidance strategies are difficult to overcome, especially given the power imbalance between employers and workers.</p>
<h2>Union substitution, suppression</h2>
<p>Effective anti-union campaigns often rely on a combination of union substitution and union suppression. </p>
<p>Union substitution techniques are the carrots designed to increase worker loyalty to the employer, thus making employees less likely to identify with the union. Some non-union companies operating in highly unionized sectors try to keep wages and working conditions in line with those of unionized workers <a href="https://www.cbc.ca/news/business/steelworkers-drop-bid-to-unionize-hamilton-s-dofasco-1.737233">in an effort to dissuade</a> their own workforces from considering a union.</p>
<p>If union substitution represents the carrot, <a href="https://www.epi.org/publication/fear-at-work-how-employers-scare-workers-out-of-unionizing/">union suppression techniques</a> are the stick. Union suppression seeks to plant anti-union seeds of doubt in workers’ minds and play on fears that unionization might result in job loss. Suppression techniques often include targeting pro-union employees for discipline and dismissal. </p>
<p>In recent years, <a href="https://www.theguardian.com/sustainable-business/target-anti-union-video-cheesy-but-effective">retail giants Target</a> and <a href="https://vancouversun.com/news/staff-blogs/anti-union-home-depot-video-mandatory-viewing-for-employees/">Home Depot</a> had their slick anti-union videos leaked on social media, providing insight into how much money and effort employers are willing to pour into such initiatives. </p>
<p>Walmart, meantime, uses a “<a href="https://www.chicagoreader.com/chicago/chicago-walmart-low-wages-unions/Content?oid=2043233">Union Probability Index</a>” to monitor employee behaviour and morale. If a store’s index gets high enough, head office sends teams into the store to ensure it remains union-free. And, as we saw in the cases of <a href="https://thewalrus.ca/walmart-has-everything-except-unions/">Walmart in Jonquière</a>, Que., and <a href="https://www.cbc.ca/news/business/foodora-canada-closing-may-1.5546642">Foodora in Ontario</a>, some companies will shut down outlets or operations rather than tolerate a union. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/despite-foodora-ruling-app-based-workers-face-uphill-union-battle-132744">Despite Foodora ruling, app-based workers face uphill union battle</a>
</strong>
</em>
</p>
<hr>
<h2>Shortage of unions</h2>
<p>Despite these aggressive union avoidance tactics, <a href="https://www.huffingtonpost.ca/2013/12/20/unions-canada-poll_n_4479321.html">public opinion polls</a> indicate that, if given the choice, many non-union workers would opt to unionize. </p>
<p>However, many of these workers, particularly those concentrated in relatively small workplaces in the private sector, simply can’t find a union willing to organize them. Organizing small workplaces is generally cost-prohibitive for unions and rarely results in broader bargaining power for workers in a particular sector.</p>
<p>Union supply problems explain why we’re <a href="https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1410013201">more likely</a> to see unions in large workplaces with more than 500 employees than in smaller workplaces with fewer than 20 employees. </p>
<figure class="align-center ">
<img alt="Striking workers hold signs as one speaks into a megaphone." src="https://images.theconversation.com/files/414611/original/file-20210804-17-mufbei.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C2995%2C2124&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/414611/original/file-20210804-17-mufbei.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=431&fit=crop&dpr=1 600w, https://images.theconversation.com/files/414611/original/file-20210804-17-mufbei.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=431&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/414611/original/file-20210804-17-mufbei.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=431&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/414611/original/file-20210804-17-mufbei.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=542&fit=crop&dpr=1 754w, https://images.theconversation.com/files/414611/original/file-20210804-17-mufbei.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=542&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/414611/original/file-20210804-17-mufbei.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=542&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Swissport employees protest outside Pierre Elliott Trudeau Airport in Montréal in December 2019. About 108 workers who are responsible for refuelling planes walked off the job.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Graham Hughes</span></span>
</figcaption>
</figure>
<p>The lack of union supply, labour relations power dynamics and the union avoidance strategies of employers all work together to dissuade workers from exercising their right to unionize. </p>
<p>This outcome isn’t accidental. It’s <a href="https://irpp.org/research-studies/can-labour-relations-reform-reduce-wage-inequality/">no coincidence</a> that the rate of unionization has fallen in conjunction with the passage of anti-union labour law reforms in most provinces. Those reforms have made it more difficult for workers to exercise their legal right to unionize and easier for employers to interfere in union-organizing campaigns. </p>
<h2>What’s ahead?</h2>
<p>Governments could certainly change labour laws to facilitate unionization and crack down on employers engaging in union avoidance activities. </p>
<p>Many of the proposals contained in the former Ontario Liberal government’s now shelved <a href="https://www.ontario.ca/document/changing-workplaces-review-final-report">Changing Workplaces Review</a> could provide a road map for offering workers the necessary tools to exercise their rights more meaningfully, including a framework for broader based bargaining that would help workers in small workplaces. </p>
<p>Given growing levels of social and economic inequality in the wake of the COVID-19 pandemic, the need to facilitate unionization is more urgent than ever.</p><img src="https://counter.theconversation.com/content/164475/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephanie Ross receives funding from the Social Sciences and Humanities Research Council.</span></em></p><p class="fine-print"><em><span>Larry Savage receives funding from the Social Sciences and Humanities Research Council.</span></em></p>Wanting a union and securing a union are two very different things. That’s because there are enduring obstacles to unionization that make it incredibly difficult for workers to unionize.Stephanie Ross, Associate Professor and Director, School of Labour Studies, McMaster UniversityLarry Savage, Professor, Labour Studies, Brock UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1516312020-12-16T18:42:48Z2020-12-16T18:42:48ZCapping food delivery app fees could save restaurants this COVID-19 winter<figure><img src="https://images.theconversation.com/files/375235/original/file-20201215-13-111j58i.jpg?ixlib=rb-1.1.0&rect=474%2C0%2C2694%2C2549&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">An Uber Eats courier pick ups an order for delivery from a restaurant in Toronto. </span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Nathan Denette</span></span></figcaption></figure><p>The COVID-19 pandemic has been <a href="https://www.forbes.com/sites/lesliewu/2020/08/31/60-percent-of-canadian-restaurants-could-close-in-the-next-three-months-due-to-covid-19-says-industry-group/">extremely difficult on restaurants, and it’s not over yet</a>.</p>
<p>Infection numbers continue to rise and the weather is getting worse. Patios are no longer an option. This means that takeout and delivery have become a lifeline for restaurants. </p>
<p><a href="https://www.cbc.ca/news/business/food-delivery-apps-fees-1.5765790">But delivery apps charge significant fees for orders</a>, meaning that restaurants already challenged by reduced volumes and high costs are squeezed, often into negative margins, in an effort to access customers. </p>
<p>There have been <a href="https://www.cbc.ca/news/canada/toronto/toronto-food-service-delivery-companies-request-cap-commissions-1.5781177">calls for a reduction in the fees</a> charged by delivery apps so that restaurants can at least maintain a delivery option during the pandemic restrictions — and survive. </p>
<p>Delivery companies like Uber Eats, Skip the Dishes, Door Dash and others provide not only the delivery service, but a platform for ordering. Given the relatively small number of apps and the large number of restaurants, this means delivery apps have significant market power. That’s why there’s such competition for restaurants among the apps.</p>
<h2>Restaurants feel a need to be on the app</h2>
<p>The bigger the share of consumers, the bigger the draw for restaurants to join the app, and the more power the app has over demand. Many customers go to the app before deciding what to order, which will become an even more common occurrence if there are more restaurants to choose from on the app.</p>
<p>If restaurants aren’t on the app, they lose the opportunity to sell to that customer. </p>
<p>The majority of delivery apps aren’t making money yet, but are fighting for share to get to a point where they’re profitable. </p>
<p>Some apps charge as much as a <a href="https://www.blogto.com/eat_drink/2020/04/food-delivery-app-commission-toronto-restaurants/">30 per cent commission on food orders</a>. Most restaurants work on tight margins, and these hefty delivery app fees often mean there’s no profit left for them after they pay the delivery company. This means they get caught between a rock and a hard place in making the choice to access an app — sell nothing or sell through the app and lose money.</p>
<figure class="align-center ">
<img alt="A man looks at the Uber Eats app on his laptop" src="https://images.theconversation.com/files/375238/original/file-20201215-17-uannmg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/375238/original/file-20201215-17-uannmg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/375238/original/file-20201215-17-uannmg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/375238/original/file-20201215-17-uannmg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/375238/original/file-20201215-17-uannmg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/375238/original/file-20201215-17-uannmg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/375238/original/file-20201215-17-uannmg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Uber Eats and other food delivery apps charge up to 30 per cent on a food order.</span>
<span class="attribution"><span class="source">(Charles Deluvio/Unsplash)</span></span>
</figcaption>
</figure>
<p>Part of the problem is that the delivery companies aren’t making money either. <a href="https://www.ctvnews.ca/business/foodora-to-shut-down-in-canada-on-may-11-amid-profitability-challenges-1.4913765">Foodora actually pulled out of Canada</a> earlier this year. <a href="https://www.forbes.com/sites/andriacheng/2020/08/06/ubers-biggest-business-is-officially-not-ride-sharing/?sh=312651b46b24">Uber Eats is a bigger business</a> than Uber Rides but is not yet profitable. Asking Uber Eats to discount fees would be asking them to lose more money in order to support the restaurants. </p>
<p>It’s also worth noting that a portion of the delivery fee goes to an independent driver, who’s also a low-wage earner. It’s estimated that <a href="https://www.ridesharingdriver.com/driving-for-ubereats-what-its-like-delivering-food-for-uber/">drivers earn approximately US$8 to $12 an hour</a>, after car expenses, delivering for Uber Eats depending on the market and time of day. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/californias-gig-worker-battle-reveals-the-abuses-of-precarious-work-in-canada-too-149780">California's gig worker battle reveals the abuses of precarious work in Canada too</a>
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<p>That means reducing delivery app fees would take money from someone who’s already in a low-income situation.</p>
<p>The real issue is that the business model doesn’t work. </p>
<p>The pricing model doesn’t cover the costs associated with delivering. Delivery apps are trying to build the delivery market, so higher pricing slows growth. It is, however, extremely difficult to raise prices later once people develop an expectation of low delivery costs.</p>
<h2>Now may be the time to raise prices</h2>
<p>Nonetheless it might be worthwhile now to begin building a sustainable pricing model in increments. The value associated with delivery has never been higher, given the reticence to eat in restaurants during the pandemic. It makes sense to start moving prices up slowly to reflect the real cost of these services.</p>
<p>There’s also merit to the idea of app companies and delivery drivers sharing some of the pandemic pain with restaurants. The delivery app model requires restaurants to succeed, after all — without them there is nothing to deliver.</p>
<p>Delivery <a href="https://www.globenewswire.com/news-release/2020/04/30/2025097/0/en/Food-Delivery-Services-See-a-Surge-in-Demand-due-to-Coronavirus-Outbreak-as-Consumers-Stay-at-Home.html">demand has been increasing</a>, so attracting more customers and restaurants should be a strategic priority for these companies. Reducing delivery fees for restaurants is one way to do so.</p>
<p>There have been initiatives by delivery companies to respond to concerns raised by restaurants.</p>
<p>Skip the Dishes instituted a <a href="https://www.skipthedishes.com/coronavirus-updates/supporting-your-communities">rebate program</a> on both takeout and delivery to reduce fees during the pandemic. This helps restaurants in times of crisis, helps Skip the Dishes maintain and grow its customer base and keeps a larger variety of restaurants on the app. </p>
<p>Uber Eats has introduced a <a href="https://www.uber.com/en-CA/newsroom/uber-eats-canada-introduces-delivery-only-option-for-restaurants/">delivery-only function</a> at a reduced service charge. In this case, restaurants take the orders themselves and just use Uber Eats to deliver the food. </p>
<p>This makes sense for restaurants with loyal customers who directly contact them. It allows restaurants to use delivery services without using the app’s ordering infrastructure while delivery companies can continue to employ drivers. </p>
<figure class="align-center ">
<img alt="A man delivers pizzas to an apartment dweller." src="https://images.theconversation.com/files/375442/original/file-20201216-19-3karhv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/375442/original/file-20201216-19-3karhv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/375442/original/file-20201216-19-3karhv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/375442/original/file-20201216-19-3karhv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/375442/original/file-20201216-19-3karhv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/375442/original/file-20201216-19-3karhv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/375442/original/file-20201216-19-3karhv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Delivery-only options are now available via Uber Eats.</span>
<span class="attribution"><span class="source">(Norma Mortenson/Pexels)</span></span>
</figcaption>
</figure>
<p>Uber Eats has also introduced a <a href="https://thespoon.tech/uber-eats-new-pilot-offers-commission-free-orders-for-restaurants-with-a-catch/">zero commission for pickup orders</a>. In this case, customers order on the app and opt to pick up their meal themselves. This helps restaurants and drives traffic through the app (at a very low marginal cost) while also keeping a wider range of restaurants on the app that may not have otherwise been able to afford the delivery fees.</p>
<p>The restaurant industry needs a long-term, sustainable business model for delivery. But carefully structured and implemented short-term regulations may level the playing field and help restaurants survive this critical period. Flexibility is in everyone’s best interest.</p>
<h2>Caps proposed</h2>
<p>Ontario has proposed caps of <a href="https://news.ontario.ca/en/release/59356/province-proposes-cap-on-delivery-fees-to-support-local-restaurants">15 per cent on delivery</a> (intended to maintain the incomes of the drivers). <a href="https://www.cnbc.com/2020/05/13/nyc-city-council-votes-to-cap-app-delivery-fees-at-15percent.html">New York City</a> and other jurisdictions have already done so. This will help restaurants. </p>
<p>But — pardon the pun — there is no free lunch, and caps will cost delivery companies money. They may be forced to drop restaurants that aren’t generating volumes and are costing too much. There’s also a risk that delivery companies will leave unprofitable or more restrictive markets. That helps no one. Regulation is complex, and the outcomes don’t always reflect what the objective was. </p>
<p>A better approach may be launching delivery-only companies or <a href="https://www.cbc.ca/radio/asithappens/as-it-happens-tuesday-edition-1.5566154/why-this-toronto-restaurateur-is-creating-an-alternative-to-delivery-apps-1.5566441">delivery co-operatives</a>. </p>
<p>For most restaurants, the volume of delivery and the associated cost doesn’t justify a dedicated delivery person. The co-ordination of delivery without the ordering platform could give restaurants a more affordable choice and allow them to maintain the customer relationship. </p>
<p>Innovative thinking along these lines could results in affordable lifelines for some restaurants.</p><img src="https://counter.theconversation.com/content/151631/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael von Massow receives funding from the Ontario Ministry of Agriculture and Food to research issues in food waste and nutrition labeling for restaurant menus. He has received money from the Tim Hortons Sustainable Food Management Fund to explore consumer attitudes to antibiotic use and animal welfare. </span></em></p>Food delivery apps charge significant fees for orders, meaning restaurants already challenged by the pandemic can be squeezed into negative margins to access customers. Will cutting fees help?Michael von Massow, Associate Professor, Food Economics, University of GuelphLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1497802020-11-25T15:33:19Z2020-11-25T15:33:19ZCalifornia’s gig worker battle reveals the abuses of precarious work in Canada too<figure><img src="https://images.theconversation.com/files/371132/original/file-20201124-23-m37fys.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C6000%2C3889&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">In this August 2020 photo, travellers request an Uber ride at Los Angeles International Airport.</span> <span class="attribution"><span class="source">(AP Photo/Damian Dovarganes)</span></span></figcaption></figure><p>Much of the focus during and after election night in the United States has centred on <a href="https://www.economist.com/united-states/2020/11/21/donald-trumps-refusal-to-concede-is-harming-america">Donald Trump’s refusal to concede defeat</a> and the makeup of Congress. </p>
<p>Yet Nov. 3 also saw many states vote directly on specific policies. For progressives, the results of these contests were mixed. </p>
<p>Voters in some states opted to <a href="https://www.nbcnews.com/think/opinion/2020-election-results-prove-america-s-war-drugs-finally-ending-ncna1247141">decriminalize drug</a>, and Floridians voted to raise the state <a href="https://www.vox.com/policy-and-politics/2020/11/5/21549857/florida-minimum-wage-amendment-2">minimum wage</a> to $15 per hour. However, in California, several ballot initiatives resulted in significant defeats for the left. </p>
<p>Chief among them was <a href="https://voterguide.sos.ca.gov/propositions/22/">Proposition 22</a>, which <a href="https://www.nytimes.com/interactive/2020/11/03/us/elections/results-california-proposition-22-define-app-based-drivers-as-contractors.html">passed</a> with 55.8 per cent of the vote. </p>
<p>This new law allows technology companies such as Uber and Lyft to continue to classify their gig workers as independent contractors rather than employees.</p>
<h2>The back story</h2>
<p>A coalition of Silicon Valley companies launched the “<a href="https://yeson22.com/get-the-facts/">Yes on 22</a>” ballot campaign in response to recent moves by both the judiciary and legislature in California to expand the legal definition of employment. </p>
<p>In <a href="https://scocal.stanford.edu/opinion/dynamex-operations-west-inc-v-superior-court-34584">the Dynamex</a> case of 2018, the California Supreme Court clarified the legal test for determining an employment relationship. This test limited when an employer can classify a worker as an independent contractor to instances where: </p>
<ol>
<li><p>The worker is free to perform services without the control or direction of the company;</p></li>
<li><p>The worker is performing tasks outside the company’s usual activities; and </p></li>
<li><p>The worker is engaged in an independently established trade, occupation or business. </p></li>
</ol>
<p>It was certain app-based companies could not meet these criteria. </p>
<p>The legislature then passed <a href="https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB5">Assembly Bill 5</a> in January 2020, which included the above method for determining employment status and aimed to stop what is broadly considered to be the misclassification of app-based workers as independent contractors. </p>
<p>The state’s new broader interpretation of employment was meant to give app-based and other contract workers access to labour standards protections, such as the minimum wage, as well as other social benefits currently denied to them, such as unemployment insurance and workers compensation. However, the legislation did not grant gig workers <a href="https://www.epi.org/publication/how-californias-ab5-protects-workers-from-misclassification/">the ability to form unions</a>. </p>
<h2>The Proposition 22 campaign</h2>
<p>“Yes on 22” proved to be the most <a href="https://ballotpedia.org/What_were_the_most_expensive_ballot_measures_in_California">well-funded</a> ballot initiative in California’s history. Tech companies spent well over US$200 million on advertising, political contributions and public relations firms’ services. The coalition opposed to Proposition 22, led by labour movement organizations, came nowhere near this total, <a href="https://www.jacobinmag.com/2020/11/proposition-22-california-uber-lyft-gig-employee">managing to raise</a> around $20 million. </p>
<p>Since 2018, tech companies had been publicly voicing their objections to the Dynamex decision and California’s Assembly Bill 5, with some <a href="https://www.nytimes.com/2020/08/20/technology/uber-lyft-california-shutdown.html">threatening to leave</a> California if Proposition 22 was unsuccessful. During the “Yes on 22” campaign, gig companies additionally engaged in highly <a href="https://www.kqed.org/news/11842964/gig-companies-are-making-their-workers-promote-prop-22">questionable tactics</a>, such as requiring both drivers and customers to indicate support for the ballot initiative before using the app. </p>
<p>So while Assembly Bill 5 is the law of the land for other employers, Proposition 22 exempts the tech giants by setting separate labour standards for app-based workers. </p>
<h2>Consequences for tech workers</h2>
<p><a href="https://drivers.yeson22.com/get-the-facts/?ref=main">The companies argue</a> that Proposition 22 will benefit workers by maintaining the supposed flexibility of app-based work while also providing new, modest benefits. </p>
<p>For example, Proposition 22 includes a provision ensuring workers receive 120 per cent of the state minimum wage in California. However, this calculation is only made on the basis of engaged driving time. Because much of gig work is spent waiting for jobs through the app, income insecurity will remain a considerable problem. </p>
<figure class="align-center ">
<img alt="Two people hold up a sign decrying low wages for Uber drivers on a city street." src="https://images.theconversation.com/files/371138/original/file-20201124-15-1srgr70.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/371138/original/file-20201124-15-1srgr70.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=379&fit=crop&dpr=1 600w, https://images.theconversation.com/files/371138/original/file-20201124-15-1srgr70.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=379&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/371138/original/file-20201124-15-1srgr70.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=379&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/371138/original/file-20201124-15-1srgr70.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=477&fit=crop&dpr=1 754w, https://images.theconversation.com/files/371138/original/file-20201124-15-1srgr70.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=477&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/371138/original/file-20201124-15-1srgr70.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=477&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Protesters stop traffic outside Uber headquarters in May 2019 in San Francisco. Drivers for ride-hailing giants Uber and Lyft turned off their apps to protest what they say are declining wages as both companies rake in billions of dollars from investors.</span>
<span class="attribution"><span class="source">(AP Photo/Eric Risberg)</span></span>
</figcaption>
</figure>
<p>Scholars at University of California, Berkeley’s Labor Center, <a href="https://laborcenter.berkeley.edu/the-uber-lyft-ballot-initiative-guarantees-only-5-64-an-hour-2/">estimate that under this arrangement</a> ride share workers will earn an average of $5.64 per hour when time between rides and vehicle costs are factored in. </p>
<p>Other benefits included in Proposition 22 dealing with health care, workers compensation and insurance are all much weaker than the protections guaranteed by traditional employment. </p>
<h2>Battles over app-based work in Canada</h2>
<p>Conflicts over the employment status of app-based workers are not unique to California. </p>
<p>After its Ontario couriers voted to unionize with the Canadian Union of Postal Workers, Foodora appealed the union certification and argued that couriers are independent contracts not entitled to unionize. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/despite-foodora-ruling-app-based-workers-face-uphill-union-battle-132744">Despite Foodora ruling, app-based workers face uphill union battle</a>
</strong>
</em>
</p>
<hr>
<p>The company then <a href="http://lawofwork.ca/cupw-alleges-that-foodora-acted-unlawfully-by-pulling-out-of-canada-heres-the-complaint/">pulled out</a> of Ontario altogether after the Ontario Labour Relations Board ruled in the union’s favour. </p>
<p>Before this decision, Foodora <a href="https://www.abc.net.au/news/2018-06-12/foodora-online-delivery-company-faces-legal-action-over-pay/9861178">left Australia</a> after that country’s Fair Work Ombudsman alleged that the company was misclassifying and underpaying its drivers. </p>
<figure class="align-center ">
<img alt="A Foodora courier with a food order on his back pushes his bicycle along a snowy street." src="https://images.theconversation.com/files/371141/original/file-20201124-15-1spx9mp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/371141/original/file-20201124-15-1spx9mp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=443&fit=crop&dpr=1 600w, https://images.theconversation.com/files/371141/original/file-20201124-15-1spx9mp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=443&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/371141/original/file-20201124-15-1spx9mp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=443&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/371141/original/file-20201124-15-1spx9mp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=557&fit=crop&dpr=1 754w, https://images.theconversation.com/files/371141/original/file-20201124-15-1spx9mp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=557&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/371141/original/file-20201124-15-1spx9mp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=557&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A Foodora courier picks up an order for delivery from a restaurant in Toronto in February 2020, shortly after the company pulled out of Ontario due to an unfavourable Labour Relations Board decision.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Nathan Denette</span></span>
</figcaption>
</figure>
<p>Uber also faces mounting pressure in Canada following <a href="https://globalnews.ca/news/7111024/supreme-court-of-canada-uber-drivers-employees/">a recent Supreme Court of Canada decision</a> allowing workers in Ontario to pursue a possible class-action lawsuit to obtain protections such as a minimum wage, vacation and overtime pay, as well as other benefits entitled to them under the Employment Standards Act. </p>
<p>At the federal level, the Liberal government <a href="https://www.labourandemploymentlaw.com/2018/12/3426/">has amended</a> the Canada Labour Code to include a “reverse onus clause” requiring federally regulated employers to prove that contractors they engage are properly classified. </p>
<p>Perhaps learning from outcomes in these other jurisdictions, the drafters of Proposition 22 included within the new law <a href="https://calmatters.org/politics/post-it/2020/10/california-amendment-threshold-proposition-22/">a rule</a> requiring seven-eighths of the California legislature to vote in favour of any future modification. The victors of the California ballot initiative have <a href="https://www.washingtonpost.com/technology/2020/11/03/uber-prop22-results-california/">now indicated</a> their plan to pursue similar measures across the United States. </p>
<h2>What’s driving the growth in app-based work?</h2>
<p>Clearly app-based companies are committed to maintaining the “independent contractor” status of their workforce. This is largely because their business model involves competing on the basis of low labour costs achieved through skirting regulations that apply to competitors, such as traditional taxi companies. </p>
<p>Another University of California, Berkeley, <a href="https://laborcenter.berkeley.edu/press-release-what-would-uber-and-lyft-owe-to-the-state-unemployment-insurance-fund/">Labor Center study</a> estimates that between 2014 and 2019, Uber and Lyft alone avoided paying as much as $413 million in unpaid wages, overtime pay, unemployment insurance contributions and other taxes in the U.S. </p>
<p>However, some contend that there are much deeper forces at play. Economic historian <a href="https://www.dissentmagazine.org/article/a-world-without-work">Aaron Benanav argues</a> that as manufacturing employment has declined and the service sector has grown, under-employment and precarious work have become endemic features of contemporary labour markets. </p>
<p>According to this theory, stubbornly slow growth rates, low productivity growth and depressed demand for labour are translating into a lack of good quality jobs. </p>
<p>Battles over employment classification and labour regulation, while important for improving app-based workers’ immediate conditions of work, ultimately won’t address the underlying dynamics contributing to the growth of gig work and other forms of precarious employment. </p>
<p>More fundamental reforms are needed to generate secure, well-compensated employment. Investment and job creation led by the public sector will be vital to addressing these issues in the future.</p><img src="https://counter.theconversation.com/content/149780/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Adam D.K. King does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Proposition 22 keeps workers for app-based companies like Uber and Lyft classified as independent contractors, but it also reveals deeper problems with contemporary labour markets.Adam D.K. King, Post-Doctoral Visitor, Department of Politics, York University, CanadaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1327442020-03-15T11:40:55Z2020-03-15T11:40:55ZDespite Foodora ruling, app-based workers face uphill union battle<figure><img src="https://images.theconversation.com/files/318774/original/file-20200305-127909-4w2veg.jpg?ixlib=rb-1.1.0&rect=0%2C59%2C3600%2C2527&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A Foodora courier is pictured picking up an order for delivery from a restaurant in Toronto in February 2020. </span> <span class="attribution"><span class="source"> THE CANADIAN PRESS/Nathan Denette</span></span></figcaption></figure><p>The Ontario Labour Relations Board recently cleared the way for couriers who work for the app-based food delivery company Foodora <a href="http://www.olrb.gov.on.ca/Decision/1346-19-R_Foodora-Inc-Feb-25-2020.pdf">to unionize</a>. </p>
<p>The couriers had filed a union certification application at the board last summer with the help of the Canadian Union of Postal Workers (CUPW). This in turn triggered a <a href="https://www.cbc.ca/news/canada/toronto/foodora-union-vote-ends-1.5244950">board-supervised union certification vote</a>. </p>
<p>Foodora objected to the application because, the company argued, its couriers were neither employees nor dependent contractors, but rather independent contractors, in business for themselves. </p>
<p>The difference in status matters because independent contractors, unlike dependent contractors or traditional employees, are
ineligible to unionize in Ontario. The ballot box was sealed, pending a board decision on the status of the couriers.</p>
<p>Six months later, the board ruled that Foodora couriers were dependent contractors eligible to unionize. The landmark ruling was celebrated as an important precedent for workers in the gig economy that could result in <a href="https://www.cupw.ca/en/historic-win-foodora-couriers-big-step-closer-union-certification">transformational change in the sector</a>. Despite winning a legal right to unionize, however, app-based workers still face an uphill battle when it comes to unionization.</p>
<h2>Obstacles to unionization</h2>
<p>The level of union membership among precariously employed workers in the service sector has always been extremely low. For example, unions are virtually non-existent in fast-food restaurants or in shopping malls, even though most of these workers have long had a legal right to unionize. </p>
<p>One reason for such low rates of unionization is that employers typically deploy a variety of union avoidance strategies <a href="https://pressprogress.ca/aw-tells-anti-union-conference-it-keeps-a-secret-watch-list-to-make-sure-workers-dont-unionize/">designed to thwart organizing efforts</a>. These usually involve coercive tactics designed to plant seeds of doubt in workers’ minds about the benefits of unionizing, and playing on workers’ fears about job security should the boss learn about their pro-union views. </p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/318776/original/file-20200305-127897-1hrucgf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/318776/original/file-20200305-127897-1hrucgf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/318776/original/file-20200305-127897-1hrucgf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/318776/original/file-20200305-127897-1hrucgf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/318776/original/file-20200305-127897-1hrucgf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/318776/original/file-20200305-127897-1hrucgf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/318776/original/file-20200305-127897-1hrucgf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/318776/original/file-20200305-127897-1hrucgf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Other app-based employers will likely do what they can to discourage their employees from joining together to unionize.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
</figcaption>
</figure>
<p>If Foodora couriers win their union once the ballots are counted, in some ways their success will unwittingly make it more — not less — difficult for similar workers to follow suit. </p>
<p>That’s because a successful campaign will almost certainly spur other app-based employers to proactively ramp up union avoidance tactics to avoid any cascading effect.</p>
<p>One particular tactic that will prove difficult for app-based workers to overcome is their employers’ ability to manipulate lists of eligible voters. </p>
<h2>Need majority support</h2>
<p>Legally, the union must demonstrate majority support among the workers who would then form the union. </p>
<p>In many Canadian jurisdictions, including Ontario, this requires two steps. The first is to get a large minority (in Ontario it is at least 40 per cent) of the workers to sign a union membership card. If successful, this paves the way for a secret ballot vote administered by the board, where 50 per cent plus one must vote “yes” to certify the union.</p>
<p>In traditional workplaces, workers regularly labour alongside the same group of employees. In such cases, it’s relatively easy for the union to determine how many workers would need to sign union cards in order to trigger a certification vote. </p>
<p>But work in the app-based gig economy is less straightforward. The number of workers on a given platform is more difficult for the union to ascertain. It is also much easier for app-based employers to game the system by stacking employee lists with people who shouldn’t be there. This can force union support below the threshold needed to trigger an election.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/318777/original/file-20200305-127932-kpd4tr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/318777/original/file-20200305-127932-kpd4tr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/318777/original/file-20200305-127932-kpd4tr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=357&fit=crop&dpr=1 600w, https://images.theconversation.com/files/318777/original/file-20200305-127932-kpd4tr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=357&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/318777/original/file-20200305-127932-kpd4tr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=357&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/318777/original/file-20200305-127932-kpd4tr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=449&fit=crop&dpr=1 754w, https://images.theconversation.com/files/318777/original/file-20200305-127932-kpd4tr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=449&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/318777/original/file-20200305-127932-kpd4tr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=449&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Workers in the gig economy can be more difficult to organize than those working in an office together every day.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
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</figure>
<p>Unions don’t have endless resources. Certification campaigns are expensive undertakings with uncertain outcomes. While organizing new members is a strategic priority for many unions, only a handful are actively organizing app-based workers. </p>
<p>Not all the app-based workers who want to unionize will be guaranteed a union that’s prepared to organize them. In Canada, a lot will depend on the outcome at Foodora and of any subsequent campaigns, all of which we can expect to be vigorously opposed by employers. </p>
<h2>Legal wrangling far from over</h2>
<p>The issue of worker classification may continue to frustrate attempts to organize app-based workers. </p>
<p>While the Ontario Labour Relations Board’s decision on the Foodora case opens the door to unionization for this specific group of workers, it does not automatically cover all app-based workers. </p>
<p>For example, the Supreme Court of Canada is expected to hand down its own ruling in the near future <a href="https://www.cbc.ca/news/business/supreme-court-uber-case-gig-economy-1.5349649">regarding the status of Uber drivers</a>. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/318778/original/file-20200305-127888-158uitw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/318778/original/file-20200305-127888-158uitw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/318778/original/file-20200305-127888-158uitw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/318778/original/file-20200305-127888-158uitw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/318778/original/file-20200305-127888-158uitw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/318778/original/file-20200305-127888-158uitw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/318778/original/file-20200305-127888-158uitw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">The Supreme Court of Canada will soon rule on the legal status of Uber drivers.</span>
<span class="attribution"><span class="source">Dan Gold/Unsplash</span></span>
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</figure>
<p>Regardless of the outcome in the Uber case, app-based employers may adjust their business operations, which could have the effect of altering the workers’ status. They may even ask governments to intervene on their behalf to deny union rights to their app-based workforces, regardless of classification. </p>
<p>App-based employers in California, for example, have launched a multi-million dollar campaign to reverse the state’s recent decision <a href="https://www.sfchronicle.com/business/article/Uber-Lyft-DoorDash-campaign-for-ballot-15090479.php">to grant employee status to app-based workers</a>. </p>
<p>Closer to home, some provincial governments, including Nova Scotia and Ontario, have moved to deny employment standards rights to <a href="https://www.sportsnet.ca/hockey/juniors/ontario-excludes-ohl-players-provincial-employment-standards/">minor hockey league players.</a> </p>
<p>In short, while Ontario’s labour board decision appears to have set an important precedent that will open the door to unionization for thousands of app-based workers, unionizing workers in the gig economy will continue to be an uphill battle.</p><img src="https://counter.theconversation.com/content/132744/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>An Ontario labour board decision to allow Foodora workers to unionize appears to have set an important precedent. But unionizing workers in the gig economy will continue to be an uphill battle.Alison Braley-Rattai, Assistant Professor, Brock UniversityLarry Savage, Professor, Brock UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1110472019-02-05T19:33:57Z2019-02-05T19:33:57ZWork in the ‘gig economy’: one-night stand or a meaningful relationship?<figure><img src="https://images.theconversation.com/files/256911/original/file-20190202-103164-1wrzx1s.jpg?ixlib=rb-1.1.0&rect=0%2C8%2C926%2C658&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The delivery riders consider that the correction of possible errors is part of their missions, even if they are not remunerated for these additional tasks.</span> <span class="attribution"><span class="source">Massimo Parisi / Shutterstock</span></span></figcaption></figure><p>In Europe and around the world, many people are delivering fast food on bicycles or acting as taxi drivers in their own cars, not quite employees and not quite self-employed. Following <a href="https://www.capital.fr/votre-carriere/uber-deliveroo-chauffeurs-et-livreurs-pourront-desormais-etre-requalifies-en-salaries-et-ca-va-plaire-a-lurssaf-1317917">recent</a> <a href="https://www.peoplemanagement.co.uk/news/articles/cautious-welcome-plans-overhaul-gig-economy-workers-rights">legal</a> <a href="https://theconversation.com/uberisation-turc-mecanique-economie-a-la-demande-ou-va-le-capitalisme-de-plateforme-64150">judgements</a> in France, the UK and in other countries, the contractual status of these “gig workers” is again being questioned. We hear of the benefits of the flexible lifestyles afforded to workers in the “gig economy” but also complaints about precariousness and exploitation.</p>
<p>While gig economy platforms might be behaving in accordance with their legal contracts, many workers appear to feel that they are not being treated fairly. Another form of contract – known as the “psychological contract” – can perhaps help us understand.</p>
<h2>Who is working in the gig economy?</h2>
<p>All the signs suggest continued growth in the gig economy – paid work in short spells with no or limited commitment from either worker or company. This work frequently involves driving and delivering but can also cover other platform-mediated, short-term work, such as data coding. The work is frequently associated with the young – <a href="http://www.cbc.ca/news/business/toronto-sharing-economy-study-1.4058447">one survey</a> in North America found that over 70% were aged under 45 and 90% were in higher education.</p>
<p>This youth profile allows proponents of gig work to justify the limited level of security, providing access to work for people with limited professional experience. Furthermore, having another activity, such as being a student, makes the flexibility and autonomy attractive.</p>
<p>Yet such on-demand service work leads to a rise in precariousness more generally, and may increase difficulties for finding secure, full-time work. <a href="http://www.style-research.eu/wordpress/wp-content/uploads/ftp/D_7_1_Business_Start-Ups_Youth_Self-Employment_Policy_Literature-Review_FINAL.pdf">Recent EU research</a> highlights how damaging this “bogus self-employment” can be for young people trying to start their careers. Here we can see parallels with other forms of <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2507693">precarious work</a>, such as temporary and zero-hour contracts, that are <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2507693">similarly prevalent</a> among young people.</p>
<h2>Tensions in the gig economy</h2>
<p>Across various platforms of the gig economy, workers are agitating for more. There is evidence of Uber drivers wanting the <a href="http://uk.businessinsider.com/uber-is-considering-leaving-seattle-if-drivers-join-unions-2017-3?r=US&IR=T">right to unionise</a> and some Foodora riders want their platform to <a href="https://www.thelocal.de/20170518/foodora-and-deliveroo-couriers-protest-working-conditions-in-berlin">pay operational costs</a>, such as bike maintenance and mobile data fees. Workers on Amazon Mechanical Turk have petitioned to be <a href="https://www.theguardian.com/technology/2014/dec/03/amazon-mechanical-turk-workers-protest-jeff-bezos">treated like humans, not algorithms</a>.</p>
<p>Many focus their complaints around a desire to be treated as employees. They claim to have the <a href="https://www.theguardian.com/business/2017/mar/17/gig-economy-companies-have-cake-eat-it-workers-study-cipd">obligations of employees but not the benefits</a>. Yet gig platforms are clear that they do not recognise this employee status nor the obligations that would come with such a relationship.</p>
<h2>Violating the “psychological contract”</h2>
<p>One way of understanding these tensions is through the lens of “psychological contracts”. Human resource management theorists have developed this concept to describe the various unwritten agreements, both explicit and implicit, that workers and employers believe they have with one another. It captures the intangible and hard to quantify elements of the employer-employee relationship, beyond the legal contract. These elements can include considerations of flexibility in the scope of the work, use of initiative, <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1748-8583.1997.tb00272.x/pdf">evolution of roles and workers’ loyalty</a> to the employer.</p>
<p>These psychological contracts function when they are more or less balanced. The employee and employer make commitments to one another that make the relationship attractive to both parties. The ongoing nature of the relationship allows trust and reciprocity to develop.</p>
<h2>Gig platforms say they want a one-night stand, not a relationship</h2>
<p>Of course, not all employment relationships are ongoing. Psychological contract theory tells us that gig work, like other types of short-term work relationships, will tend to be more “transactional” rather than “relational”, with more straightforward exchange and less focus on mutual trust and commitment.</p>
<p>The latter seems to capture the relationship the gig economy platforms wish to foster, particularly in light of claims by platform workers to be employees. The platforms have <a href="https://www.theguardian.com/business/2017/may/25/deliveroo-accused-painting-false-picture-work-tribunal-self-employment">tailored the terms</a> and <a href="https://www.ft.com/content/9ad4f936-1a26-11e7-bcac-6d03d067f81f?mhq5j=e1">language</a> of their contracts in order to demand a minimum of their workers and justify minimal obligations in return. Indeed for some workers, <a href="https://doi.org/10.1108/09533239510079518">these transactional contracts are ideal</a>.</p>
<h2>A rough deal, or a broken one?</h2>
<p>Yet protests and legal actions show that not all workers are happy. Psychological contract theory might offer two potential explanations for the tensions of the gig economy – workers are unhappy with the terms of the psychological contract, or they believe the platforms have violated the contract.</p>
<p>It is clear that some workers find the terms unfair. While it might be argued that workers have consented to these terms, <a href="https://doi.org/10.1002/(SICI)%201099-1379(1998)19:1+%3C697::AID-JOB974%3E3.0.CO;2-I">consent becomes problematic</a> when there are few better options. Young people in <a href="https://www.jacobinmag.com/2017/01/foodora-strike-turin-gig-economy-startups-uber/">some countries</a> face a lack of jobs, pushing them into low quality, poorly paid and precarious <a href="http://www.style-research.eu/wordpress/wp-content/uploads/ftp/D_7_1_Business_Start-Ups_Youth_Self-Employment_Policy_Literature-Review_FINAL.pdf">gig work</a>.</p>
<p>It is also possible that gig workers initially consent to the psychological contract, but then believe the platform violates the terms. For instance, in 2016 Deliveroo encouraged workers to move to a <a href="http://www.telegraph.co.uk/business/2017/05/31/deliveroo-offers-workers-pay-per-trip-bid-defuse-self-employment/">new service contract</a>, claiming that it would work out better for riders – when some found <a href="http://www.frankfield.co.uk/upload/docs/Delivering%20justice.pdf">insufficient volume</a> of work to maintain their earnings, the psychological contract was arguably violated.</p>
<h2>A perception of reciprocity</h2>
<p>Perception is an important feature of psychological contracts and the perceptions of the worker and firm are not necessarily always aligned. Since the terms of such psychological contracts are <a href="https://doi.org/10.1007/BF01384942">“in the eye of the beholder”</a>, one party can believe that the other is failing to live up to obligations that the other does not recognise.</p>
<p>These perceptions <a href="https://doi.org/10.1111/j.1467-8543.2004.00335.x">can be informed</a> by the legal and social context, and notions of what is fair. For example, ongoing research at Grenoble Ecole de Management has found that delivery riders perceive good customer service, such as rectifying errors, to be part of the job, yet they are not paid for such additional tasks. The platforms benefit from this commitment. On the other side, gig workers often expect, based on common-sense ideas of fairness, that platforms would not deactivate an account due to <a href="https://www.newscientist.com/article/mg23230953-000-do-uber-ratings-let-passengers-discriminate-against-drivers/">unreasonable passenger ratings</a>. When this happens, the sense of betrayal can be intense. Reciprocity is what makes more conventional employer-employee relationships function and is perhaps part of what is missing for gig workers today.</p><img src="https://counter.theconversation.com/content/111047/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Les auteurs ne travaillent pas, ne conseillent pas, ne possèdent pas de parts, ne reçoivent pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'ont déclaré aucune autre affiliation que leur organisme de recherche.</span></em></p>The tensions between platforms and their workers can be better understood by studying the mutual expectations of both parties.Genevieve Shanahan, Etudiante PhD, Grenoble École de Management (GEM)Mark Smith, Dean of Faculty & Professor of Human Resource Management, Grenoble École de Management (GEM)Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1073692018-11-27T19:05:41Z2018-11-27T19:05:41ZRedefining workers in the platform economy: lessons from the Foodora bunfight<figure><img src="https://images.theconversation.com/files/247146/original/file-20181126-149332-q2wo73.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Foodora was struggling in Australia even before regulators took an interest in its cost-minimisation measures.</span> <span class="attribution"><span class="source">ArliftAtoz2205 / Shutterstock.com</span></span></figcaption></figure><p>Had Foodora’s Australian operations not already gone into <a>voluntary administration</a>, the November 16 decision of the Fair Work Commission might well have finished the food-delivery company off.</p>
<p>The commission <a>upheld</a> former courier Josh Klooger’s unfair dismissal complaint against Foodora. In doing so, it found Foodora had incorrectly classified him as an independent contractor, rather than an employee.</p>
<p>By treating workers as independent contractors, “gig economy” companies such as Foodora have avoided the cost of paying employee entitlements such as annual leave, sick leave and superannuation. The commission’s ruling made Foodora liable for paying such entitlements.</p>
<p>So does the ruling put other gig-economy companies on notice that they too will have to pay for employee entitlements? The short answer is no. It’s complicated because the decision reflects a range of reasons specific to Foodora’s operations. </p>
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<img alt="" src="https://images.theconversation.com/files/247193/original/file-20181126-149308-6tzszy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/247193/original/file-20181126-149308-6tzszy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/247193/original/file-20181126-149308-6tzszy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/247193/original/file-20181126-149308-6tzszy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/247193/original/file-20181126-149308-6tzszy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/247193/original/file-20181126-149308-6tzszy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/247193/original/file-20181126-149308-6tzszy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Foodora-branded uniforms and equipment indicated a level of control akin to that of an employer over an employee.</span>
<span class="attribution"><span class="source">Andrea Delbo/Shutterstock.com</span></span>
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</figure>
<p>But the Foodora case still might have some significant ramifications for the future of the gig economy – based on a not-yet-public ruling by the Australian Tax Office.</p>
<h2>Context matters</h2>
<p>The Fair Work Commission’s decision about Klooger’s relationship with Foodora can be contrasted to its decision that Uber drivers are <a>contractors not employees</a>. </p>
<p>Labour law experts <a>have pointed to</a> the exceptional circumstances of the Foodora case. These include the control the company exercised over Klooger. Foodora determined, for example, when he had to start and finish his shifts. It also required all couriers to wear a uniform and use Foodora-branded equipment.</p>
<p>Because these factors were specific to Foodora, there is no certainty the commission would rule that other gig-economy workers classified as independent contractors should be treated as employees. </p>
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Read more:
<a href="https://theconversation.com/finance-drives-everything-including-your-insecurity-at-work-101107">Finance drives everything — including your insecurity at work</a>
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<p>As we <a>have previously suggested</a>, this may even result in other platforms creating greater <a>arm’s-length relationships</a> with workers – both contractually and by reducing work-related support.</p>
<h2>Taxation and the gig economy</h2>
<p>Although the direct implications of the Fair Work decision for other platform companies are limited, Foodora’s demise is significant. </p>
<p>Its voluntary administration process has revealed the outcome of an Australian Taxation Office determination that could be relevant to other gig companies.</p>
<p>We know this because of Foodora’s administrator’s report to creditors. The report notes ongoing warnings from the tax office to Foodora. Chief among the tax office’s concerns was that Foodora should have been collecting PAYG income tax and making superannuation contributions. It was on this basis that the administrator agreed Foodora had probably <a>wrongly classified</a> its riders as independent contractors. </p>
<p>It is the tax office’s determination that could have the most far-reaching consequences for other platforms operating in Australia. </p>
<p>The determination and reasons for it are not yet in the public domain – due to “<a>obligations of confidentiality</a>”. We can only speculate about the underlying rationale. However, based on existing <a>case law</a> and <a>tax compliance priorities</a>, we suggest two critical aspects potentially expose other platforms’ operational models to the tax office’s compliance regime. </p>
<p>The first relates to the platform setting rates of pay and creating invoices on behalf of workers, which the platform then pays. Prior <a>tax office actions</a> suggest recipient-created tax invoices lead to questions about the true nature of the contracting relationship. Foodora had such a mechanism. Deliveroo and Uber Eats have something similar.</p>
<p>The second is the demand that workers provide an Australian Business Number (ABN) and what this means for <a>the contracting relationship</a>. The tax office is quite clear the ABN does not change the fundamental employment relationship.</p>
<p>This means the ATO is likely to scrutinise the particular arrangements a platform uses to classify workers as contractors.</p>
<h2>Platforms and profitability</h2>
<p>That Foodora went <a href="https://www.smh.com.au/business/workplace/foodora-australia-goes-into-administration-while-facing-legal-action-20180817-p4zy5b.html">into administration</a> before the ATO and Fair Work rulings could bite tells its own story about the platform economy. </p>
<p>Despite the mushrooming of different platforms across a range of sectors – from ride sharing to food delivery, hospitality and care work – serious questions remain about the viability and sustainability of platform companies. Uber, for example, <a>lost US$4.5 billion globally in 2017</a>. </p>
<p>In an environment where platforms ruthlessly compete for market share, profitability remains a key challenge. </p>
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Read more:
<a href="https://theconversation.com/how-to-stop-workers-being-exploited-in-the-gig-economy-103673">How to stop workers being exploited in the gig economy</a>
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<p>Author Nick Srnicek in his book <a>Platform Economy</a> warns that the ‘network effects’ associated with platform capitalism may lead to monopolies. This is the result of users flocking to the most used platforms while others fail. </p>
<p>Foodora may just be one of the first victims of increased market concentration in the food-delivery industry. Its demise reflects the evolving nature of the platform economy in Australia. </p>
<p>Given the continued popularity of the platform economy with consumers it is unlikely the above developments will spell the end of work organised and facilitated by online apps. However, this space remains fluid. There will be rulings on other platforms. There is talk of potential legal and regulatory <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Future_of_Work_and_Workers/FutureofWork/Report">reforms</a> to better protect workers in the gig economy. The issues of employment status and rights will not be settled any time soon. </p>
<p>In the meantime platforms are incentivised to do whatever they can to <a href="https://theconversation.com/why-gig-workers-may-be-worse-off-after-the-fair-work-ombudsmans-action-against-foodora-98242">avoid the costs of employment relationships</a> as that increases their chances of benefiting from, rather than falling victim to, the drift towards monopolisation.</p><img src="https://counter.theconversation.com/content/107369/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>It is the Australian Tax Office, not the Fair Work Commission, making the big waves with the Foodora case and the future of the gig economy.Alex Veen, Lecturer (Academic Fellow) in Work and Organisational Studies, University of SydneyCaleb Goods, Lecturer - Management and Organisations, UWA Business School, The University of Western AustraliaTom Barratt, Lecturer, School of Business and Law, Edith Cowan UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/982422018-06-14T02:18:12Z2018-06-14T02:18:12ZWhy gig workers may be worse off after the Fair Work Ombudsman’s action against Foodora<figure><img src="https://images.theconversation.com/files/223110/original/file-20180613-32339-429wup.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Fair Work Ombudsman alleges that food-delivery platform Foodora underpaid three workers.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The way “gig workers” are paid and protected might be about to change, as a result of legal proceedings brought by the <a href="https://www.fairwork.gov.au/about-us/news-and-media-releases/2018-media-releases/june-2018/20180612-foodora-litigation#twitter">Fair Work Ombudsman</a>. The Ombudsman alleges that food-delivery platform Foodora underpaid three workers by A$1620.74, plus superannuation, in a four-week period. </p>
<p>The Ombudsman argues that while Foodora engaged these workers as independent contractors, they were in reality employees. If the action succeeds, it could be positive for the underpaid workers, but it could also drive down working conditions. </p>
<p>The food-delivery platforms <a href="https://www.aph.gov.au/DocumentStore.ashx?id=65accf93-55c5-44cd-860b-ad9f3875e2b3&subId=563974">have stated</a> they would be willing to give their workers more benefits, such as training. But not at the cost of workers being classified as employees. If the Ombudsman’s case succeeds, it could cause gig platforms to offer fewer protections in order to ensure workers are classified as contractors. </p>
<p>This could not only disrupt the food-delivery sector, but have a broader impact on the gig economy, restaurants, customers and workers. </p>
<h2>Employees or contractors?</h2>
<p>The difference between an employer and a contractor is significant. <a href="https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/rights-and-obligations/independent-contractors-and-employees">They fall under different laws, receive different protections and have different obligations</a>.</p>
<p>If a contractor performs poor work they are legally liable for that. But an employer is responsible for the poor work of an employee.</p>
<p>In many cases this distinction is clear-cut. However, in the gig economy these workers operate in a grey area, one the Fair Work Ombudsman seeks to test.</p>
<p>Whether workers can be classified as employees or contractors <a href="https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/rights-and-obligations/independent-contractors-and-employees#sham">depends on a variety of factors</a>, including the nature of the work. If workers are deemed employees then they receive a greater number of protections, including minimum wage rates.</p>
<p>In the Australian platform-based economy (including ride sharing and food delivery), the Fair Work Commission has <a href="https://www.fwc.gov.au/documents/decisionssigned/html/2017fwc6610.htm">determined workers are independent contractors</a> in two recent cases. </p>
<p>In one case, <a href="https://www.fwc.gov.au/documents/decisionssigned/html/2018fwc2579.htm">Commissioner Nick Wilson</a> stated that “[the driver] did not bring anything especially entrepreneurial to the arrangement” but also that “it is evident that the weight of those indicators leads to the finding that [the driver] was not engaged as an employee, but instead as an independent contractor”.</p>
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Read more:
<a href="https://theconversation.com/the-way-they-manipulate-people-is-really-saddening-study-shows-the-trade-offs-in-gig-work-79042">'The way they manipulate people is really saddening': study shows the trade-offs in gig work</a>
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<p>The Fair Work Ombudsman’s decision to intervene in the food-delivery sector might be a response to <a href="https://theconversation.com/being-exploited-and-breaching-your-visa-the-limited-choices-of-the-food-delivery-worker-82589">poor working conditions</a> for gig workers. But the decision to go after Foodora specifically could dissuade rather than encourage other platforms to improve working conditions. </p>
<p>As shown in the table below, the three major food-delivery platforms have varying approaches to engaging workers. For instance, Foodora, in the period under investigation, would engage workers for set periods of time, rather than per delivery. Deliveroo and Foodora also provided uniforms for workers, while UberEATS did not.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/222949/original/file-20180613-153677-ibau3e.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/222949/original/file-20180613-153677-ibau3e.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/222949/original/file-20180613-153677-ibau3e.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=381&fit=crop&dpr=1 600w, https://images.theconversation.com/files/222949/original/file-20180613-153677-ibau3e.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=381&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/222949/original/file-20180613-153677-ibau3e.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=381&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/222949/original/file-20180613-153677-ibau3e.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=479&fit=crop&dpr=1 754w, https://images.theconversation.com/files/222949/original/file-20180613-153677-ibau3e.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=479&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/222949/original/file-20180613-153677-ibau3e.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=479&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Authors’ original work based on Fair Work Ombudsman, The Australian Financial Review, The Guardian Australia, original research.</span>
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<p>The fact that the case was brought against Foodora suggests that the company has the most direct relationship with workers, and thus its workers are most likely to be classified as employees. </p>
<p><a href="https://theconversation.com/being-exploited-and-breaching-your-visa-the-limited-choices-of-the-food-delivery-worker-82589">Our research shows</a>, however, that these work practices are evolving all the time. </p>
<p>In submissions to the ongoing <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Future_of_Work_and_Workers">Senate Select Committee on the Future of Work and Workers</a>, both <a href="https://www.aph.gov.au/DocumentStore.ashx?id=65accf93-55c5-44cd-860b-ad9f3875e2b3&subId=563974">Deliveroo</a> and <a href="https://www.aph.gov.au/DocumentStore.ashx?id=fd4f6ffb-c366-4805-a61a-d1deb94c3284&subId=563007">UberEATS</a> claimed they would like to provide additional benefits to workers but doing so in the existing regulatory environment might compromise their business models. </p>
<p>For instance, <a href="https://www.aph.gov.au/DocumentStore.ashx?id=65accf93-55c5-44cd-860b-ad9f3875e2b3&subId=563974">Deliveroo</a> argued that it “… wishes to be able to provide additional benefits to [workers] without the risk of those benefits changing the relationship from one of self-employed riders to riders employed by Deliveroo”. </p>
<p><a href="https://www.aph.gov.au/DocumentStore.ashx?id=fd4f6ffb-c366-4805-a61a-d1deb94c3284&subId=563007">UberEATS</a> similarly argued that “current employment classifications create significant disincentives: they can mean that offering training to these [workers] can compromise the self-employed status of the individual. We believe that companies should be incentivised, not penalised, for helping independent workers”.</p>
<p>This is why the Fair Work Ombudsman’s decision to target Foodora may be counterproductive. It sends the signal that the better you treat your workers, the more likely they are to be classified as employees, the more expensive your labour costs will be and the more inflexible your operation will become. </p>
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Read more:
<a href="https://theconversation.com/being-exploited-and-breaching-your-visa-the-limited-choices-of-the-food-delivery-worker-82589">Being exploited and breaching your visa: the limited choices of the food delivery worker</a>
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<p>The Foodora case is interesting as it applies existing employment rules to “gigified” work. Currently, <a href="https://theconversation.com/being-exploited-and-breaching-your-visa-the-limited-choices-of-the-food-delivery-worker-82589">some gig workers earn significantly less than the minimum wage. They also miss out on other protections of employment</a>. </p>
<p>However, unlike high-profile franchising cases such as the <a href="https://theconversation.com/are-some-franchises-more-likely-to-exploit-their-workers-49444">underpayment of 7/11 workers</a>, their current classification as contractors means this practice is within the law. </p>
<p>If the Fair Work Ombudsman is successful and these workers are reclassified as employees, it might provide a disincentive for other platforms to protect workers. The law itself might need to change. </p>
<p>With this in mind, we all need to pay attention to the <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Future_of_Work_and_Workers">recommendations of the Senate Select Committee on the Future of Work</a>, due on June 21.</p><img src="https://counter.theconversation.com/content/98242/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>That the Fair Work Ombudsman brought a case against Foodora suggests its workers are most likely to be classified as employees. This could dissuade other platforms from offering similar benefits.Tom Barratt, Lecturer, School of Business and Law, Edith Cowan UniversityAlex Veen, Scholarly Teaching Fellow in Work and Organisational Studies, University of SydneyCaleb Goods, Lecturer - Management and Organisations, UWA Business School, The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/934282018-03-16T06:46:21Z2018-03-16T06:46:21ZGig platforms’ claims over worker chat groups: fraught territory indeed<p>Food delivery platform Foodora, it seems, is <a href="http://www.afr.com/news/policy/industrial-relations/foodora-fires-courier-for-refusing-to-quit-workers-chat-group-20180314-h0xg33">trying to claim intellectual property rights</a> over an encrypted chat group that Foodora riders were using to swap tips and shifts, and talk about pay and conditions. </p>
<p>This raises important questions about what digital privacy rights we have, especially over what might once have been “water cooler” conversations. Many Australians wouldn’t agree that employers have rights even to look at private social media posts. </p>
<p>And when it comes to intellectual property rights, employers’ rights are usually limited to material created in the course of employment. And rights over the material of independent contractors are even more limited. </p>
<p>In <a href="https://ses.library.usyd.edu.au/handle/2123/17587">recent research</a>, based on an online survey, my colleagues and I found that only 37% of Australians agreed that it was acceptable for current employers to look at your public social media posts. Only 20% agreed it was acceptable when the social media posts were private.</p>
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Read more:
<a href="https://theconversation.com/the-way-they-manipulate-people-is-really-saddening-study-shows-the-trade-offs-in-gig-work-79042">'The way they manipulate people is really saddening': study shows the trade-offs in gig work</a>
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<p>Our research asked about employers looking at posts by employees. But Foodora considers its drivers <a href="https://www.foodora.com.au/contents/terms-and-conditions.htm">independent contractors</a>, not employees. This is due to the flexibility and autonomy that it asserts the drivers have (and is <a href="https://www.smh.com.au/business/careers/fired-for-taking-a-holiday-bicycle-couriers-claim-unfair-dismissal-20180313-p4z45p.html">in dispute</a>), but it also makes it extraordinary that Foodora would lay claim to a private chat group among riders. </p>
<p><a href="http://www.afr.com/news/policy/industrial-relations/foodora-fires-courier-for-refusing-to-quit-workers-chat-group-20180314-h0xg33">According to The Australian Financial Review</a>, Foodora claims that by maintaining and refusing to transfer ownership of encrypted chat groups on Telegram, a rider was potentially breaching confidentiality and Foodora’s intellectual property rights. </p>
<p>It is difficult to imagine what kind of intellectual property rights Foodora might be talking about. Could an employer or platform claim copyright in a chat group? We’d first have to accept that conversations in a chat group are protected by copyright, just because they’ve been written down.</p>
<p>But even if they are, employers usually only <a href="http://www5.austlii.edu.au/au/legis/cth/consol_act/ca1968133/s35.html">own</a> what employees create <em>in the course of their employment</em>. </p>
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Read more:
<a href="https://theconversation.com/how-gig-economy-workers-will-be-left-short-of-super-85814">How gig economy workers will be left short of super</a>
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<p>If I’m an employee graphic designer, hired to create new logos and designs for my company, no one should be surprised that they belong to the company. </p>
<p>But if I’m a retail sales assistant and writing the world’s next great novel at night, it would be very surprising if my supermarket employer could turn around and claim the copyright royalties. </p>
<p>A general rule of thumb is: what work was the person hired to do? It’s not obvious to me that conversations delivery riders might have, even if it is ostensibly about their work, is work they were hired to do. </p>
<p>And remember, again, gig workers like Foodora drivers are, according to the platforms themselves, independent contractors. In copyright law, <a href="https://www.artslaw.com.au/info-sheets/info-sheet/employment-issues-for-nsw-employees/">work created by independent contractors belongs to them</a>. We would, though, have to look at the way the Foodora contracts are written. The ownership rules in copyright are all subject to contract. </p>
<p>It’s conceivable that a platform’s terms could be so broadly written that it tries to claim copyright in anything at all that is related to the platform - but that would be an extraordinarily broad way to write a contract. I suspect courts might be quite unwilling to read a term like that broadly.</p>
<p>Foodora might be claiming that the information shared by the drivers is confidential information. Here things are a little more legally interesting: to get to the bottom of a claim like that would mean looking at the law of contract, the terms of the contract, the law of equity etc. </p>
<p>But again, it’s not clear that a platform could claim that the standard terms and conditions it offers to contractors are confidential information (they are quite widely discussed in the media), or that riders discussing those terms among themselves is a breach of confidence. And for a court to treat terms like that as confidential would be very disempowering for workers - and not great for the market for employment, either.</p>
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Read more:
<a href="https://theconversation.com/a-new-definition-of-worker-could-protect-many-from-exploitation-91083">A new definition of 'worker' could protect many from exploitation</a>
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<p>More fundamentally, we also need to ask, if a gig economy platform claims that private, encrypted conversations happening among workers somehow belongs to it, what degree of control is that platform asserting over the workers?</p>
<p>This isn’t consistent with the assertion that those workers are free, autonomous, independent contractors with none of the rights (or responsibilities?) of an employee.</p>
<p>In our study we found that those who had only completed high school – the least powerful employees – were consistently the group least likely to agree it was acceptable for any employer to look at public or private social media posts.</p>
<p>We also found that a majority of Australians supported some government regulation for online gig work platforms. So perhaps platforms should think about the consistency of the claims they make. Foodora’s feels a little like having your pizza and eating it too.</p><img src="https://counter.theconversation.com/content/93428/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kimberlee Weatherall is employed by the University of Sydney. Research quoted in this piece has been funded by the University of Sydney's Research Excellence Initiative.</span></em></p>Could an employer or platform claim copyright in a chat group? We’d first have to accept that conversations in a chat group are protected by copyright.Kimberlee Weatherall, Professor and Associate Dean (Research) The University of Sydney Law School, University of SydneyLicensed as Creative Commons – attribution, no derivatives.