Reforming the 100-year-old employment practices used by gig economy firms like Deliveroo
To counter the cat and mouse game of individuals having to take companies to employment tribunals, employment law should be reformed so that it is companies who have to prove their workforce is self-employed, says Frank Field MP.
Deliveroo is one of the biggest players in Britain’s ‘gig economy’. Tens of thousands of people on bikes and motorbikes help the company provide a popular and convenient delivery service to consumers who want to order meals from restaurants to eat at home or their place of work.
That’s why the company’s stated objective, which it emphasised last weekend, of reforming the nature of work in the ‘gig economy’ carries such significance.
The report that Andrew Forsey and I publish today aims to give Deliveroo the map and compass it needs to forge a new path in this direction, weaving carefully between different degrees of flexibility and security so that riders across the board can gain the type of work they need.
Our report finds that, as things stand, Deliveroo’s workforce resembles a dual labour market which works well for some riders and very poorly for others.
The self-employed status and part-time nature of much gig economy work has given the labour market a flexibility that is still relatively new. Some of those workers who are keen to seize this opportunity view it as a short-term option while they develop their longer term earning power – setting up their own business, starting on an artistic career and the like.
But for an unknown number of workers these imposed self-employment opportunities are all there is on offer, even though their need is for stable work for at least the level of the National Living Wage. It is this group that we are most concerned about in today’s report.
Taking pay as one example, some Deliveroo riders earn as little as £2 or £3 an hour and are struggling to keep up with their rent or to pay the bills. Others, in even more extreme circumstances, earn nothing at all at certain times while those at the other end of the scale sometimes reach £20 an hour. Riders’ pay tends to average at a little above, a little below, or at the level of the National Living Wage. Across the online food delivery sector of the ‘gig economy’ as a whole, around 158,000 individuals report being paid less than the National Living Wage.
There are also parts of Deliveroo’s current employment model which resemble the system of casual labour that existed in Britain’s ports a century ago. A surplus pool of riders is invited to bid for shifts every Monday, just as workers would gather around the dock gate desperately hoping that they would be offered work – some were fortunate to be offered fairly regular shifts, while others were offered no work.
In seeking to help Deliveroo change radically the nature of work in the gig economy, the report recommends that those people requiring more stability and certainty in their work should be able to look to their firm to offer this prospect after they have built up a record over a certain period of time. Deliveroo should commit itself to offering a flexible worker status to those riders who form the backbone of its workforce.
Individuals who prize flexibility and only wish to work a smaller number of hours to suit their own needs, or wrap around other jobs, should be able to continue embracing the current model which enables Deliveroo to expand and contract its workforce when needed. However, the company should guarantee hourly pay rates of no less than the National Living Wage for all the time that people are logged in and available for work.
With a view to effecting a reform programme across the gig economy as a whole, the report recommends that the Director of Labour Market Enforcement should conduct deep dives and report on both levels of pay for different groups of workers as well as the reality of the self-employed status and the validity of each firm’s defence of that status, such as workers being able to substitute somebody else’s labour for their own and remain on the company’s books.
Moreover, to counter the cat and mouse game of individuals having to take companies to employment tribunals, employment law should be reformed so that it is companies who have to prove beyond doubt they meet certain criteria showing their workforce to be self-employed.
The reform programme we outline will, I hope, be picked up by Deliveroo and the Government as a means of both protecting vulnerable workers while preserving the flexibility that so many individuals have said they value.
Frank Field is Labour MP for Birkenhead.
PoliticsHome member, IPSE, have responded to Frank Field's article, saying 'In trying to improve conditions for people in this group, we must not worsen conditions for other, larger groups who are quite different from Deliveroo riders.' Read the full response here.