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Sat, 28 November 2020

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Uber are subjecting workers to 'sweated labour' for poverty pay in the gig economy

Uber are subjecting workers to 'sweated labour' for poverty pay in the gig economy
4 min read

Drivers working with Uber are at risk of taking home as little as £2 an hour, less than a third of the National Living Wage, says Frank Field MP.

The House of Commons will be confronted this week with glimpses of a reverse face to the record levels of employment in the British economy.

That reverse face, which I will describe in a Westminster Hall debate on Wednesday, is the number of jobs in which people are forced into forms of self-employment they have no wish to embrace, that put them at risk of earning less than the National Living Wage, and which are enforced by threats to the worker by fear of losing their livelihood.

It is this behavior which, I will argue in the House, should be at the top of the charge sheet against Uber’s outgoing chief executive, Travis Kalanick. For this alone he should have been sacked, as there is an unknown number of drivers working with Uber who are being sweated by the company.

The irresistible rise of Uber embodies the rapid growth since 2010 of what is called the ‘gig economy’. As with other companies in the ‘gig economy’, Uber offers consumers rapid, low-cost, convenient access through their smartphones to a bevy of goods and services. It competes with other companies by offering consumers as low a price as possible for its services.  

Yet there is a human cost to this business model. As Andrew Forsey and I set out in a report last December, more than 80 drivers working with Uber have detailed some of the appalling conditions under which they are asked to work.

Here, in Britain’s ‘gig economy’:

  • Drivers working with Uber are at risk of taking home as little as £2 an hour – less than a third of the National Living Wage.
  • There are four main reasons for this chronically low pay: very low fares which have been cut in recent years; high rates of commission demanded by the company which vary between newer and older drivers; the costs of renting the right vehicle which meets Uber’s requirements; and the costs of refuelling and maintaining each vehicle.
  • A heavy downward force on drivers’ ability to earn a decent living has been exerted by the rapid increase in the number of new drivers undertaking work with Uber. It was reported to me that increased competition for fares has resulted in drivers staying out on the road for much longer periods of time each day, and for a greater numbers of days each week. They have done so merely to try and maintain their earnings, let alone be fortunate enough to increase their earnings. That an unlimited number of drivers is able to join a market in which there is no wage floor is a recipe for chronic low pay and insecurity.
  • Uber appears to have unloaded almost all of the risks that are inherent within the private hire industry, onto the drivers with whom it works.

The company has been able to operate along these lines merely by labelling its tens of thousands of drivers in this country as self-employed. Yet an employment tribunal found last year that this label has wrongly been applied to drivers who, as Andrew and I concluded in December’s report, are controlled in all sorts of ways by Uber. Clearly for the sake of both the drivers themselves as well as taxpayers, who are being asked to foot the bill for this business model through lost VAT receipts and higher tax credit payments, this state of affairs cannot be allowed to continue.

My plea to the minister, therefore, will be for the introduction of a national minimum standard of fair work in the ‘gig economy’, below which no company is allowed to operate, alongside a new legal test for companies claiming their workforce to be self-employed. Each of these proposals is aimed at maintaining a flexible labour market which is not one exclusively paid for by the enforced self-employment of what could be a growing number of working people.

Looking at Uber, in particular, the Government needs to give local transport authorities the tools and encouragement they need to attach ‘adequate working conditions’ to their ‘fit and proper operators’ criteria before they come to grant, or renew, Uber’s operating licences.

Until such a programme of action is set in train, a growing number of people in this country will find themselves being subjected to ‘sweated labour’ – toiling through anxiety and insecurity, for unsafe lengths of time across seven days a week, in return for poverty pay.

Frank Field is the Labour Member of Parliament for the Birkenhead constituency

Simon Vicker, Director of Policy at IPSE​, has reacted to Frank Field MP's article saying: The 'gig economy' is a positive development for the UK economy as a whole, but also for the vast majority of people working in it." Read the full reaction here

Read the most recent article written by Frank Field - Universal credit failures are driving people into ‘survival sex’


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