What is the gig economy and how will Uber’s announcement affect it? | Business news
Uber’s announcement of basic employment rights for its drivers comes after a long-standing legal battle that could force the so-called gig economy to be shaken.
What is the gig economy?
The term describes a way of working in which the work is carried out on a short-term basis or from job to job via platforms such as About, a taxi app, Deliveroo, a takeaway food service or courier company such as Hermes or DPD.
Other smaller platforms connect people with opportunities from office and administrative work to teaching, gardening and housework.
Some use the work to top up their main salary or to fill a gap, while for others it is the main source of income.
So far, employers have been able to save costs, as these employees are classified as self-employed rather than as employees.
That meant they were not entitled to paid sick leave, vacation or pensions, and – the companies argue – gave these contractors the flexibility to choose when and how much to work.
Data on the UK gig economy is scarce, but the Chartered Institute for Personal and Development (CIPD) estimated in 2017 that 1.3 million people, or 4% of the total workforce, worked in it.
What is the problem?
Uber’s argument about driver independence was supported by the Supreme Court.
It was pointed out that the company sets tariffs and other conditions and that drivers have no say. They can be punished if they don’t take enough jobs or if they do poorly on a customer review system.
The judges concluded that drivers “are in a position of submission and dependence on Uber” and “have little or no ability to improve their position through professional or business skills”.
Unions say gig economy workers should be entitled to the same benefits and protections as everyone else.
While Says Uber It will now do the right thing for employee benefits, at least for its private loaner drivers. Critics say it’s just because they were “kicked and yelled” to do so.
Does this mean that gig economy workers now have the same rights as everyone else?
No. The court ruling at the center of all the latest developments classified the Uber drivers bringing the case as “workers”.
This is a stopover between self-employed and employee status.
This means they are entitled to rights like minimum wages and paid leave – and in some cases statutory sick pay and paid parental leave.
However, they usually miss others, e.g. B. Minimum notice periods for dismissal, time off for emergencies and statutory dismissal compensation.
Courier company DPD already hasoffered its drivers the opportunity in 2018 to upgrade their employment protection to that of a “worker”.
What are the other implications?
Susannah Streeter, an analyst at Hargreaves Lansdown, believes Uber’s move “will permeate the entire gig economy.”
However, Uber argues that it’s specific to the private rental vehicle portion of its business – rather than grocery shipping operations like its own brand Uber Eats or rival Deliveroo, for example.
It has also caused concern over when taxi drivers should be paid.
The Supreme Court says they should be eligible for wages for any length of time they are signed into the Uber app, but the company says they are not paid until they accept a travel request.
The drivers’ lawyers in the case, James Farrar and Yaseen Aslam, said they were concerned that Uber was trying to “pick out” aspects of the verdict and think about the details.
Mr Farrar and Mr Aslam said Uber’s move would have Uber drivers “convert to 40-50% in the short term”.
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