With the upcoming platforms such as Uber(Eats), Deliveroo, GrubHub, Airbnb, TaskRabbit thousands of people are enabled to make some (extra) money. They do so by being the independent link between platform driven demand and supply. The kind of work (delivery boy/girl or taxi-driver for example) has been defined as a “gig”, referring to the life of musicians who perform on a on-demand basis (Thomas, 2016). The number of gig-workers has increased the last five years. In 2012, 0.1 per cent of the U.S. adults earning income was derived monthly from the gig-economy. Five years later, this share has increased to 1 per cent (JPMorgan Chase Institute, 2016). The online platform facilitates the work, you can earn some (side-gig) salary, the economy benefits and everybody is happy. You think.
So, what is the downside? It was reflected in a trial in September this year. A former driver of GrubHub sued the company because of underpaid wages, expenses and other damages. It was the first time a gig-related lawsuit made it to trial. The matter is not new. Lawsuits with Uber and Doordash and their employees are known and ended in settlements of million of dollars (Dickey, 2017). I will explain below why so many disagreements exist between the platform-party and the contributor-party.
For the on-demand companies there is one clear driver: cost reduction by cutting salary costs. Instead of hiring full-timers with all the costly strings attached, such as covering accidents and health by taking insurances, the platform companies hire contractors who work independently and take care of their own risks and taxes (Learnvest, 2013). The controversial question here is: what control does the platform company have? (Zhou, 2017) They do control the (amount of) work of the workers against relatively low wages. A pure form of contractorship is having the room to negotiate about prices and work hours but that is not the case in the existing constructs. As the platform producers now sound like the bad guys, there is also a responsibility for the gig-workers to know what an employee agreement entails and he or she should weigh the benefits and disadvantages of being an employee or an independent contractor.
All in all, the amount of cases suggests there is a need for better regulation and legislation to protect the workers that are now used as toys to meet demand of the influential on-demand giants. So, what should be the legal outcome on contractual payment terms and structure of the relatively new gig-economy?
Dickey, M.R. (2017) GrubHub trial could have major implications for the gig-economy, Available at https://techcrunch.com/2017/09/02/grubhub-trial-could-have-major-implications-for-the-gig-economy/ [Accessed 12 October 2017]
JPMorgan Chase & Co (2016) The Online Platform Economy: Has Groth Peaked?, Available at: https://www.jpmorganchase.com/corporate/institute/document/jpmc-institute-online-platform-econ-brief.pdf [Accessed 13 October 2017]
Learnvest (2013) The difference between a 1099 and a W2, Available at: https://www.learnvest.com/knowledge-center/the-difference-between-a-1099-and-a-w-2/
Thomas, C. (2016) ‘s Ochtends poetsen, ‘s middags shouwen en ‘savonds ontwerpen, Availabe at: https://www.groene.nl/artikel/s-ochtends-poetsen-s-middags-sjouwen-s-avonds-ontwerpen [Accessed 13 October 2017]
Wolthuizen, J. (2017) Bezorgers op de fiets worden aan hun lot overgelaten, Available at: https://www.parool.nl/amsterdam/-bezorgers-op-de-fiets-worden-aan-hun-lot-overgelaten~a4495845/ [Accessed 12 October 2017
Zhou, N. (2017) It’s a tough gig: Uber drivers and Deliveroo riders fight for employees’ rights, Available at: https://www.theguardian.com/business/2017/jul/09/its-a-tough-gig-uber-drivers-and-deliveroo-riders-fight-for-employees-rights [Accessed 12 October 2017]
