Today, Deliveroo drivers are celebrating a partial-win. Following 6 consecutive days of striking, drivers across London have forced the company to backtrack on part of its plans to impose a new, disputed, work contract in some areas of the city.
This victory, however small, is symbolically very significant. The strike is an example of collective bargaining navigating a new frontier of app-enabled work – and the new power imbalances that come with it.
What was the strike about?
This was the last week for Deliveroo drivers in some London zones to sign on to a ‘trial’ contract that would see their hourly pay – which at £7 per hour is already below minimum wage – replaced with a commission based system where drivers get £3.75 for every delivery they make.
Striking drivers were demanding the choice to opt-out of the trial. Deliveroo’s management maintained that drivers had been offered a choice all along, but neglected to mention that if drivers did not sign, they would have to leave their chosen work area and start-up elsewhere.
As one driver told me earlier in the week:
“The new pay structure being imposed might benefit a few part time staff who only work at peak times – but it means staff who rely on this job as their main income and cover the quieter times will be earning way less. We’re striking because we don’t want to be played-off against each other in this way.
Overall it’s a bad deal – it takes away the guaranteed hourly rate and so effectively takes away any security over incomes that we felt we had. I’m not in one of the affected ‘trial zones’ yet, but I’m concerned for my colleagues who are, and am worried we may be next.”
Deliveroo’s imposition of the new pay structure zone-by-zone, with a “sign-up or move-on” attitude towards staff, is a worrying bellwether for the direction of travel of working conditions among new tech-enabled employment models.
What can we learn from the Deliveroo case?
This strike has given the UK labour market and economy a much needed health check
The ONS reported last month that part-time self-employment is growing fast. According to the findings, it’s young, part-time, self-employed men who express the greatest dissatisfaction with their employment status. Many are joining the part-time workforce directly from unemployment – “possibly indicating a choice made under economic hardship”.
Deliveroo is one of the fastest growing “Gig economy” companies, offering shift based work to people willing to use their own vehicle and phone data to get the gig. The divide and conquer approach of splitting up this workforce into thousands of ‘self-employed’ contractors, managed via an app, may seem appealingly efficient to an employer. But the power imbalance created is counterproductive if we look at the bigger economic picture.
Insecure, badly paid work is bad news for the economy overall. A weak voice for employees’ rights leads to a lopsided share of national income going to company profits and sitting in banks, rather than into wages and spending in the real economy.
As even the IMF has pointed out – soaring inequalities of income and wealth are an upshot of weakening of employee voice in the face of globalised employers. The economy suffers as a result – by £444 per person per year at our last estimate.
The actions have started to shift the burden of proof from the employee onto the employer
The Department for Business, Energy and Industrial Strategy (BEIS) reportedly responded to the Deliveroo dispute stating that “all workers must be paid the national living wage of £7.20 an hour unless a court or HM Revenue and Customs is able to define them as self-employed” – and that, most importantly: “an individual’s employment status is determined by the reality of the working relationship and not the type of contract they have signed.”
This is big news for digital platform employers. If adhered to it will place the dubious employment standards of their models under further scrutiny.
The Deliveroo case demonstrates quite clearly how the flexible employment model of app-based work benefits the company, not the contractor. The image of autonomy that comes with self-employment is quickly shattered if the terms you sign up to are always subject to change in line with the company’s preferences.
The drivers’ demands for more control over their pay structures is a first step towards demanding an assured minimum – or even Living Wage. Full employment rights like sick and holiday pay could be next. The landmark GMB union case to quash Uber’s claim that its drivers work for themselves – has started this ball rolling.
What needs to happen next?
We need to bargain for better conditions across sectors. The move towards automated work and outsourcing jobs to casually contracted staff demands new ways for workers to lift pay and working conditions across the board. Sectoral bargaining could do just that – the Institute of Employment Rights recently laid out how it could work.
Unions need to continue to grow the collective voice of workers ready to take on the corporate giants: Unite’s Sports Direct case is a good example.
Allow new forms of collectivisation to emerge – like unions for freelancers or tech-worker coops – where members have both the flexibility and autonomy promised by self-employment with the support structure of a union to ensure they’re not being exploited.
— source neweconomics.org