Instant delivery services have the potential to create real jobs while meeting consumer needs efficiently. But if the gig economy is to offer the protections and job quality that workers rightfully expect, all stakeholders must embrace certain responsibilities that amount to a New Social Contract.
This article is authored by Alain Dehaze, CEO of the Adecco Group.
Over the last 15 years, the ongoing globalisation and digitalisation of many industries have contributed to a proliferation of digital platforms of all kind, with instant delivery platforms in particular. The rise in number of both delivery platforms and affiliated workers has created a need to regulate the relationship between them.
In our new whitepaper, we analyse the delivery platforms’ business ecosystem through the lens of working conditions, offering recommendations to platforms as well as policy makers to help promote a responsible, flexible model that creates a fairer relationship between delivery platforms and affiliated workers. These are based on a wide series of interviews with representatives from platforms, unions, as well as policy makers. Below, read some of our key takeaways.
A young and growing industry
How many times have you ordered a quick meal from Uber Eats or your local instant delivery platform? Platforms like Deliveroo or Just Eat have popped up in growing numbers in recent years, especially during the pandemic, acting as intermediaries between the customer; a supplier such as a restaurant or other merchant; and the delivery worker affiliated with the platform (whom we’ll often refer to as a “rider”). The platform charges a commission to connect the three parties. Operating margins are thin in this world, often resulting in lower profits for merchants and less disposable income for delivery workers.
For platform workers, the most commonly cited benefits of this gig work are flexible hours, low barriers to entry, and easy access to income and work experience. As it turns out, though, the work is often unpredictable and the earnings heavily dependent on parameters set by the platform. As independent contractors, workers also typically lack the social benefits and protections that accompany direct employment.
Consistency is lacking
Today, there is no consistent regulatory framework that sets parameters for a “fair” relationship between the platform and affiliated workers. Policies vary by country; thus far, national or state-level courts generally make legal decisions related to the platform-worker relationship (especially workers’ employment status) on a case-by-case or company-specific basis. Top considerations for policymakers include workers’ job and income security; access to benefits and social protections; career development opportunities; and the right to negotiate contracts.
Creating a more balanced relationship between delivery platforms and affiliated workers, while at the same time maintaining business growth and worker flexibility, will require an inclusive approach that results in a productive conversation at the policy level. Only this approach—featuring riders, unions, platforms, workforce solutions providers and academia—will create a mutually beneficial outcome.
We believe policymakers must address the complex question of how to redefine labour models for the digital age, including those for instant delivery work, to provide workers more options for economic stability, professional upward mobility, and certainty in their future. Effective solutions might include the following:
- Decoupling employment status from access to benefits
- Collective bargaining or cooperatives for negotiating platform workers’ conditions
- Flexibility in contracts and employment models
- Government subsidies for platform workers’ benefits
- Leveraging workforce solutions firms as a way to help platforms hire workers on a more flexible basis without becoming their direct employers
The way forward
As stakeholders seek the most appropriate framework and standards for the instant delivery platforms industry, we at the Adecco Group introduce our labour market expertise to the discussion by advocating for three guiding principles outlined here.
Competition between platforms should not go at the expense of social protection for workers. In most countries, there are plenty of opportunities to organize decent flexibility for all platform workers when they are employees – including the agency work model. Equally, for those workers who truly appreciate the freedom that comes with self-employment, there are usually options for them to organize their own safety nets as they see fit. While this freedom for freelancers is important, governments should consider ways to protect vulnerable groups of self-employed by creating universal basic protection, or an obligation for self-employed to buy into social protection systems.
Not all riders are self-employed, not all riders are employees. In most jurisdictions, especially in Europe, the difference between employment and self-employment lies in the autonomy of the worker versus the level of hierarchy exercised by the client or employer. Specific criteria might differ slightly between countries, but often mirror elements of the “Yodel-criteria,” named after the ruling by the European Court of Justice in 2020 identifying these criteria: the ability to accept or reject assignments, the ability to set working hours, non-exclusivity to one platform, and the ability to use subcontractors or substitutes. In other jurisdictions, particularly in the US, the focus is more on the “periphery vs. core activities” criteria. Regardless, the fact that a platform operates digitally cannot be seen as a determining factor.
Many freelance riders today may not have the financial means to invest in organizing their own safety nets. Whichever way social protection is organized, it will bring some additional costs. It is also clear that none of the stakeholders involved currently has the financial leeway to absorb these costs, and so the only way to maintain profitability for all stakeholders involved will likely be to increase the price for the end consumer.