COVID-19 a catalyst for action
COVID-19 has been a major disruptor on the labour market and in many respects has accentuated the positives as well as the negatives of the platform economy. In the socially distanced society engendered by the pandemic, some of the services provided most efficiently by the platform economy (such as food and parcel delivery) have been a lifeline for many. This demand has bolstered the market dominance of a small number of providers, highlighting the oligopolistic trends of the broader industry. Yet their workers are often effectively in thrall. Lack of sick pay options, limited access to unemployment benefits or income support schemes, and a tightening labour market have obliged many to keep going at the expense of their own safety and health. The algorithm underlying the platform mechanism is built for efficiency, not for empathy.
Workers, however, are fighting back, demanding to be recognised as employees and not, as the platforms insist, as independent contractors responsible for their own social insurance and with control over their income. Dozens of cases have been argued in courts across Europe, and the majority of recent rulings have come down in favour of the workers, right up to last week’s decision by the United Kingdom Supreme Court. These decisions have been made based on the evident subordination of workers to the platforms – such as the lack of control over when and where they can work, the imposition of sanctions by the platforms, and the power of the platforms to monitor and surveil workers. Courts have also taken account of who establishes the market relationship – who is in charge of branding, invoicing, whether the worker is registered as self-employed and can offer their services to other clients.
The spate of legal cases highlights the regulatory gaps that enable platforms, not labour law, to determine the status of workers. But regulation cannot be deferred indefinitely.
A future still to be defined
In a scenario-building exercise, Eurofound has projected how platform work might develop over the next decade and has discussed with policymakers what could be done to realise a desirable future – and to avoid the grim alternatives.
Starting with a future that assumes that platform work in 10 years’ time still looks broadly similar to today, this scenario strongly emphasises the need for regulatory clarifications. This does not necessarily mean new or additional regulation, but ensuring that this employment form and business model are sufficiently and explicitly covered in the fields of employment and social policy, taxation, competition, consumer protection, data protection, intellectual property rights, etc. But regulation is not enough – enforceability of regulatory frameworks must be safeguarded to provide platform workers with adequate employment rights and decent working conditions. As it is likely that not all can be solved through legislation, this scenario recommends support for a stronger collective voice of platform workers.
From a more positive perspective, it acknowledges that platform work offers benefits to society – it is a potential tool for labour market integration, for instance. Such possibilities should be capitalised on – just not without considering potential negative side-effects.
Other scenarios assume quite substantial changes to the current situation and consider how various drivers of change might combine to shape platform work. For instance, what if platforms run as cooperatives or by public bodies had a foothold in the market and provided an alternative to the current shareholder-value-oriented platforms? We could see better working conditions and better service provision, extending into rural areas. What would happen if labour regulations clarified the employment status of platform workers or set minimum labour standards for all workers irrespective of the employment status? What would be the impact of subordinating platforms to the regulations of sectors that provide comparable services or establishing a specific trade regulation for the platform economy? This could help ensure that operators in the traditional economy were not squeezed out.
Capitalising on the opportunities
The European experience with platform work for the last 10–15 years, as well as Eurofound’s future scenario exercise, demonstrates that platform work is not a dystopia, nor is it some sort of labour market panacea. Rather, it is a continuously evolving mechanism for the exchange of labour for payment that will continue to attract clients and workers – not at least as an alternative employment form for those who will be affected by the economic and labour market crisis caused by COVID-19.
There are inherent opportunities in platform work to be explored and capitalised on. Policymakers and the market can influence its future development and create a win–win situation for all involved. How exactly to intervene will depend on political and market developments. Exercises like Eurofound’s scenarios project aim to assist stakeholders in thinking about what might be and what could be done, in an anticipatory and exploratory manner. This is important, as one thing is for sure – traditional approaches and business as usual are unlikely to solve the challenges ahead.
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