Taking Us For A Ride - What Happens Next? podcast on the gig economy

Susan Carland:

Welcome to another episode of What Happens Next? I'm  Susan Carland. The COVID-19 pandemic has shone an unflattering light on our reliance on gig economy workers, with stories of people working numerous jobs across multiple workplaces unwittingly spreading the coronavirus. Numerous drivers being killed while delivering food on bikes and scooters have brought into sharp relief the impact of the gig economy. But long before COVID-19, gig workers were facing dangers and drawbacks from which others are largely protected. What happens if we fail to reshape our economy post-COVID and continue to rely on gig workers? Are there any advantages to the system? What are the opportunities to change it for the better and how do we ensure workers are not being exploited and their lives endangered? In this episode, Monash expert, Greg Bamber explains the pitfalls of the gig economy and why workers deserve better protection.

Greg Bamber:

Hi, my name's Greg Bamber. I'm a professor in the Department of Management in Monash Business School. And I'm also the director of an international consortium for research on employment and work, which is part of the Centre for Global Business in the Monash Business School. And I work with employers, workers, unions that represent them, governments, international agencies, like the International Labour Organisation, doing research and providing advice and education in aspects of work and employment, as well as the gig economy.

Susan Carland:

Professor Greg Bamber, thank you for joining us.

Greg Bamber:

My pleasure.

Susan Carland:

How do you define the gig economy?

Greg Bamber:

A narrow definition is that it's the part of the economy that's run off platforms, which you might access on your mobile phone. And this could be a platform for hailing a ride-share from here into the city centre, or it could be a platform ordering your food to be delivered to where you live in time for your next meal, or seeking an Airbnb accommodation for your next holiday, if we're allowed to travel, when you wish to travel. So that's one approach, the gig economy, it depends on platforms that you might run off your phone.

And that's a very narrow definition, there's a much broader definition of the gig economy to include people working in what might be called non-standard jobs or careers where people don't have a secure job, they're not in a career. So on the narrow definition of a gig economy, it's relatively small in terms of the numbers of people working in that sector, at perhaps around 7% in Australia of the workforce might be working in that way. 

Susan Carland:

I don't know if moral panic is the word, but there is certainly social agitation about the gig economy at the moment. People are really talking a lot, there's a lot of conversation in the media about how it's exploitative and dangerous. If this is something that's always been with us, why do you think we're having this conversation now?

Greg Bamber:

People are working in the gig economy and their boss is an algorithm. How can you talk to an algorithm? How can you negotiate or discuss with an algorithm that you've got particular preferences about your work because you've got childcare responsibilities or you're caring for an elderly parent or someone else? What does an algorithm know or care about that particular context for your work? That's one reason why there's concern.

A second reason is that the platform employers, although many of them are based in Silicon Valley in the United States, if you look carefully on their website, you'll find they're registered in some kind of tax haven, it might be the Republic of Ireland, or it might be the Cayman Islands, and they're not paying tax in Australia. They, in some cases, are immensely profitable, but they're avoiding their social responsibilities to pay tax here, which supports our health and education systems and our roads and public transport and other aspects of infrastructure.

And then also, from a worker's point of view, if a worker has a concern about the health and safety conditions, they find it, in some cases, quite difficult to address those concerns. There've been a handful of people killed on our roads in very recent times, driving their scooters or their motorised bikes, delivering food for people. And it's not difficult to understand why there should be concern. There's a lot of discussion on social media about these sorts of situations.

If you're a customer and you're not satisfied, you've paid the money for your food to be delivered and you want to take it up with the food delivery company because you've got the wrong order or you haven't got everything you've paid for, it's often very difficult to find a phone number that you can actually talk to a person. You just have to, in some cases, put in a message which may or may not receive a response, certainly may not receive a response very quickly, not while you're hungry, getting food that doesn't suit your particular dietary requirements. Now I don't wish to damn all of the platform providers with this sort of criticism. Some of them are very responsible and responsive, others are not. So there's a wide variety of providers of goods and services in the gig economy.

Susan Carland:

Do you think one of the differences between the gig economy, let's consider the narrow definition for now, the narrow definition of the gig economy that we have today compared to, say, the earlier examples you gave of trying to get the boss's attention for picking wheat or going on the ship is that now we have the brokers, which are the apps, they are the people or they're organisations that join between either the restaurant selling the food or the person that wants the work done and the worker. And they're taking a very large slice of the pie for themselves. Whereas with the examples you gave in the past, it was employer going straight to employee. So all the money for the work was actually going to the employee. It still obviously had dangerous and exploitative aspects, no doubt, but it's the, at times, predatory nature of these apps who skim off huge amounts of money for themselves, who are actually not doing any of the work, that seems to be different now.

Greg Bamber:

That's right. And the platform companies, some of them are making big profits, some of them are not, some of them are making losses and it's a strategy for them to make a loss because they're trying to keep their costs down. They're in a race to the bottom in terms of providing the share of the income, both to the restaurant, for example, on the one hand and the delivery rider on the other hand. But they're trying to keep their prices low for the time being to drive out competition. And then once they are a monopoly in the market, they'll raise the prices. They're also possibly making a loss because they're going to do a public offering of their shares. And it's advantageous from a tax point of view for them to be seen to be making a loss for the time being.

There's also concern because there's a degree of wage theft taking place. We have in Australia and many other countries, a legal minimum wage that people should receive per hour, for example. Now, many of the gig workers are not receiving the legal minimum wage in practise. Now the platform employer may say, "Oh, yes, they are because this is how much they're paid per delivery." But they're not taking into account the fact that the delivery rider often has to provide their own scooter or their own motorised bike or ordinary bike. They've got to pay for the service of it. And also spending a lot of time hanging about outside the restaurant, waiting for the order. And if I'm a rider and I make a complaint about unfair treatment I've been given because of a health and safety issue or because of a payment issue, the platform provider can simply cut me off immediately. There's no appeal against unfair dismissal, there's no procedure, there's no union in most cases-

Susan Carland:

That's what I wanted to ask. Is there a union for gig workers?

Greg Bamber:

Well, some unions are now recruiting gig workers, in the transport sector, for example, the Transport Workers Union, the TWU has been inviting gig workers to join. In the retail sector, and some other sectors, there are either traditional unions, which are opening branches for gig workers, or in some cases, there are new unions springing up trying to recruit and represent gig workers. But it's not easy for unions to organise these people because they're not all-

Susan Carland:

They're not in one spot, they're not in a factory or an office. What are some of the good aspects of the gig economy?

Greg Bamber:

Well, a good aspect of the gig economy, say, for a small business point of view, if you're running a small business and you need a software developer or someone to produce a website for you and you're in a regional location with no one with those skills available to help you, you can get onto a platform and find someone who may be located in India or the Philippines or Uzbekistan, who's got those particular skills and you can connect with them using a gig economy platform, and they can provide the service you need on a short-term basis. You may only need them to work for you for a few hours or one day, and they can provide that. And that is providing some income for them in possibly a Third World location, which is distributing some income from a relatively rich country to a relatively poor country. So, that's a good aspect of providing greater connectivity, if you like.

Susan Carland:

Let's look into the future. Imagine if the gig economy continues as it is or even accelerates, what does the future of work look like in 50 years? What would be the impact on society, the economy, the worker?

Greg Bamber:

In 50 years, young people graduating from universities like Monash are much less likely to look forward to working in a career for a major employer. They're going to be juggling different jobs. They're going to be changing jobs and changing their little mini careers because we're going to be in a period of rapid change and development in our economy. We're seeing quite a brave new world in terms of careers in the future and patterns of jobs in the future, very different from more recent generations.

Susan Carland:

Are you worried about the future of employment when we consider the impact and role of the gig economy?

Greg Bamber:

Yes, I am worried about the future of employment, because I like to see people having the opportunity for decent work and some degree of job security and not simply recruited just for a gig and then dispensed with and left to fend for themselves. And one issue with the gig economy is it can lead to powerful gig economy providers engaging in a race for the bottom saying to you, "Well, I've got other people who are willing to work for $2 an hour in a Third World country. If you want to keep the job, you've got to compete with them." And you might say, "Well, look, I can't live on $2 an hour. It's not legal in Australia or in the country where I live to be provided with only $2 an hour." But the gig employer may be able to pick up people to compete with you in other contexts.

Susan Carland:

These systems always have to rely on a class of people who are in some ways desperate. You will only put up with the precarity or the dangerous situations or the lack of training or the rubbish pay if you are desperate. And is a system that is fundamentally built on other people's desperation, can it ever be reformed?

Greg Bamber:

Well, it can be reformed, the system built on other people's desperation, through effective regulation. And we're seeing a whole new class of people that have sometimes been described as the precariat who're working for very low wages and they're working for, in some cases, big platform enterprises that are making huge amounts of money, that are making their owners and founders some of the richest people in the world. So we're seeing a growth in inequality in some countries. The United States is a prime example, if you like, where we've got trillionaires on the one hand and people who are homeless on the other hand.

Another aspect of the gig economy, which I think needs reform is the notion of surveillance. So people working in the gig economy, some of them are being subject to unethical forms of surveillance. Whether they're working on a computer, their keystrokes are being counted, whether they're working in a call centre or delivering food or providing care for people in their homes, some of the most vulnerable people they're told that they can only provide 30 minutes of care to you and then they've got to give another 30 minutes of care to him.

I would like to see, as well as the sharing economy that we are told is the expression for the gig economy, a notion of a caring economy as well, also providing care for the people who are most vulnerable, care for our students and people in hospitals and so on. So it's not all about the economic advantage of having a gig economy, which is maximising the profits for those who are setting up platforms, minimising the pay for those who are working in the platforms, and the consumers may suffer along the way. Let's have more of a caring economy as well as a sharing economy. And the two are not mutually exclusive. We can use some of the valuable platforms to provide a more caring economy.

Susan Carland:

Professor Greg Bamber, thank you so much for your time today.

Greg Bamber:

My pleasure.

Susan Carland:

Chandra Shah studies the impact of the gig economy on a variety of groups. He reminds us that while the gig economy is not new, worker's rights are being increasingly eroded. Here's Chandra.

Chandra Shah:

I'm Chandra Shah. I worked at Monash, the last permanent job I had, in the Centre for the Economics of Education and Training. Since I retired from Monash, I've been and as a consultant on the gig economy and some work I do on a pro bono basis.

Susan Carland:

Chandra, welcome to the podcast.

Chandra Shah:

Thank you.

Susan Carland:

It's really nice to have you here. And I want to start by asking you, how would you define the gig economy?

Chandra Shah:

In a broad sense, the gig economy includes all those people who work on a temporary contract. And usually it's precarious work, short term. And often, sometimes they call it freelance working. Contemporary definition of the gig economy is one where the relationship between the supplier of the service and the person who's consuming the service is mediated by an app or a platform. The origin of the gig economy comes from when musicians were doing gigs. So, that's where the name comes from and it's been taken over by the platforms and the apps now.

Susan Carland:

If you cast your mind 50 years into the future, and the gig economy continues to grow at this rate, what does Australia look like?

Chandra Shah:

It's difficult to stop progress. So the whole trend is towards breaking down jobs into little tasks. And the smaller the task, the better. And then, at the same time, to see which of these tasks can be automated. So whatever can't be automated is given to people to do. Now, the problem... One other thing I didn't mention about the gig economy is there are two kinds, one, which you deliver physically like the delivery drivers and those people, the other one is remote delivery, where the supply of labour is global. And because there's an over-supply of labour, the prices are very low for that, and the conditions are pretty poor, especially for people working in developing countries.

Susan Carland:

It seems almost like we're preying on quite vulnerable people. I remember during the pandemic, I had some friends who had previously worked as a nanny and doing domestic cleaning. And of course, when the pandemic hit, they weren't allowed to do any of that. They're both here from overseas and the only work they could get was Uber delivery. It was literally their only source of income. There's quite a desperation that drives getting that work. Is that part of the problem with... The gig economy maybe isn't, as it's traditionally been, in and of itself, always been necessarily a bad thing. But at the moment, when we are only really utilising quite vulnerable people, there's no training, there's no skills development and it's quite precarious, is that part of the crux of the problem?

Chandra Shah:

I think it's part of that. And the other part is... So if you go back to the origins of the platform-dependent gig economy, it started off with Uber and Airbnb. And the way it was promoted was that, "Ah, this is a little bit of side money, pocket money you can make. You got a couple of hours, you do a bit of driving with your own car and supplement your income."

Susan Carland:

It's a side hustle, it's not your main job.

Chandra Shah:

Yeah. And same with Airbnb. "Oh, you got a spare room, you could just use that to get a little bit of spare income." But it has mushroomed into a much bigger thing where people are depending on the main income from this kind of services. The other thing about the gig economy is that it is moving so fast that the regulations can't keep up. And sometimes, the regulators and the government are unwilling to intervene in the market. And I think that's one of the biggest problems, that you are so far behind in terms of regulations that as soon as you've developed the regulations, they've moved on to another thing, they've found another loophole.

And also because these platforms are often resident in tax havens and things like that, it is very difficult to catch them. One of the ways you could try to level the field a bit would be to get the gig worker, especially the vulnerable ones, to collectivise or unionise, so get the unions to sort of recruit them and to represent them, because the power relationship is otherwise unequal. And you can't rely on the government to do this because they're not on the ground to see what's happening or the abuse or whatever exploitation... The government can't see that or Fair Work Australia can't see that unless the union and the union reps are there talking to the workers on a constant basis. That's the only way you're going to catch this sort of thing.

Going back to your original question about what do I see in 50 years time? I think because of the global nature of work and global competition and the march of technology with automation and artificial intelligence and things like that, there'll be a constant push to break down jobs into tasks. It's much easier to control people if they're only doing tasks, than if they're doing a job. I think there are negative things in terms of people doing just simple tasks and doing in isolation of other workers, in terms of the social networks and social isolation and things like that. I don't know whether gig workers will be able to socialise in cafes and things like that while they're waiting for the next task, whether that is really possible and whether that works or not. Those networks that we built around work, which are very important for mental health, are going to break down unless we do something.

Susan Carland:

Professor Chandra Shah, this has been very enlightening. Thank you so much for your time.

Chandra Shah:

Thank you.

Susan Carland:

That's all from us this time. We'll be back with another episode of What Happens Next? to find out how one very busy Monash undergrad is helping young people hack the gig economy to become entrepreneurs and tackle youth unemployment at the same time.