The gig economy — demonised for starvation wages, disempowered workers and eroding workplace rights — might be growing up.
Coles, Uber and the powerful Transport Worker's Union (TWU) have signed separate "charter" agreements with each other.
The Coles-TWU deal in particular promises fair rates of pay for on-demand drivers, a right to unionise and a way to arbitrate disputes, as the gig giant moves aggressively into the grocery delivery space.
While it's not quite a broad and detailed industrial agreement, like those signed by unions on behalf of nurses or teachers, it's a pivotal moment for the gig economy in Australia.
With 1.1 million workers — 8.3 per cent of the workforce — engaged as independent contractors, and a government elected promising minimum conditions for on-demand work, this might mark the apps starting to go straight.
"That might be a little bit optimistic," laughs Joellen Riley Munton, one of the nation's top labour lawyers.
"I think this will be the year when we begin having some proper conversations about feasible solutions to the problem."
A 'moment' for workers
TWU assistant national secretary Nick McIntosh sees the charter agreements as a beginning of a new phase in the gig economy, not an end to it.
"This is an exciting moment for the gig economy. Because we've got two market leaders here, both of who have signed world-first deals with the TWU."
With Coles that means "a commitment to make sure the lot of on-demand transport workers is lifted" and that drivers are compensated fairly for work done through the supermarket giant — even if they are "independent contractors" not specifically employed by it.
"This is a moment," Mr McIntosh says.
"And a golden opportunity for the gig economy and transport to now get its act together, set the standards and start improving the lot of these workers that do this crucial work."
Election promise
Although industrial relations wasn't a huge flashpoint in last year's federal election, the new government's agenda was laid out clearly.
A key promise was to enshrine "secure work" as an objective of the Fair Work Act — the laws around employment.
That would mean the Fair Work Commission (FWC), which sets the minimum wage and hears disputes between employees and employers, would have to put job security at the heart of its decision making, alongside existing factors like productivity and economic growth.
Labor also promised to establish minimum pay and conditions for gig and ''employee-like'' workers.
Now it's started consulting on what those laws will look like.
Gig versus employment
It's too late for Billy Bullseye Texas.
He worked for start-up Milkrun, which used riders to rapidly deliver groceries to city customers.
Despite securing $86 million in capital funding, the company was shuttered this month, ending the jobs of 400 employees like Mr Texas.
A key difference between Milkrun and gig economy delivery services like Uber is that it employed its staff: paying wages, superannuation and entitlements like sick leave, as well as providing bikes and equipment.
"They actually provided all the resources they needed, and they paid them properly. They were looked after really," Mr Texas says.
Uber defines the people doing deliveries through its app as independent contractors. It does not have minimum rates of pay and the contractors must pay for bikes or cars and their upkeep.
Mr Texas is scathing of the Uber model, which lacks support standard employees enjoy — like sick days or rosters.
"It definitely goes through a lot of people. It's not as sustainable for the worker. It's a business model that really favours profitability for the company," he argues.
"You just have to keep working, because otherwise you don't make any money."
Grocery shift and Uber growth
Australia's dominant supermarket brands operate their own online shopping services that are not covered by these developments.
This new Coles-Uber deal will see drivers park in supermarket car parks, enter stores to buy goods and then deliver them. Woolworths uses Uber for small deliveries, but in its operation supermarket staff pack the goods.
The Australian arm of Uber already utterly dominates the field of ride-sharing and is growing into a behemoth in food delivery.
"They're trying to gain as much market share as they possibly can," says IBISWorld senior industry analyst Nicholas Schroeder.
Companies like Uber are willing to run at a loss to build a dominant position. The exit of competitors like Foodora and Deliveroo has further consolidated that strength.
"The ride sharing industry on the online food ordering and delivery platform industry have been either making small profit margins or significant losses in the past decade," he says.
"Scale is a big factor for them. To operate sustainably over long term, they need to operate at a large scale where they have a large consumer base."
New gig?
The government is asking for submissions as it consults on what it calls "'employee like' forms of work".
Whether someone is an employee or an independent contractor was viewed by courts as a combination of factors: things like wearing a uniform, someone's "control and authority over work", their ability to delegate work and being responsible for their own tools were weighed up.
But recent High Court decisions shattered this "multi-factorial test" in favour of one that boosted the rights of employers.
You don't have to read between the lines to see how the government now views this distinction.
"Independent contractors are not entitled to the safety net of minimum conditions that applies to employees, with some limited exceptions," the consultation paper reads.
"Tony Burke MP, Minister for Employment and Workplace Relations, has described the effect of being classified as an independent contractor for some as 'falling off a cliff'."
The government has committed to three elements through the consultation process.
- Giving the nation's workplace tribunal, the FWC, new powers to set minimum standards for workers in "employee-like" forms of work
- Changing laws to give workers the right to challenge unfair contractual terms
- Getting the FWC to set minimum standards to ensure the road transport industry is "safe, sustainable and viable".
Fresh start
The bitter legal and legislative manoeuvring around classifications has meant the most important thing — the real day-to-day impact on workers in the gig economy — has been lost, argues Professor Munton.
"Up until recently we kept talking about whether these workers should be employees or whether they're independent contractors," she says.
"And then we pretend they're robust little entrepreneurs who can set their own terms and conditions, carry their own insurance, when really they're in the Wild West of commercial arrangements."
Rather, deals like the one between the TWU and Coles, and Uber and the TWU reflect reality, she says.
"This is beginning to recognise that a significant part of our economy now is relying on work provided by people who do this for their living. They're not really business people in any meaningful sense of the word."
And while the legal system says they're independent and not employed by Uber, Professor Munton says receiving minimum conditions for doing that work shouldn't be talked away.
"We cannot allow that new flexibility to mean that some people in our economy are simply on starvation wages and are not looked after in the way in which we've become accustomed to looking after workers over the past 100 years or so in this country," she argues.
'Ripe' for reform
The union's Mr McIntosh agrees, pointing to a study of 1,000 gig transport workers. The work was a full-time job for half of them, but two-thirds of the group were earning less than the legal minimum wage.
"This is the time to say let's put the standards in place," he says.
"The time is ripe for reform. We've got the top end of town saying the time's right, we've got the platforms that are doing this work in the transport industry saying, 'now the time is right'. This is the beginning of the next step."
Uber wants 'modern legislation for modern work'
In a statement, a spokesperson from Uber welcomed the consultation process around future laws for on-demand work.
"The government's workplace reforms are a once-in-a-generation opportunity to pass modern legislation for modern work," it reads.
"We have long supported reform that improves benefits and protections for gig workers across all platforms, while preserving the flexibility they tell us they value.
"The freedom to choose how and when to work is a cornerstone of the gig economy, and there’s no reason this can’t come with better protections under the law."
