4.1
This chapter discusses the impacts of on-demand platform work, focussing on:
pros and cons for workers and businesses;
impacts on individuals, families and communities; and
its broader economic impacts.
Pros and cons for workers and businesses
4.2
Submissions and evidence received by the committee point to a wide range of impacts of the on-demand work on individuals, families, businesses, Australian society and economic confidence and growth.
4.3
Evidence provided to the committee pointed to a range of common impacts of gig work, across a range of sectors. As the Recruitment, Consulting and Staffing Association noted in its submission:
This distortion has created an uneven playing field in the marketplace, making labour sourced through these platforms cheaper than that sourced through staffing agencies, who meet worker protections and standards under the NES [National Employment Standards] and modern awards.
Increased flexibility
4.4
The desire for flexibility in the labour market was a common theme across a wide range of submissions from individuals, business organisations, employer and industry lobby groups.
4.5
For employing entities, flexibility enables them to respond quickly to changes in demand, funding (including government funding), business requirements, the need for different expertise and skills, changing relationships, and the ability to rapidly deliver new products and services.
4.6
Amazon Flex highlighted the new opportunities it has been able to offer:
Amazon Australia is also proud of the support that it provides to over 10,000 Australian businesses who are now selling direct to customers through our online store. These businesses offer employment opportunities for Australians and we are proud to play a role in their growth and success. Globally, more than 58 per cent of Amazon's unit sales come from third-party selection … This saves valuable time and money for businesses as they no longer need to individually purchase shipping materials, pack orders, store products, and make multiple trips to the post office.
4.7
Mr Peter Scutt, Chief Executive Officer of Mable spoke with the committee about the opportunities of new markets and the value of platform–based services to respond flexibly, especially in 'thin markets' where there is a gap between the needs of the participants and the services available (because of geographic location, insufficient workforce, specialised needs, and/or high costs of providing a service, for example).
4.8
Furthermore, Mr Scutt outlined how Mable has enabled local and
community–based support and services for people requiring personal care services, providing choice and more personalised services with safeguards for consumers, and providing work and training opportunities for workers.
4.9
In its submission, platform provider Hireup noted that companies engaging workers flexibly as independent contractors have lower costs than those engaging workers as employees, creating a two–tier system which it believes is not sustainable in the longer term:
There is also a commercial reality. Companies engaging independent contractors have lower costs than a company that employs its workers, as Hireup does. Payroll tax, superannuation, compliance and employee training add up. We believe everyone in the sector—be they small care operators, the large, traditional, not-for-profit providers, or the new crop of modern, tech-enabled platforms—should share similar responsibilities and obligations.
4.10
Maurice Blackburn Lawyers and the Victorian Trades Hall Council expressed concerns over the competitive advantage of platforms which do not engage their workers as employees and the longer term impacts of this flexibility. Dr Carina Garland explained:
On the origins of the gig economy, it is really a way to compete and avoid the obligations that I think we recognise in a country like Australia—and indeed in the international standards of labour—are due from the employer to the employee. We've seen the competitive advantage arise when people create models and systems of work that are specifically designed to avoid those obligations. So, clearly, when … we've got this environment where we've got good employers having to compete against bad employers, that's not an equal playing field in terms of the way businesses are able to succeed.
4.11
Evidence presented to the committee about the impact of flexible platform services on service quality and business sustainability varied. Mable submitted that its consumers are receiving high quality services, have more choice, and flexibility to discontinue services where they are not satisfied:
All of the indicators we have, from the growth of the business to ratings and reviews and NPS scores, show that there are high-quality outcomes from a model like this. In fact, the evidence from users of the platform is that there is a stark difference between their quality experience versus using platforms like ours and they've experienced using traditional providers.
4.12
However, the ACTU contended that gig work has had a negative impact on service quality with very real impacts for consumers, a view supported by Mr Lloyd Williams, National Secretary of the Health Services Union:
… [the aged care royal commission] examined Mabel and they examined other platforms, and the royal commission found them to be a safety risk and inappropriate in care work. Commissioner Briggs has made a recommendation for better labour standards and direct employment in order to deliver better quality outcomes for vulnerable people in the aged-care services. They raise real questions of risk and outcomes for recipients as well.
4.13
The Victorian Government's national survey found that the key motivation for working on-demand related to flexibility. For individual workers, platform work can provide autonomy, allow them to access new work and income opportunities, and quickly access employment—while balancing study, caring, travel and other commitments. It can also provide options for people with health problems, or for people living with a disability.
4.14
Ai Group's submission summarised it this way:
Platform work provides many benefits to workers. Individuals who wish to work flexibly around other commitments, such as studies, recreational activities, family commitments or other forms of paid employment often find the experience of working via online platforms, a useful and convenient way of earning or supplementing income.
4.15
Uber shared this view and provided supporting statistics in relation to its rideshare and food delivery workers:
78 per cent of driver–partners signed up to Uber because of its flexible opportunities—and three in five would not work at all without the flexibility the app provides …
The flexibility of Uber Eats also allowed delivery people to engage in other activities such as studying or other work. Four in five delivery people indicated they were working at least one other job, while 34 per cent were studying simultaneously;
Uber's own recent survey with over 16,000 drivers and delivery people across Australia, found that flexibility and independence offered by the Uber app was the top area of satisfaction, with 94 per cent of respondents rating it as good or okay.
4.16
For some workers this flexibility suits their particular needs at a point in time:
This … view can be explained, for example, by their life stage and their relative labour market position, as well as reflecting the poor quality of insecure work in other industries (e.g., in hospitality, retail or horticultural industry) making 'gig' work relatively appealing.
4.17
Gig workers clearly appreciate the flexibility that platform work provides, but are less satisfied with associated lower earnings and fewer conditions.
Mr Moreland, a food delivery driver told the committee:
I've been a food delivery driver for four years now. I got into the work after returning to study as a mature–age student. I liked it and went for it because it was very flexible work, which fitted around a full–time study schedule. However, after starting it, I was quickly amazed by the lack of rights and the ever–declining pay rates in this style of work.
4.18
A number of witnesses and submissions from individuals and worker advocacy groups contended that the flexibility of platform work is largely one–sided, with platform providers reaping the benefits while workers carry the risks:
'Flexibility' is a term used to describe insecure work conditions: it is often portrayed as offering benefits to workers and employers equally, but in practice, the concept is sold to employers by labour hire companies as a way to reduce the 'ongoing burden of fixed costs'…it is of far greater benefit to business owners than it is to workers.
4.19
Other submissions noted the importance of flexible arrangements to consumers in a variety of respects, including their ability to access services when and where they want. This has been accentuated since the start of the COVID-19 pandemic and the boom in food delivery services. To a lesser extent this was expressed in submissions relating to personal care services:
… it is also important to recognise the importance of flexible employment from the perspective of a self–managing NDIS participant … I have a physical disability and rely on care 24/7 that is carried out by both casual and contract staff. Without these staff I would not be able to survive … because of the work they do, I am able to live a good life in the community, work, contribute to Australian society and pay taxes. Support workers are integral to my life and their job satisfaction and job security are very important to me … In my experience, flexible employment arrangements can benefit both parties.
4.20
It was anticipated that the number of gig workers would increase following the start of COVID-19 and the loss of work in other sectors. Based on figures provided by Uber, this appears to have occurred, with nearly 60 per cent of workers joining a delivery platform during COVID-19 to support themselves financially.
Reduced earnings and fewer conditions
4.21
Obtaining gig work can be highly competitive, especially where there is a labour oversupply or participant numbers are not capped, and can result in a 'race to the bottom', with workers competing on price and sacrificing income and conditions. There is some evidence that commissions taken or fees charged by platform providers have also increased over time, decreasing take‑home earnings for workers.
4.22
Ms Lori-Anne Sharp of the Australian Nursing and Midwifery Federation told the committee that, in relation to platform work:
Allowing independent contractors to set their own rates is going to see workers competing against each other in an environment where they'll be caring for people's lives. This will just be an absolute race to the bottom, and we will see even more people, in the here and now, not being able to survive and have more precarious work, but also into the future as well.
4.23
Evidence about the income of gig workers was heavily contested, with evidence varying across sectors and across times of the day, depending on demand for services. It was also complicated by varying calculation methodologies, whether or not expenses were deducted or not, whether waiting times were factored in, and the difficulties for platforms of calculating total income for gig workers working across platforms.
4.24
Dr James Stanford, economist and Director of the Centre for Future Work at the Australia Institute, noted that:
… the vast majority of them [rideshare workers] do not make the minimum wage. Some of the studies that the companies themselves have put out in that regard, claiming that people are willing to do this because they appreciate the flexibility, I have found very misleading and their methodology to be very suspect.
4.25
Mr Matthew Denman, from Uber, referenced a report by Accenture into earnings on the Uber Eats platform stating that the study found that earnings peaked at meal times, with drivers are earning over $21 per hour, after costs (including their wait time). Ola also quoted earnings of $21 per hour after costs.
4.26
The Accenture report found that Uber Eats delivery workers in Sydney record average pre–cost earnings per hour of between $22.65 (bicycle), $23.48 (motorcycle), and $24.04 (car). Accenture suggested that pre–cost earnings for workers is likely slightly higher, up to an extra $2.41 per hour, given that many workers use multiple apps.
4.27
The report also found that costs to gig workers vary, with Sydney–based workers incurring costs per hour of between $0.77 (bicycle), $1.51 (motorcycle), and $3.30 (car), inclusive of onboarding, depreciation, maintenance and fuel or electricity. Deducting costs from earnings gave actual hourly pay rates for Uber Eats workers during key mealtimes of $20.74 (car), $21.97 (motorcycle), and $21.92 (bicycle).
4.28
Uber noted that rideshare earnings are more consistent across the day and week, although Mr Dominic Taylor from Uber noted that 'I spoke to a driver two Saturdays ago, and he said: 'It's the best Saturday I've had in a long time. I made $600 in Sydney after costs.' So there are certainly key times.' Mr Taylor submitted that the majority of drivers earn, on average, over the minimum wage over a two week period, with many earning over that, and closer to $45 per hour in engaged time.
4.29
The Transport Workers' Union of Australia (TWU) estimated that rates are '$3 or $4 below the minimum rate [national casual minimum wage of $24.80 per hour] before costs are put into play'.
4.30
In its submission, the TWU provided the results of two surveys conducted in 2020 in conjunction with the Delivery Riders Alliance and the Rideshare Drivers Network.
4.31
These surveys returned results showing that actual hourly rates for food delivery workers were $10.42 after costs and that 74 per cent of workers 'struggle to pay bills and buy groceries'. The surveys also demonstrated that rideshare drivers are earning an hourly rate of $12.85 after costs.
4.32
The TWU also found that costs for delivery and rideshare workers were higher than that estimated in the Accenture report—for example, between $4.93 and $5.60 per hour for scooter and car, not including variable fuel costs. It estimated that expenses accounted for approximately 30 per cent of the gross earnings of these workers. The TWU accounted for some additional costs, including mobile phone, GST, vehicle ownership, running costs such as fuel, maintenance and repairs, and standing costs such as registration, licences and insurances.
4.33
Research by Dr Caleb Goods, Dr Tom Barratt, Dr Brett Smith, Mr Rick Sullivan and Dr Alex Veen, found that a significant proportion of food delivery workers average earnings are below the minimum wage, as illustrated by Figure 4.1.
4.34
The Rideshare Drivers Association of Australia (RSDAA) emphasised the long hours of work needed to meet the minimum wage:
RSDAA estimates rideshare drivers must work an average of 53 hours to reach the hourly minimum wage as drivers are currently underpaid during regular business hours. In regional regions of NSW, RSDAA suspects there would be not be enough allocated jobs to reach the minimum wage threshold.
Earnings increase during peak traffic times, in built up areas and this is causing a variety of other issues including excessive traffic congestion, lack of legal pickup/drop off locations, driver fatigue & other safety concerns.
4.35
Mr Esteban Salazar, a food delivery worker, told the committee:
I had to wait many hours to get one delivery, and I didn't have a minimum wage for an hour, which meant that, at the end of the day, I had earnt $15 after six hours of standing outside in the cold and the rain. I think that's very unfair. First of all, it's not my responsibility to bring deliveries to the company. My responsibility is to be in the streets, waiting for the job that they will give me.
4.36
Mr Assad Manzoor told the committee that his earnings were much less than estimates provided by Uber Eats, and that long hours working on the platform may only translate into limited income during busy periods. Mr Moreland confirmed that earnings were more like $15 or $16 per hour and that earning capacity is limited to between three and five hours a day, during busy periods.
4.37
Evidence provided to the committee by the TWU stated that drivers working for Amazon Flex are receiving $15 to $20 per hour, after costs, also below the minimum wage and claimed that studies of Amazon Flex in the US also show earnings 'well below the minimum wage' after considering expenses.
4.38
Earnings appeared to be variable in the care sector. Disability care sector platform provider Mable told the committee that it typically pays hourly rates of between $30 and $45 (before the service fee, insurances, superannuation), with a minimum rate of $25 per hour.
4.39
While this rate is above the minimum wage, it means that some workers earn less than the minimum casual rate for their relevant award.
4.40
Hireup told the committee that the starting hourly rate for its workers is $31.52 for Monday to Friday shifts, with superannuation paid on top of this rate. It also advised the committee that there is a single classification for Hireup employees and that penalty rates are also paid on top of the starting rate, giving support workers an average rate of $41 per hour. This rate includes superannuation, and penalty rates for the different shift times across a week, including evenings, weekends and public holidays.
4.41
The Australian Services Union (ASU) stated in its submission that Hireup casual workers have told the ASU that they believe they are not paid properly and are classified as home care workers in the SCHADS Award rather than disability support workers. This classification was later confirmed by Hireup in response to written questions on notice. This is a difference of several dollars per hour, and also excludes the workers from the benefits of the 'Equal Remuneration Order' that the Fair Work Commission applied to the disability sector. The ASU further noted that those benefits are factored into the funding that providers receive from the National Disability Insurance Agency.
4.42
In most cases, gig workers are not engaged as employees and do not typically receive basic entitlements that come with a standard employer-employee relationship, such as:
minimum rates of pay, including under specific awards, shift and casual, loadings, and penalty rates;
workers' compensation and other insurances;
annual and personal (including sick) leave; and
workplace health and safety law protections.
4.43
Additionally, because they are not usually employees, gig workers may be unable to access, or may not have the same level of access to, other labour protections, including:
dispute resolution protections, including for unfair dismissal;
anti-discrimination protections; and
anti-bullying and sexual harassment protections.
4.44
The committee notes however, that the anti-bullying provisions in the Fair Work Act 2009 (section 789FC(2)) rely on the definition of 'worker' at section 7(1) of the Work Health and Safety Act 2011, which is much wider than the common law definition. The existing use of this more widely defined term supports the case for extending the definition more broadly in the Fair Work Act.
4.45
A 2019 survey by the TWU found that 94 per cent of respondents erroneously thought that these entitlements and protections applied to platform workers—when in fact they did not.
4.46
Mr Kamal Farouque, Principal Lawyer with Maurice Blackburn Lawyers told the committee that:
… our system of laws essentially allows engagers of workers, hirers, to devise arrangements, which are essentially employment avoidance mechanisms, to prevent the workers from receiving the protective benefit of arrangements under the Fair Work Act. There is a need to adopt one or both of those methodologies to ensure that vulnerable workers, particularly in the gig economy, receive adequate protection.
4.47
The TWU stated that as it currently stands on-demand workers are more vulnerable to exploitation, adverse working conditions and unfair treatment with fewer options for redress. The committee heard evidence that workers who raised issues about their engagement and conditions were branded as 'trouble makers', and were suspended or banned from platforms or received significantly reduced hours. Other witnesses thought that workers may not have the means or confidence to take their case further:
The lack of effective protections for vulnerable workers in the gig/on-demand/digital economy is intolerable. We see there is an urgent need to regulate digital platform operators to ensure workers are receiving a decent income, have safe working conditions and have access to prompt and low-cost options to resolve workplace disputes.
4.48
On-demand workers receive less work-related training, skills development and education than traditional employees. As discussed above, this has implications for worker and client health and safety; however it also has wider capability implications.
4.49
Capability development is important to workers in insecure work. Without training, skills development and education opportunities that provide career pathways and lead to economic security, these workers face reduced job satisfaction and an ongoing cycle of precarious work. This is particularly so for vulnerable workers—migrants and permanent residents, older workers, youth—who may be low-skilled, may not have qualifications that are recognised in Australia, or who may be changing careers. The Brotherhood of St Laurence observed that:
It's absolutely about the investment in the individual—for young people to have that investment from someone, and it's for employers as well, in fact, where they have positions and they're able to invest in a person, develop them and get the best for their business. The work that we're doing is about working from both ends: helping employers see the value in creating an entry-level role that can allow the worker to have exposure to the different types of work available within the business and then have some pathways that may allow them to progress. It may be that they go on to another employer, but that investment from an employer as well as from the young person will really help them succeed in that position, as well as into the future.
4.50
In some sectors, such as aged care, workers have access to some training but are often expected to complete it in their own time and at their own cost. Workers who do not complete the training may be penalised by losing shifts or being placed on reduced hours.
4.51
An unskilled workforce also has implications for consumers. For example, over the next 20 years, Australia will require increasing numbers of skilled staff to care for its growing ageing population. However, if investments in training, skill development and education are not made now there will not be sufficient numbers of qualified or experienced workers to draw upon.
Committee view
4.52
The committee acknowledges that gig work offers flexibility, which allows both businesses and gig workers to respond to the changing demands of business and personal life. Notwithstanding this, the committee feels strongly that the current arrangements, conditions and pay rates for gig workers are not acceptable and do not provide them with sufficient income and other protections to provide for themselves and their families.
4.53
The committee considers that it is essential for gig workers—and all workers for that matter—to be paid at a rate that rightly recognises the value of the work that they do, that they are provided with other conditions that ensure they do not have to work when they are sick, they are safe at work and their families are not left destitute when they are injured or killed, that they are paid superannuation to underpin a financially stable future, and that they can access other labour protections providing dispute resolution and mechanisms for addressing discrimination and harassment. Options for reform are included in Chapter 6.
Unsafe work
4.54
While work, health and safety legislation provides some protections to on‑demand workers, the extent of these protections are dependent on whether the platform owes a primary duty of care in addition to a range of other factors.
It is clear that safety is a significant issue for many on-demand platform workers. A TWU survey of food delivery drivers found that nearly 47 per cent of workers had been injured at work or knew someone who had been injured at work.
4.55
Early safety audits by the TWU of Amazon Flex's distribution centres in Australia identified numerous complaints of overcrowding and overloading from drivers, to the point where their rear vision was completely obscured, with drivers who refused to fill their vehicles receiving a warning. These drivers also face injury or death resulting from fatigue and speeding to meet deadlines. Due to the nature of their work, the committee also presumes that these workers are at risk of manual handling injuries.
4.56
As well as being at risk of serious injury or death, gig workers also suffer abuse and assaults at work, are at higher risk of experiencing sexual harassment, and suffer discrimination at work. Figure 4.2 shows the results of the TWU rideshare driver survey, highlighting the extent of these issues:
4.57
WEstjustice stated that:
Our [on-demand work] clients were frequently injured at work, experienced discrimination and sexual harassment … They faced uncertainty about their legal status and rights and, despite being some of Victoria's most vulnerable workers, they received limited protection from the law and limited assistance to enforce what rights they did have.
4.58
The TWU submitted evidence that the levels of harassment, assault and abuse are high. It told the committee that 66 per cent of rideshare drivers have been subject to some form of harassment, 17 per cent have been physically assaulted, 44 per cent of female drivers have been sexually harassed, and 40 per cent of drivers have experienced racial abuse.
4.59
WEstjustice also noted that the discriminatory behaviour at work has caused 'significant psychological injuries' in some cases, and had longer lasting impacts. They provided the example of rideshare driver 'Irini':
Irini came to Australia as an international student and worked as a driver for a ride-hailing company. She was engaged as an independent contractor. Although Irini did not have a car, she was able to rent one from a company that had a contract with the ride-hailing company.
One night when Irini was working, she received a job to pick up a group of male passengers. When Irini arrived the men were noticeably intoxicated. While Irini was driving, one of the men started to climb through the sunroof of the car, causing significant damage. Irini stopped the car and the man jumped out. At this stage all the men, except for one, got out. The man that stayed began to sexually harass Irini, saying things to her like 'do you want to kiss me?' which made Irini feel very uncomfortable.
Irini reported the incident to the company she worked for. They refused to cover the full cost of fixing the car, leaving her with a considerable debt to pay. Instead, they offered her a small amount of money on the condition that she would make no further attempts to claim money from them. The company also refused to take any steps to identify the passengers who damaged the car and sexually harassed her.
4.60
One respondent to the TWU survey noted that they had been subject to 'multiple threats with a knife multiple grabbing and punching', while another driver said that they had:
… been called a black *** by passengers while working in QLD even though I told them that I was from Sydney and Australian and the rest shouldn't matter.
4.61
In its submission, the Rideshare Drivers Association of Australia (RSDAA) told the committee that:
To some degree advancements in GPS systems and smart phone technology protect drivers as the identification of passengers ensures more civilised behaviour, nevertheless behavioural issues are still a problem and the physical security of drivers remains an issue and one that is not being dealt with by any practises or governing rules.
4.62
RSDAA also noted the 'additional … and unnecessary stress to the workplace environment of drivers' because some passengers manipulate the ratings system, engaging in unsafe acts, bullying and sexual harassment, endangering the lives of drivers and the safety of their property.
4.63
Professor Riley Munton noted that there is a connection between wages and conditions and safety:
… particularly in areas like transport work, there is a connection between wages and conditions and safety, because, if you're not going to earn very much for the time that you're working and you're not going to be paid any waiting time, then you'll be in a much greater hurry and will have anxiety to get the job finished so that you can then clock on for the next one. That can contribute to poor safety. We saw that in the heavy vehicle industry decades ago and we're seeing it now.
4.64
On-demand work can be unsafe for a variety of reasons, including:
the work environment—for example, inadequate road and path infrastructure, and lack of supervision;
the nature of the work being done—such as working long hours, riding a bike in heavy traffic or wet weather, driving intoxicated clients, and fatigue;
unsafe models of work which encourage workers to take short-cuts to maintain their competitive edge–for example, ignoring traffic signals, workers having to take multiple jobs to maximise their income, and platform algorithms penalising workers for performance;
lack of safety equipment.
4.65
Platform providers have a variety of systems in place to address health and safety issues including safety management systems, policies and guidelines, training programs, worker complaints assistance, provision of rider safety kits, and communications with workers:
We do a lot of driver education for our drivers. We enrol them in various modules, including disability awareness and anti-harassment. We also have policies and guidelines which are safety related. We do a lot in terms of reviewing and investigating safety complaints from a driver's point of view as well as a customer's point of view.
4.66
A number of witnesses observed that, while platform providers say they do not incentivise unsafe work practices, on-demand workers try to maximise their low earnings or feel rushed to meet unrealistic performance expectations set by the platform apps.
4.67
Job insecurity and low earnings also mean that gig workers are more likely to turn up to work while sick, work long hours leaving them fatigued, and sometimes take shortcuts such as not following traffic signals or work protocols—all factors which put themselves and others at risk and result in higher rates of injury. Professor Riley Munton elaborated:
… particularly in areas like transport work, there is a connection between wages and conditions and safety, because, if you're not going to earn very much for the time that you're working and you're not going to be paid any waiting time, then you'll be in a much greater hurry and will have anxiety to get the job finished so that you can then clock on for the next one. That can contribute to poor safety.
4.68
Health and safety failings also impact consumers and wider society, for example when rideshare drivers and delivery workers accidents. The impact of unsafe work environments and practices has been made particularly evident during COVID-19 and the infections and deaths in sectors characterised by on‑demand work such as food delivery and aged–care.
4.69
Gig workers are also less likely to report safety issues (including injuries and near misses) and abuse for fear of losing hours or access to work altogether.
In some cases it is not possible for workers to identify who is responsible for their safety, for example in the case of sexual harassment or where they work across multiple apps. When insecure workers do report safety concerns they are less likely to be treated seriously.
Committee view
4.70
The committee considers that a safe work environment is a fundamental right for all workers, including for gig workers. The current arrangements for gig workers clearly do not offer the health and safety protections that Australian society expects—as seen in other employment arrangements—nor requirements and ongoing supports that are necessary to keep gig workers as safe as possible at work and to look after them and their families if they are injured or killed.
4.71
Unrealistic time and performance pressures, combined with high-risk work environments, and lack of training and appropriate protective equipment for gig workers place them at higher risk of injury at work. When these factors are combined with other elements of gig work—inadequate job security, earnings and conditions—it is clear that gig workers are vulnerable and have little capacity to make safety improvements to their work environment, to the detriment of them and their families.
4.72
Options for reform are included in Chapter 6.
Lower job security
4.73
Gig work is, by its nature, insecure. There are usually no ongoing commitments for either platforms or workers, work can very quickly commence and be terminated by either party, earnings are often low, there are often no minimum or set work hours, workers may be underemployed, in some instances the work is low–skilled, and offers opportunities to people who might otherwise have difficulty entering the job market.
4.74
Lack of security in the gig economy has increased since the start of the COVID‑19 pandemic. Some opportunities decreased (e.g. rideshare), people lost other jobs or lost hours, and the competition for gig work increased.
The effects of the pandemic are continuing to be felt by on-demand workers.
The inherent risk for these [gig] workers is the downward pressure on payrates and job security by an 'employer' who exerts control but doesn't take any responsibilities and risks of an employer … Such downward pressure is of great concern in an industry that already fails to match the social value of the work with proportionate remuneration.
4.75
However, the committee also heard evidence from a small number of platform providers who are successfully using or trialling other employment models. Mr Jordan O'Reilly, Chief Executive Officer and co–founder of Hireup told the committee that it employs its workers directly and provides all the entitlements, rights and conditions that apply in an employee–employer relationship, while using platform technology to engage with its clients:
… we can absolutely use good technology that puts choice and control in people's hands, along with employing a workforce with all of the entitlements, rights and conditions that come along with that. I disagree with people that say that it can't be done. Hireup is proof that we can do that.
You will hear today from organisations and people who say that, to access the benefits of technology and the flexibility that comes with platforms, we have to treat the workforce as independent contractors. I believe that's rubbish. I people will say that it is too hard to create a platform that engages workers as employees. I would say that we need to try harder.
Decreased power and workplace rights
4.76
A significant characteristic of on-demand platform work is the power imbalance between employing entities and individual workers, in favour of the platforms. A number of submissions highlighted the reduced power of individuals working in insecure jobs, with platform and labour hire companies setting terms ranging from payment, conditions and protections, to working specific jobs, hours and locations, and the ability to work multiple jobs or platforms.
4.77
The insecure nature of this work means that workers are less able to advocate for their rights or better terms, refuse additional hours or jobs, or report sexual harassment, bullying, discrimination, safety issues, or fraud, for fear of losing work or being suspended or banned from platforms.
4.78
Ms Emma Dawson, Executive Director, Per Capita, described the power imbalance this way:
What we have actually seen play out is that the flexibility, particularly in gig economy work but across all forms of insecure work, is very much one way, that there is very limited flexibility in being a rideshare driver or a food delivery driver because of the way the algorithms work—which is that, if you do consistently turn down shifts or make yourself unavailable, then you simply don't get any additional work from the platform. Again, it comes back to that practical application and that power imbalance.
4.79
Dr Goods, Dr Barratt, Dr Smith, Mr Sullivan and Dr Veen have been researching the impact of platform work with an emphasis on worker experiences since 2017, and supported the idea of a power imbalance between platform providers and workers:
… the insecurity faced by app–based delivery workers as workers bear the economic risks and are reliant on the platforms to generate an income, creating, and then reinforcing a power imbalance between workers that leaves them with limited opportunity to overcome this income insecurity.
4.80
The study into Digital Platform Work in Australia commissioned by the Victorian Department of Premier and Cabinet identified three levels of control unique to platform work. Firstly, the value of the gig is often determined by an algorithm which is opaque to the worker; secondly, reputational rating systems operate as powerful forms of indirect digital control and place structural power with clients rather than workers; and thirdly the extent of monitoring and control of workers is unprecedented, including through productivity metrics and gamification of apps.
4.81
Action can be taken by platform providers against workers immediately without notice and with limited or no effective appeal or redress mechanism. Results from a TWU survey found that 58 per cent of rideshare drivers had been treated unfairly by their company without being able to defend themselves, and 29 per cent had been suspended or deactivated as a result of a false allegation. One respondent noted that:
Drunk passengers falsely claimed sexual inappropriate behaviour by the driver. I was deactivated and they got a free trip and a great laugh.
4.82
The levels of control over platform workers is considerable both through algorithmic allocation of work, and by performance through the gathering of ratings, reducing the overall flexibility of the arrangement for workers:
… it has been instrumental in enabling platform firms to create novel forms of work organisation. Partly with the support of consumers, platforms collect a range of data on worker performance, but only share limited information with workers as to how this is used to allocate work or prevent workers from being “locked out” of apps – a serious issue in terms of work security. This means that workers are indeed controlled by a combination of market necessity and the need to meet the concealed but significant demands of the algorithmic manager. Thus, flexibility appears overstated.
4.83
A judgement in the Fair Work Commission (FWC) involving Deliveroo and one of its drivers, Mr Diego Franco, found that Mr Franco was an employee of Deliveroo and that he had been unfairly dismissed for not meeting delivery times. As part of its deliberations over Mr Franco's employment status the FWC considered Deliveroo's level of control and the capacity to exercise control over Mr Franco.
4.84
The FWC found that Mr Franco was deemed an employee, because Deliveroo used performance data and algorithms to terminate Mr Franco's account.
This case has highlighted the significant control held by platform providers over how work is done, when it is done and who receives the work.
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These aspects of control and power are significant and in a state of flux, with courts finding in favour of both platform providers and workers at different times.
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The Centre for Future Work called for this power imbalance to be addressed and adjusted in favour of gig workers to address inequalities, a view supported by the ACTU:
Our laws and institutions should be designed to protect everyone, especially those most vulnerable to exploitation. The basic premise of labour law is that a power imbalance exists between the individual worker and the employer. That imbalance is particularly pronounced for the vast majority of insecure, nonstandard workers. Our labour laws, and labour market institutions, should be reformed to assist this vast majority of insecure workers who face a very dramatic power deficit in their employment relationship.
4.87
The committee heard that collective representation in the Australian labour market has declined over the last decade, and it is clear that on-demand workers are even less able to bargain either individually or collectively for better rates of pay, conditions or work health and safety.
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This is partly due to the precarious nature of gig work and fear of losing work or platform access; however it also arises from the structure of gig work. Workers are often paid by job, they have no shared physical workspace, they have limited ways of engaging with each other, and workers turn over quickly. These factors make it difficult for workers to bargain individually or organise and take action collectively.
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The Centre for Future Work deemed that the ability for on-demand workers to take collective action is essential to ensuring they have more stable jobs, better rates of pay, safety and improved conditions:
We believe that workers must be able to collectively bargain for improved workplace standards with the controlling economic entities across industries and along supply chains ... Industry bargaining is a necessity for resolving worker bargaining imbalances created … insecure working conditions, decentralised working and attacks on unions that create barriers for union power in the workplace … reliable workers should have jobs they and their families can rely on with fair and predictable pay and hours of work, access to important conditions like annual leave, paid sick leave, overtime, penalty rates and long service leave, protection from unfair dismissal, and quality skills and training and career opportunities.
Industry or sector–specific impacts
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Individual industries or sectors experience specific impacts due to the nature of the work and the nature of the engagements commonly used.
Transactional versus relationship–based services
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The evidence to this committee shows that the impacts of gig work are different depending on whether transactional or more personal services are being delivered. The former is less complicated and less nuanced—consumers engage workers for a single service and once it has been delivered the relationship with the consumer generally ends. This type of work includes rideshare, parcel and food delivery, and some professional and technical services such as graphic design or writing. The latter is much more complex and generally involves the development of trust and a relationship between the worker and the client—such as that seen in aged-care, disability care and cleaning services.
Rideshare and delivery services
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Engagement of on-demand workers in the rideshare and delivery sector is commonly through platforms and apps including Uber and Deliveroo. Workers are generally engaged as independent contractors and have not usually been recognised as employees.
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People work in this sector because of the low entry barrier—they may have limited English, limited skills or experience, or visa restrictions—they often work across multiple apps and there is significant turnover, with workers moving in and out of this work as their circumstances change.
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Consumers may be less impacted by worker turnover in this sector because there is little or no expectation of an ongoing relationship—they expect to deal with a different worker each time they use the service.
Personal care and community services
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The personal care and community services sector operates differently. Engagement of workers in this sector is largely through labour hire companies, and increasingly through platform providers such as Hireup, Mable, and Find a Carer. Under the former arrangement, workers are engaged by a labour hire company or operate as independent contractors and work is directed through the labour hire company.
4.96
As outlined in Chapter 3, Mable is an online marketplace that connects consumers with independent service providers. By contrast Hireup directly employ their workers and pay superannuation, tax, insurance and other entitlements. Both providers offer their services via an online platform.
4.97
Work within the sector is variable, with some unskilled work such as personal shopping, transport and cleaning, and progressively more skilled and professional work, ranging from personal care, to medication management and bowel care, to nursing services. Some people work in this sector because of the low entry barrier, while others work in the sector because they are qualified or experienced in the field, or they are passionate about caring work.
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The Australian Nursing and Midwifery Federation stated that 90 per cent of workers in the nursing sector are women, with even higher figures in
aged–care. The sector also has a higher proportion of migrants, with 50 per cent of aged–care attendants being born overseas, predominantly women.
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The committee was unable to definitively determine why, in this sector in particular, platform providers and labour hire companies do not engage more workers as employees on a permanent part time basis, given the allegedly lower costs of this engagement model and that consumer demand for care requirements are largely known. From evidence provided to the committee it is clear that client care needs mean that care hours are being utilised but that some workers are engaged on low or no contract hour arrangements and routinely work well above those hours, often at multiple sites:
If it [the single–site policy] worked during COVID, why can't we now have an industry that says, 'We're not going to have people working across three, four or five sites as casuals. We'll give them permanent part-time work'?
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Witnesses to the inquiry suggested a number of reasons for this engagement model including that it enables platform providers and labour hire companies to retain maximum flexibility and power by engaging workers less securely. This arrangement means they can respond to changing requirements for numbers of workers or the qualifications and skills of workers. Other witnesses noted that the power imbalance motivates workers to work harder and reduce sick leave for fear of losing work, it means penalty rates do not need to be paid, and that some workers prefer to work casually and to work across facilities.
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Several witnesses spoke about the impacts of insecure employment, and in particular gig work, on the reduced ability of the sector to attract and retain staff in the short to long term, a significant issue for the growing aged and disability care sectors:
We are going to need an employment system that seeks to recruit and retain employees. For that to happen, we need a sound structure and secure work for them to work in. It's very difficult work. It's been explained how difficult it is to retain people. … So this model of employment is not the way to go in retaining and recruiting an aged-care workforce into the future.
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Hireup advocated for improvements in earnings, entitlements and protections for care workers across the disability care sector in order to attract workers to the sector.
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Personal care and community serviceswork is characterised by the development of relationships and trust between workers and their clients. Workers typically enter the homes or residences of their clients and may provide very personal services such as bathing or administering medications. Mable described:
… the unique needs of aged care at home and disability support where people are looking for solutions that are person centred and respond to their individual needs, preferences, abilities and interests where choice and flexibility are critically important, where relationships really underpin people's ability to live independently and to overcome sort of loneliness and disconnection.
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Numerous workers spoke of the importance of the client–worker relationship, and of the direct links between the quality of the relationship, continuity and the quality of services received by clients. In particular, workers spoke of the relationships they developed with their clients and the levels of trust required to deliver services appropriately:
… the profile of people in residential aged care, this is an extremely fragile, frail population. For them, the best quality care is relationship based, not transaction based. The more that they get to know people and the more continuity they get from day to day, the safer those residents feel and, in fact, the safer they are.
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Hireup highlighted the importance of investment in the workers as an investment in the sector and, in turn, the resulting benefits, including improved quality of services to clients and improved retention of workers.
4.106
There was widespread agreement with the findings of the Royal Commission into Aged Care Quality and Safety that the current funding model and levels of funding are insecure and insufficient to meet people's care needs and do not recompense workers adequately.
4.107
The committee has heard that consumers are benefiting from alternative ways of obtaining care services through various online platforms, with individuals having greater choice and able to exercise greater agency in their own care arrangements. However the committee also heard that there are risks for consumers, with reduced regulation, breakdown of holistic care into itemised tasks, and longer term implications for the caring workforce and professions.
Impacts on individuals, families and communities
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The Australian Institute of Employment Rights contended that:
Insecure and precarious work can also be thought of as substandard work that falls short of the International Labour Organization's (ILO) notion of 'decent work' … "Decent work sums up the aspirations of people in their working lives—their aspirations for opportunity and income; rights, voice and recognition; family stability and personal development; and fairness and gender equality".
4.109
The committee received evidence from a wide range of witnesses about the impacts of gig work on workers and their families, in addition to those impacts already considered.
Job satisfaction
4.110
The committee heard varying evidence as to how satisfied on-demand workers were with their work. For people gig work provides autonomy and a sense of entrepreneurship which can be very satisfying. A Deliveroo survey found that 84 per cent of riders were satisfied with their work and that thousands of new applications to ride are received per week, showing that it is an attractive form of work, and that workers value the flexibility.
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The committee heard contrasting evidence from other submitters, including that insecure work is a barrier to job satisfaction. A report prepared by the Faculty of Law at the University of Technology Sydney for the Transport Education Audit Compliance Health Organisation (TEACHO) noted that:
Job security enables workers to refuse unsafe working conditions without the threat of job loss. Income security (notwithstanding absences from work due to illness or injury) supports an adequate level of overall remuneration, sufficient to allow for annual recreation breaks and to prepare for retirement. Implicit in these four interests are also the need for appropriate mechanisms for setting rates of pay; for consulting on the terms and conditions of work; and for resolving disputes and adequate enforcement.
Negative health impacts
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Insecure workers, particularly those who are underemployed, are more likely to suffer ill health, including physical ill health and in particular mental health related issues such as depression, anxiety and suicide.
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As was seen during COVID-19 lockdowns, in particular, gig workers are more likely to go to work when they are sick because of the insecure nature of their work and low income. This, in turn, created unsafe work environments for workers, clients and for the families of workers:
… there is opportunity in this policy space to deliver better outcomes for workers, increase their job security and provide them with the kind of security that means that they don't have to turn up to work sick or that they know that they can take some time off on school holidays because they've got to take care of their kids. We need to think about work as being more than just a financial transaction between an employer and employee and about supporting and sustaining the lives of all workers beyond work as well.
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As discussed earlier in the chapter, safety is an issue for gig workers, with real impacts for individuals and families when injuries or illness stop them working, or if they are killed while working. Mr Michael Kaine, National Secretary of the TWU told the committee about the impacts for five gig workers and their families when the workers were killed in 2020:
Ik Wong, Dede Fredy, Xiaojun Chen, Chow Khai Shien and Bijoy Paul … lost their lives last year in a space of 11 weeks. Their families have been left destitute. They had to work. Some of them were here trying to put themselves through university. Some of them were looking after their families. None of them got the workers compensation payment that other Australians get, and their families are destitute. That's the gig economy.
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Because these workers often have fewer resources at their disposal, these effects are disproportionate on individuals and their families and contribute to overall negative impacts on family life.
Financial instability and inability to plan ahead
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The lower incomes and job insecurity typical of gig work create financial instability for workers, giving them less financial and career security and making it harder for some them to meet the costs of everyday life or to plan ahead. It is more difficult for on-demand workers to plan ahead financially, in relation to study or career progression, relocation, planning for holidays, planning if or when to start a family or have more children, planning childcare, and planning for retirement.
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Work and income instability means that on-demand workers are less likely to have savings and be able to afford holidays, a car
and—significantly—housing.
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Lack of a regular, predictable income means that gig workers may not be able to pay rent and are less likely to receive approval for a loan or mortgage. The Springvale Monash Legal Service said that:
Insecure work creates housing inequality for workers. The sudden loss of income for vulnerable or disadvantaged workers may lead to a real risk of homelessness, spiralling debts and may impact significantly on mental health. This may have particularly serious implications for clients with dependent children or other dependents. For workers experiencing disadvantage, it may well take a prolonged period of time to recover from the financial crisis of job loss if finding comparable alternative work is limited.
4.119
Insecure work, underemployment and lower incomes affect not only immediate earnings but also lifetime earnings, with the associated loss of superannuation and wages growth due to limited experience and qualifications and lack of career pathway.
4.120
These factors combine to make it very difficult for people and families to set and achieve personal goals, and to meet common societal expectations such as moving out of home, buying a house or 'settling down'. For gig workers it is more difficult to build a sense of achievement or satisfaction with their lives, and contribute to wider society.
Less time with family and friends
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Gig workers report job insecurity, being lowly paid, working long hours, working hours that take them away from their families, and working multiple jobs. These prevent gig workers from spending time with their families and friends, isolates workers from their families and other support networks, and creates practical problems and stresses for families when alternative arrangements for care need to be made for children or other family members. All of these experiences create considerable uncertainty for gig workers. Ms Dawson from Per Capita observed that:
… what we are hearing from so many people now, particularly since the return to work after the recession, is that gig economy work is a necessary second job that really eats into their family time and their leisure time.
4.122
Some gig workers also spend considerable time trying to source work or waiting for work, meaning that they are effectively 'on call'. This can mean that they have little opportunity to separate leisure and family time and work time.
4.123
These factors have been shown to create long–term impacts for individuals and families, creating tensions in close relationships and contributing to conflict and relationship breakdown.
Vulnerable groups
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The committee heard evidence that on demand work is more likely to attract workers from vulnerable groups in society including women, young people, older workers, Aboriginal and Torres Strait Islanders, people living with a disability, migrants, students, low income earners, and the formerly unemployed.
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The report into Digital Platform Work in Australia supported this evidence, finding that higher proportions of young people, Aboriginal and Torres Strait Islanders, people living with a disability, temporary and permanent residents, and unemployed people working as platform workers.
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For vulnerable people with limited employment options on-demand work offers an employment opportunity, with a survey of Uber Eats drivers finding that three in five find it challenging to access traditional work as a casual or permanent employee.
4.127
For these people gig work offers them an employment option because it has:
a low barrier for entry–this makes it easier for people to access work with low educational attainment, few or no qualifications, or where their qualifications are not recognised in Australia, and while they are mastering English as a second language; and
flexibility—enabling workers to balance work with caring responsibilities, study and other commitments, to manage when and where they work, health requirements, and the ability to manage their work to meet visa restrictions.
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Researchers for the Digital Platform Work in Australia report had a different perspective:
… another interpretation is that platform work – or at least that which is low paid and insecure—does little to redress existing structural inequalities in the labour market. This perspective decries the promotion of such work as 'an opportunity' or as a flexible and accessible solution to the challenges faced by vulnerable groups in accessing decent and secure work.
4.129
For vulnerable workers gig work can also have negative impacts. They may find it harder to access secure work, meaning that they are more likely to accept lower pay and conditions. Women completing gig work are more likely to be paid less than male gig workers, and migrants and temporary residents who may also compare their earnings and conditions with pay and conditions in their country of birth, rather than looking to Australian labour market expectations.
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Mr Farouque put it this way:
Many of those workers are from what could be described as vulnerable cohorts of workers—migrant workers and younger workers. It's apparent to us that the existing regime of regulation or laws relating to those workers is insufficient to protect them and afford them basic rights. The existing laws don't provide for the types of basic frameworks that many of us come to assume are essential to ordinary working life. …
They are not complex matters. We're actually talking about those basic entitlements. They're very simple matters. No doubt, during the course of your employment, you have been able to in a prior life being able to access those types of benefits, as many other workers are denied today. They are simple benefits. Complexity is not a problem in terms of conferring rights upon cohorts of insecure workers those basic rights. They're not that hard.
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Vulnerable workers are less likely to know what their labour rights and entitlements are and they are less likely to make complaints for fear of losing work or being banned from platforms permanently. For migrant workers the issues can be compounded because of language barriers and different cultural understandings, or because they fear deportation, or other legal immigration issues.
4.132
Gig workers are also subject to racial and gender discrimination through their work and report higher frequencies of discrimination and harassment. For the reasons outlined above, they are less likely to take action for inappropriate behaviour.
4.133
Critically for young people, platform providers and labour hire companies often provide little training, skills development or education. So while these jobs provide an income, they do not generally improve capability or provide a career path for these workers, with long–term consequences. The National Youth Commission Australia wrote that:
The insecurity associated with casual and gig work has long-term consequences, leaving young people vulnerable to insecure housing or compromised health outcomes, including mental illness.
4.134
Young people have been disproportionately affected by supressed wages growth. This has a significant impact on their ability to engage in secure work and full economic participation over time with longer term impacts for economic confidence and growth, as explained by the Young Workers Centre:
There are significant divisions across age groups, with increased precarity a reality for younger workers. While younger workers are experiencing the greatest degree of precarity, it is unclear whether these workers will 'graduate' to more secure work as they gain experience in the workforce. We do not have adequate information about whether this group of workers will remain entrenched in less secure employment throughout their careers. Even if it is a 'rite of passage' for younger workers, this does not justify the increase in precarious employment that these younger workers face. It appears the "… uncertainty of the education to-work nexus and precarious work in general is having a significant impact upon how young people construct their identity and imagine their futures, which is heavily classed and gendered" (Churchill, Rayn and Craig 2019).
4.135
The pressures felt by migrants and temporary residents (including international students) became particularly apparent during COVID-19 as they were not generally eligible for government assistance. Uber Eats found that 77 per cent of its drivers were not eligible for government support during COVID-19 and that 65 per cent of these workers reported visa status as their main barrier. Additionally, the TWU found that 76 per cent of rideshare drivers were not provided with any sick leave or compensation if they had to self–isolate, compounding the financial stresses for workers without government assistance.
Broader Economic Impacts
Underemployment
4.136
The committee heard evidence from a range of witnesses and submitters that around 10 per cent of workers—including on-demand workers—are underemployed and would like to be working additional hours.
4.137
In February 2021 the broad underemployment rate rose by 0.4 points to 8.5 per cent, despite a drop in unemployment to 5.8 per cent. Underemployment amongst part–time workers is between 26 and 27 per cent, with underemployment likely to be higher amongst young people and migrant workers. There are a number of explanations for the underemployment rate: low rates of pay for on-demand work, low employed hours and job insecurity.
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Per Capita noted the multiplier effects of underemployment, estimating losses to the Australian economy of more than $30 billion per year. It observed that the cost of job insecurity is significant—through lost wages, lower household income and consumption, lost superannuation savings and lost tax revenue.
4.139
Per Capita identified the loss of tax revenue as one of the macroeconomic costs of gig work. It estimated that income tax on wages lost to underemployment would have generated at least $4.35 billion per year. It also found that, prior to COVID-19, total wages lost to underemployment across the Australian economy was $24 billion per year.
Economic confidence and growth
4.140
In contrast, the committee received evidence of the compelling link between strengthened workers' rights and economic growth. A number of submissions also linked improvements in job security, including for
on-demand workers, with increases in economic security. The committee heard that, improvements in job security would lead to greater household confidence, wages growth and increased spending, and positive impacts for wider economy. Per Capita advised that:
If we are to restore the promise of the good life that Australia has always offered to working people, then the fallacy that workplace flexibility benefits workers has to be overturned for job security and full employment, and, by that, we mean genuine full employment—we believe the rate has probably got a two in front of it. It must be at the centre of the government's approach to our economic reconstruction.
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Mr Dan Nahum, Economist at the Centre for Future Work also supported this view:
Improving the security of the labour market for workers and their families should be a key component of a long-term strategy for inclusive macroeconomic recovery, including expanded public investment, increased spending power for workers to lift aggregate demand and improved job stability and equity.
4.142
Liberty Victoria and the Centre for Future Work also submitted that improving earnings for on demand workers would result in higher spending, with earnings going directly into communities and businesses. Dr Garland agreed:
When people in local communities have good, secure jobs, where they know how many hours they're going to have a week and how much they're going to earn, then their confidence in spending increases. We've seen that. To use the example of businesses doing well, that often doesn't translate into their passing that money to the rest of the community, because people tend to save a lot when they're earning a lot or they hold onto that money as profits. Whereas if you're paying that money to workers then they're more likely to be spending in the community, stimulating the economy and therefore creating more jobs.
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Per Capita reflected that the costs not only impact individuals, but society more widely. Mr Nahum shared the same sentiment and outlined the impacts for social cohesion in more detail:
… [insecure work is] obviously going to be socially deleterious, of course, because people are going to find it very hard to establish stable lives and establish families, and housing tenure—regardless of whether it's purchasing or renting—is going to be more difficult if your income is insecure. Those are some of the factors that come to mind. It strikes me that this is a trend that, for the sake of our social cohesion as well as our economic resilience, needs to be reversed.
4.144
Mr Bernie Smith, from the Shop, Distributive and Allied Employees Association, cautioned that 'breaking' the relationship between workers and those who provide work, 'perpetuates insecurity'. This is inherent in both 'labour hire forms of work [and] gig economy forms of work', and is compounded by the lack of union representation for these workers. Mr Smith added that 'casual conversion rights … do not apply to labour hire or gig workers with their host employer; they do not have that security'.
4.145
In relation to the arguments of platform companies that their business models provide economic growth and benefits, Mr Smith said:
Automation and its productivity benefits are beneficial only if the benefits are fairly shared and the work is sustainable. If work is not sustainable due to automation or surveillance at work, and workers become disposable, then work cannot be secure.
Loss of tax revenue
4.146
Loss of tax revenue due to platform work was raised in the context of payroll and similar taxes. Maurice Blackburn Lawyers suggested that governments may be losing tax revenue as a direct result of misclassification of workers as independent contractors.
4.147
The Centre for International Corporate Tax Accountability and Research (CICTAR) and Unions NSW both identified profit–shifting by global companies as an issue, alleging that platform providers are seeking to avoid corporate tax obligations:
Unions NSW understands the Federal Treasury has sought to engage with industry about how to consistently tax participants of the Gig Economy. While this is indeed important to ensure tax compliance is easier for individuals working in the gig economy and provide greater transparency, the real issue is taxation compliance from the platforms themselves. In 2018 Uber Australia made a gross profit of $785 million, yet paid a mere $8.5 million in tax. Most of Uber's profit was transferred offshore, facilitated by corporate tax loopholes that Treasury is content to keep open …
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CICTAR cited evidence that:
Uber's operations in Australia may provide insights into Uber's operations in other countries. On reported revenue in 2019 of AUD$1,161.6 million (Australian dollars), Uber paid AUD$11.1 million in income tax, less than 1% in contrast to the corporate income tax rate of 30%.
4.149
Gig workers themselves are also liable for tax obligations including income, and some gig workers (for example, rideshare drivers, workers providing services with a GST turnover of $75 000 or more) must also pay GST.
4.150
The committee heard that, while platforms encourage workers to meet their taxation obligations, the report into Digital Platform Work in Australia found that around half of digital platform workers do not pay tax on their income, although it noted that this may be so because of intermittent, infrequent participation and/or few hours being spent working through platforms. In these instances the income for some workers may not meet minimum tax thresholds.
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The TWU expressed its concern at the collapse of the employment relationship, with much wider implications:
Unless we get this right, what we will see is the collapse of the employment relationship, the collapse of good employers and the collapse of state revenues as they move away from payroll tax, workers compensation systems and the like.
Superannuation and government support
4.152
Gig workers deemed as independent contractors are not paid for superannuation and are generally excluded from the Superannuation Guarantee. Platform providers recommend that workers take this into account when setting their rates, or anticipate that workers will put money away for superannuation.
4.153
The committee notes that some platform workers may in fact be eligible for the Superannuation Guarantee under existing definitions within the Superannuation Guarantee Administration Act 1992. Section 12(3) expands the meaning of employee by specifying that: 'If a person works under a contract that is wholly or principally for the labour of the person, the person is an employee of the other party to the contract'. This could cover gig workers even if as a matter of practice the platforms don't pay superannuation for their contractors.
4.154
While Ms Sharp, Assistant Federal Secretary, Australian Nursing and Midwifery Federation told the committee that it was unrealistic to expect gig workers to put money aside for superannuation:
If you're on a minimum wage and you're living week to week to look after your family and pay rent, who is going to be able to afford to put that little bit of extra away for personal leave, for sick leave and for carers leave million, let alone a super guarantee? Who's going to be able to put into their retirement fund at [9.5] per cent when they're getting $25 hour on a Saturday night? It is just not going to happen, and we're going to see more people retire into poverty.
4.155
Liberty Victoria submitted that gig workers receiving lower pay make far lower superannuation contributions. The 2020 Ride Share Network and TWU survey found that over 60 per cent of drivers could not save enough to pay themselves superannuation and annual leave. One rideshare driver said that 'Money is so poor that it cannot cover for superannuation and sick leave'.
4.156
The committee received evidence that when gig workers rely on this form of engagement in the longer term there are significant impacts on their ability to retire with dignity and financial security, particularly for women.
The Actuaries Institute calculated that 'workers who spent five to 10 years … participating in the gig economy may be between $48,000 or $92,000 worse–off in superannuation savings at retirement'.
4.157
For workers who rely on gig work in the medium to long term, lower incomes, fewer assets and minimal or no superannuation—will potentially increase public spending on government support and demands for other services, such as housing.
4.158
Professor Riley Munton supported this:
If you still recognise that there are some fundamental needs that all people who work in our economy have—and it is in our interests that they have, because if they don't get it from their work then they have to get it from the social security system. Somebody is going to have to pay for the maintenance of their citizens. It's proper that a proper rate comes through their work.
Wider impacts
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Dr Sandra Peter, Director, Sydney Business Insights, University of Sydney Business School spoke with the committee about the impacts that platforms have on the wider environment in which they operate, with particular reference to transport and the impact on our cities. In particular she referenced the numbers of cars on the road and the demographics of populations served by platforms.
4.160
In Australia, Uber has already impacted on public transport, providing options for consumers at times when public transport may be infrequent or not available, and increasing overall urban mobility. Uber now has integrated public transport journey planning in Sydney, Melbourne and Brisbane. It provided this evidence in relation to urban mobility:
Uber is working to extend the reach of public transport, helping unlock economic opportunity for more Australians. This phenomenon was reflected in a New South Wales Independent Pricing and Regulatory Tribunal (IPART) survey of point to point transport which found that in 2018, "the use of ridesharing in urban areas outside Sydney (Newcastle, Wollongong, Gosford and Wyong) more than doubled from 10 to 28 per cent", a vast improvement in urban mobility for traditionally underserved areas … By empowering consumers with more choice, we are helping to encourage the most efficient use of our urban transport networks.
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Uber also wrote about its potential to impact our cities in other ways, noting that the rise of bicycle food delivery had highlighted deficiencies with current cycling infrastructure:
Cycling's growing role in our urban freight task needs to be supported with the right infrastructure, particularly separated infrastructure on busy arterial roads. Uber wants to work with governments to identify where there are current gaps in cycling networks and we can use our data to support business cases for existing and planned bike paths.
4.162
This view was shared by Dr Goods, Dr Barratt, Dr Smith, Mr Sullivan and Dr Veen, who noted that the built environment contributes to issues around work security, with road conditions in Australian cities making rideshare and delivery platform jobs risker than other work:
Developed for motor vehicles rather than bicycles, urban infrastructure adds another layer of risk. Workers are often in dangerous situations such as riding in tunnels or sharing lanes with [buses].
Committee view
4.163
The committee recognises that gig services have provided unprecedented opportunities for consumers to travel, eat, order online, be cared for, and receive other services more flexibility and cheaply.
4.164
It also acknowledges that the flexibility of gig work has provided undeniable benefits to businesses, enabling the number and skill mix of workers to be flexed up and down to meet demands for services, and to engage workers cheaply with few overheads and ongoing obligations.
4.165
Evidence from witnesses has also shown that many workers value this flexibility as it suits their personal circumstances and enable them to balance different commitments, to supplement their stable income stream, and to fill short-term shortfalls in work.
4.166
However, the committee has also heard that a significant proportion of on-demand workers rely on insecure platform work that is poorly paid and offers few conditions and protections. Gig workers who rely on this income are working long hours, often doing unsafe work in unsafe conditions, placing themselves and their families at risk of illness or financial stress as a result.
4.167
The committee is concerned that on-demand platform work is disproportionately and negatively affecting vulnerable groups, including women, young people, older workers, Aboriginal and Torres Strait Islanders, people living with a disability, migrants, students, low income earners, and the formerly unemployed.
4.168
The short and longer term effects of gig work on individuals and their families are considerable. The committee has heard that some on-demand platform workers are unable to buy food or pay for housing and that their families are unable to spend time together. It is devastating for people to be unable to plan ahead for their lives and to feel like they cannot set goals for the future and achieve them.
4.169
The committee considers that fundamental changes to the structure of on-demand platform work are required to ensure that people are given some certainty in their work, that they are paid fairly, are able to work as safely as possible, and that they have protections for themselves and their families when they are ill, injured or if they are killed at work.
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Furthermore, it is essential that platform workers are provided with future career opportunities and the opportunity to achieve financial security, including for retirement, to enable them to participate fully in society. The committee is firmly of the opinion that improved job and financial security for gig workers will improve household confidence, and see greater economic growth across the Australian economy, with wider economic benefits and better social outcomes.