Moderator – I feel the world is a much better place because Uber exists. Personally, my life is better because Uber exists and a lot of people will feel the same way. They are innovative. But if they had to employ everybody full-time, they will be out of business. As they can’t afford that. Is it financially viable for gig economy companies?
Niklas Östberg – I would disagree with that. The challenge is most of them might not want it and it might be hard to find riders, maybe the service would lack, but it’s not that it’s cheaper for us to have the gig. We have to pay more.
Moderator – Can you explain that a little bit more? What is the cost of employing someone on a freelance basis than full-time? Why would that be more expensive?
Niklas Östberg – Generally how it works is that when a rider is a freelance, they are very good entrepreneurs. They make sure they can maximize what they can make and therefore generally they make more money. And some of that money goes to pay social security, tax, and other benefits that they would have as an employee. Because of their innovative spirit, they are generally better at optimizing when to be out, and how to make as much money as possible. We are not good at telling them when to go out, and the street they have to stand in. No data is as good as theirs to know exactly where to be when to be, and how to be and that’s why it’s favorable for Uber and others to give that responsibility to the riders. And therefore, you have a good service because they know where to be at the right time.
Sharan Burrow – They share intelligence, so they know the peak hours. During peak hours they are going to earn more. Uber for you is just an app. You pay in the middle of the day when there’s no business, maybe half the price you pay at peak hours. But you still pay. So, for you, it’s an app. Why would it matter that the worker wasn’t being exploited? Would you feel better if they had pensions and social security? They’re offering a service to you. I’m not just worried about the transport people. I think that will be resolved by courts and by legislation because employment relationship is a live issue. What I’m concerned about is we’ve got young professionals who have gone to university for four years and come out with professional careers in legal services, medical services, journalism, and content information, it’s now being undermined by internet-mediated platforms. There’s nothing wrong with technology.
It’s really about how you ensure those people like we have done for generations get a fair contract process. So, if they only want to take one job or two jobs a day or week, or month, then at least you know they’re getting a fair contract for their work and people are not being exploited by undercutting each other at the base. They can bargain above that. But they can also join a union. You know between a government and employer’s responsibility they can earn a pension; they can get access to health and indeed if they are injured or sick payments for the normal things you get with a work guarantee. So, that’s what we have to figure out. And it’s not impossible.
Many countries are starting and some of them have done it but it’s going to have to take employers to put those principles together in good faith. But they will have to accept that they can’t simply allow the model of the work to benefit them at the exploitation of the employee and it’s got nothing to do with the choice of hours.
Moderator – We’ve got a question from the audience.
Niklas Östberg – Can I respond to that? I can answer only for delivery. If the food delivery people are exploited, we would not have any workers because they would not do it. The more we have to hire the more we have to pay. The thing is we can’t compare that person is willing to work for five euros and the other person is willing to work for seven euros. If we need those jobs both will get seven euros and if you have thousand people in an area you have to pay the minimum that the thousandth person wants for everyone. So, even if someone has worked for less it doesn’t work in the delivery business.
Sharan Burrow – It’s not just about wages. What happens when one of your drivers falls off his bike and gets injured?
Niklas Östberg – They are secured.
Sharan Burrow – By whom?
Niklas Östberg – We make sure they are safe and secure.
Sharan Burrow – So you are a decent employer by choice. But that’s not the case in many countries. So, then they can’t earn any money at all and that’s exploitation. They get sick in some other way; everybody else can go to the hospital but they can’t.
Eynat Guez – But if the government is allowing someone to be a freelancer, they can eventually set the rules. To be a freelancer, they need personal medical insurance. This is an easy request you can impose on the gig worker.
In reality, I think that governments are not setting clear rules for gig workers. They are saying you are the employer; you know that this guy is young and irresponsible. But it’s a very easy structure. They are paying taxes. They have a relationship with the government. This environment needs to be created and I think it has not been created properly.
Question from the audience – Just an observation. We are talking about worker exploitation. We’re also talking about digital technologies facilitating a marketplace where exploitation is happening. Forget the pre-internet, and if we go back exploitation has been happening for decades and centuries. Wouldn’t we just go to the source of demand for that exploitation and begin there. In other words, if we break the marketplace to say that the employers of these workers, not the platforms, whether it’s the consumer’s side. To the point on convenience, in the mid-90s when you were buying clothes and you figured out that those clothes were being manufactured by child labor somewhere in the world you made a conscious decision as a consumer, that I’m not up for that. It’s the same issue based on what I’m hearing. But do you mind responding?
Karien van Gennip – I think there is a role for governments to legislate more of them, make flex less flex, and make fixed less fixed. I think there is a role for governments in the gig economy that starts to exist next to the hardcore economy.
The second one is if you want this to work then indeed the consumer has to play a role as well and some consumers do. But there is a problem because the concerned citizen that you are now might be someone else in the calculating consumer. If you want to buy a t-shirt and think it’s too cheap as a concerned citizen you might not buy it but if you can’t make ends meet at the end of the month, you will still buy the cheap t-shirt. Yes, you’re right there is a role for the consumer but it only goes that far. So, we have to do both. You have to be a responsible consumer; the government has to step in and bring more legislation on both sides to make the fixed hours less fixed and the flex hours less flexible. But the employers also need to be responsible employers because I find it difficult to understand that there are still employers out there who put people on the bike without proper insurance. But it does happen. All three have to play a role.
Moderator – One final comment and we’re out of time.
Eynat Guez – I agree with all that you said. To take your comment on manufacturing clothes with child labor, the people in the gig economy have the power. We need to ask them to come work for us on certain terms. This is a completely different kind of mindset. You said that very clearly. This is how we should employ them to work for you. It’s not the other way around. There’s a huge difference.
Moderator – Thank you. So, we have a lot of work to do. A lot of passion though and we’ll get to a solution eventually with all the minds working on it. Thank you for the great conversation. Thank you to all of you for being here.