Tackling precarity in the platform economy—and beyond

To focus on online platforms in isolation would miss the point that they are part of a wider phenomenon of spreading and intensifying precarity at work.

In our increasingly digitalised world, a crucial role is played by online platforms. These platforms—dynamic websites which constitute digital public squares or marketplaces—affect the economy and our society in various ways and their regulation (or lack thereof) is increasingly the subject of public and political debate. Whether it be the way in which Facebook deals with personal and public information, the influence of Airbnb on our habitat, Uber’s effects on the taxi sector or the working conditions of Deliveroo couriers or tech-workers on Amazon Mechanical Turk, the ‘disruptive’ effects of the activities of the platforms regularly make headlines.

A key social problem is the labour status of those working in the online-platform economy. These drivers, riders, cleaners, designers, translators, technicians and others are often formally contracted as independent and their working arrangements tend to exhibit features which are difficult to square with the traditional employment relationship. These include use of their own materials (such as the driver’s car), autonomy concerning working hours (logging into work via a smartphone app), the short duration of the relationship (translation of perhaps a single sentence) and its multilateral character (the platform linking the producer and consumer).

At the same time, the worker may well be economically dependent on the platform work, the contractual independence can be constructed in rather artificial ways—such as if a driver works full-time for a platform for several years yet remains formally contracted per journey—and the platform can exert significant control over the work and the person performing it. Furthermore, their ‘independent’ status often means platform workers lack the benefit of the social, labour, health and safety protections which in most countries are connected to an employment contract—even if their precarious working conditions and socio-economic position very much require such protection.

Indeed, online-platform work presents a range of old and new health, safety and wellbeing risks for workers, physical and psycho-social. Moreover, studies suggest that prior health problems may in fact be a main reason initially to engage in digital online-platform work, such as on microtask platforms. While this means that online platforms can provide an alternative means for people with health impairments to carry on work and earn some income, contributing to social and labour-market inclusion, it also means that many online-platform workers are already in a vulnerable situation, which the work may aggravate. Beyond the individual level, the lack of social-security contributions and tax revenues which often ensues from the independent status of the online-platform workers presents a sustainability problem for social systems more generally in the long run.

Not unique

Yet these challenges as such do not seem to be unique to the online-platform economy. Partly due to the evolution of labour markets and society, partly due to the economic crisis (and labour-market policy responses thereto) and facilitated by the digitalisation of society and the economy, the past few decades have seen an increase in the use of non-standard forms of employment and work: casual work, on-call work, temporary agency work, informal work and dependent self-employment. Many of the working arrangements established by the online platforms match, closely resemble or mix these forms of atypical work, sometimes with the only difference that they make use of a digital tool.

True, some online platforms seem to have built their entire business model and technological infrastructure around this precarity, which does seem to lift the overall problématique to a higher level in some respects. Nevertheless, it would seem useful to discuss the precariousness of work more generally in an holistic manner, rather than focusing just on the challenges of online-platform work, perhaps because this is felt to be a ‘new’ and ‘trendy’ development. There is, unfortunately, nothing new or trendy about precariousness.

National regulators have found it difficult to cope with these developments. The online-platform economy is a bit of a moving target, as it has deliberately avoided rule-compliance and, importantly, due to the persistent narrative of its ‘innovative’ nature, presents itself as something to which regulation should not apply or should foster rather than ‘stifle’. More generally, economic conditions and austerity policies over the past decade have made poor work quality more prevalent and more difficult to tackle at the same time.

Momentum building

But the times they are a-changing. In November 2017, the presidents of the EU institutions solemnly proclaimed the European Pillar of Social Rights. Several legislative acts, such as the directives on predictable and fair working conditions and on work-life balance, have already been adopted as part of the pillar process. Far from dissipating, the momentum towards a Europe of social rights continues to build. In her speech to the European Parliament, the incoming president of the European Commission, Ursula von der Leyen, announced her ‘action plan to bring our Pillar of Social Rights to life’, through a minimum wage and unemployment-benefit scheme, as well as a child guarantee and investment in education.

This may be the time to push for a specific yet holistic action combating poor-quality work, embracing online platforms alongside a range of other non-standard forms of employment. The social pillar could be used as the pathway to launch an ambitious (re-)regulation of work at EU level, upgrading and complementing existing measures on atypical work to provide a truly effective, and truly social, minimum floor of workers’ rights.

When it comes to the platform economy more specifically, a fundamental shift in narrative is in order. Instead of treating it as something precious, unique and tender—which needs to be cradled and protected from intrusive rule-making—it should be recognised as featuring (as a rule rather than the exception) harmful trends and practices which demand regulation, with minimum standards at EU level.

Indeed, it appears that the online-platform economy is growing ‘for the wrong reasons’—not to deliver new, innovative and better-quality services for the benefit of customers and with the side-effect of quality employment opportunities, but as ‘unfair competition’ undercutting existing industry operators. The profit is generated on the back of the individual worker’s wellbeing and the welfare state’s sustainability. If these ‘externalities’ were properly factored into the calculation of the economic effects of the online-platform economy, it is doubtful that it would generate a net benefit for most of the individuals working within it, or for society at large.

This contribution is based on the recent paper by the author ‘Tackling social disruption in the online platform economy’, published by the Foundation for European Progressive Studies. The paper is written in a personal capacity and does not represent the official views of the European Commission.