May 8, 2021

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Don’t let small businesses rewrite the law

3 min read


When your business model turns out to be against the law, do you change the business model or do you change the law? Gigantic economy companies like Uber, battered by repeated legal defeats, want to do the latter. If they are successful, then a handful of businesses, most of them loss-making, will profoundly change the world of work.

Uber lost a crucial case in the UK’s Supreme Court on Friday, when judges ruled that it had wrongly classified its drivers as self-employed. While drivers can work when they want, Uber sets their rates, selects their customers, monitors their performance, and “turns them off” if they don’t measure up. Yaseen Aslam, one of the drivers who brought the case, says even the freedom to choose when to work is a mirage: Drivers who don’t log in at peak times and drive long hours won’t cover the cost. car payments, insurance. and maintenance. “It’s mentally exhausting, people don’t see that side,” he told me. “The worst part is when they turn you off, it’s so inhuman.” Concert companies have lost similar legal battles in California, France, Spain, and the Netherlands.

It sounds like the end of the legal route to the odd-job economy. Companies will either have to give workers more control (difficult to combine with an integrated, on-demand service) or employment rights such as minimum wage and sick pay, which would likely drive up prices. . Employers must also pay more taxes. Consumer demand for these apps may or may not resist if the services stop being too cheap. For Jeremias Adams-Prassl, professor of law at the University of Oxford, the “most important message” of the British decision is that “you cannot choose whether the law applies to you or not”.

But there is another possible outcome. Rather than adapting their business models to the law, companies in concert can try to change the law to suit their business model. They have already been successful in California, where they spent $ 200 million convincing voters to support Proposition 22, a measure that allows them to continue to treat workers as self-employed with enhanced benefits and protections. Concert societies lobbyists now grow “Prop 22” as a national model in the USA. They are also trying to strike deals with unions that would give some representation to workers on the scene while keeping their status as independent contractors in line.

Companies are trying a similar approach in Europe. Uber published a ‘white paper’ this month proposing to ‘work hand in hand’ with EU policymakers to create ‘new industry standards for platform work, while ensuring that it is recognized and valued at the legislative level ”. Uber could also push UK government to pass new legislation redefine the status of workers.

It is undoubtedly true that labor market rights need a 21st century update. True independents would benefit transferable benefit funds to which different clients could contribute, for example. The inflexibility and unpredictability of work in some low-paid sectors requires urgent regulatory attention.

But it is important not to confuse these ideas with the solution offered by the concert companies. They want to codify the idea that a company can exercise much of the power of an employer with little responsibility. A new law would encourage other companies to downgrade or “Uberize” certain employees to save money. After Prop 22 moved to California, Albertsons, the supermarket chain, informed the employees of delivery drivers, they would be replaced by contractors. “Workers in all kinds of industries – from agriculture to zoo keeping – could benefit from the structure provided by Prop 22,” wrote Shawn Carolan, partner of first Uber investor Menlo Ventures, in a recent article.

What would a world be like with many more uberized workers? On the plus side, it would make some services cheaper (like Uber did with taxis). This would allow the middle classes to enjoy levels of convenience once reserved for the rich. But is this gain worth it to widen the tax base and create an underclass of workers? Last year Uber CEO Dara Khosrowshahi shared his vision from the future. It was not a question of technology or freed workers. It was mundane and – to my ears – somewhat dark. “Eventually, you know, I can see a world where if you want to take money out of the bank, someone will come and deliver you money, right?” This will be all you want delivered to your home. “

sarah.oconnor@ft.com



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