When the first gig platforms launched in Australia a decade ago, lobby groups and politicians who hoped to maintain the status quo filled the media with horror stories.
They said consumers would receive second-rate goods and services through gig platforms and claimed gig workers would be exploited. But Australians weren’t scared. Today, virtually all of us use gig platforms day-to-day.
As you might expect, younger Aussies have led the way. By 2018, more than 50% of Millennials were either doing gig work or considering it instead of a full-time job. And the growth continues, both here and overseas. In the United States alone, the gross volume of the gig economy in 2021 reached US $347 billion.
This is a work model that has more than proven itself. Gig workers in Australia now number in their millions. Far from feeling exploited, they have embraced the flexibility and choice that the model provides.
In the process, the whole country has benefited. Gig platforms were vital during the first waves of COVID-19 and the recent floods, when gig workers stepped up to meet extra demand for logistics. Yet certain groups continue to make the same old accusations. Specifically, they say gig platforms are heartlessly denying workers benefits and protections out of greed.
What they fail to mention is that current legislation makes it very difficult for a company such as Drive Yello to provide these benefits without crippling itself financially or making the entire business model redundant.
As it stands, offering a single benefit can lead to gig contractors being classified as full-time, part-time or casual employees. When that happens, the gig platform becomes an employer and must provide contractors a whole host of additional benefits.
In other words, it is wrong of the naysayers to assert that gig-economy startups do not want to support their contractors. We do. But it’s just not viable when providing one benefit obliges us to add more and more on top of the inherent benefits of being a gig economy platform.
The reality is this: gig workers are not employees in the traditional sense, nor do they want to be. They want flexibility and independence. They appreciate being able to work where and when they like, and they know they can be selective about which jobs they accept.
As for the gig platform, it is just that: a platform. It allows customers and contractors to connect but cannot force either group to act. I don’t believe gig workers should be left to fend entirely for themselves. However, the assistance they receive should be relevant and proportionate.
Legislative change could make this possible almost immediately. If we recognise gig work as its own category rather than stubbornly clinging to an old workforce paradigm, gig platforms can do what’s fair, rather than being forced into ‘all or nothing’ scenarios.
At Drive Yello, we are already making plans to roll out additional benefits and protections when legislation allows. We believe providing tailored, meaningful support to gig workers in four key areas – superannuation, tax, insurance and fair pay – is a win-win strategy.
When it comes to super, a platform could offer to deduct contributions from workers’ pay. The deductions could even be made mandatory – as long as that did not trigger re-classification.
Tax admin could be provided in a similar way: the gig platform could offer to deduct an indicative tax liability every pay cycle, and any excess or shortfall could be reconciled with the ATO on a quarterly basis.
But again, providing this relevant support to workers should not oblige the gig platform to arbitrarily provide even more. Then there’s insurance. Many gig platforms – mine included – are ready to fund or subsidise overarching insurance plans to protect workers from loss of income due to injury.
Yet current legislation makes this impractical. Australia is clinging to rules that actively prevent us from protecting contractors. It’s absurd. Of the four issues, fair pay is perhaps the thorniest. Guaranteeing an hourly or daily rate is simply not practical because no two gig workers use a platform the same way.
There is a larger conversation to be had about fair pay, particularly for those gig workers who earn income exclusively on gig platforms. A per-job rate for gig workers should be up for discussion and can be tied to the expected time spent on that job. But minimum hours and hourly rates borne by a single platform when they are using multiple simply isn’t appropriate or fair to the platform businesses.
The open discussion around these matters won’t eventuate unless we agree to develop a new classification for gig workers and stop trying to force a square peg into a round hole.
These are just some of the steps we could collectively take to make the gig economy a productive, fair, protected and viable workforce option. Entrepreneurs within the sector have no shortage of ideas and are itching to innovate to grow industries within Australia. Giving us the freedom to offer more without the threat of legal action can only be a good thing for the industry and independent contractors.
My sector wants to keep innovating, growing and providing more options for work for Australians. A new classification for gig workers can make that possible.
It’s time for the vested interests who are campaigning against gig platforms to accept that the world has changed, and for our legislators to adopt a new stance that recognises the realities of a modern workforce and builds the structures needed to nurture it.
Steve Fanale is founding CEO of Drive Yello.