OPINION | What happens to labour bargaining as the gig economy takes off?

Picture: iStock
Picture: iStock
  • Technology has reformed traditional ideas of established industry norms and practices, with "independent contractors" huddling around the digital platforms of the "gig economy".
  • This has implications for worker rights and labour bargaining. 
  • The authors take a look at some examples including Uber and the creative industry.

The rapid rise of disruptive technologies conceived in the glass headquarters of start-ups thickening across the breadth of Silicon Valley and Shenzhen have created ripple effects throughout the world.

Technology has reformed traditional ideas of established industry norms and practices, with "independent contractors" huddling around the digital platforms of the "gig economy".

Structured as a free market system where temporary positions are common, and firms hire "independent contractors" for short-term commitments, the gig economy has given birth to Uber, eBay and more locally, SweepSouth.

These platform firms are premised around individuals leasing assets or rendering services in a peer-to-peer environment. For some sectors like the creative industries, the gig economy has been a defining feature of the work relations for time immemorial.

Traditional industries such as hotels, taxis and brick-and-mortar retailers have experienced significant disruption with market share declines due to the migration of labour to the flexible modes of accumulation and work provided by platform firms.

However, while services such as Uber have grown to have multi-billion-dollar valuations, the labour relations underpinning the services have been called into question in the union and regulatory environments.

Labour bargaining precarity

Worker organisations continue to play an important role in the labour outcomes and workplace equity of its members. In South Africa, participants of the creative industry, for example, will lament the need for labour market reform to ensure they can organise in a way that can benefit them as well as improve the quality of their work experience.

In its 2015 Doing Business Report, The World Bank argued that "employment regulations are unquestionably necessary to protect workers from arbitrary and unfair treatment as well as to ensure efficient contracting between employers and workers… " and in the following year further argued that "under-regulation in the areas of working time and minimum wage can have harmful effects on productivity and exacerbated the effects of macroeconomic shock."

This suggests that in a Covid-19 impact economy, gig economy workers are likely to face harsher conditions and that their "independence from labour bargaining" leaves them particularly vulnerable. So as the gig economy becomes more prevalent in the ways of work, what lies ahead for gig workers and the future of collective bargaining in South Africa?


Ambiguity in titles – the Uber Case Study

The difficulty in arresting the decline in working conditions for gig workers lies in the ambiguity in classification both for gig economy companies and workers alike.

Uber, for example, has changed tack and pioneered itself as a technology company and by implication, argued that drivers aren't part of its core business. This while a report from JP Morgan Chase Institute examined payments between 2013 and 2017 and found that Uber drivers' income had declined by 53% over the period, with the lack of labour market mobility and labour bargaining posing a challenge.

Drivers on the Uber service are referenced as 'independent contractors' by the service. However, after a spate of driver deactivations in Johannesburg in 2017, drivers filed a case with the CCMA arguing that they were employees. Their argument posited they had to perform their duties personally, were not contracted directed by customers and their work and performance was largely regulated through the Uber app. The CCMA found in favour of the drivers and thus intensified the scrutiny around Uber driver titles.

Workers in the creative industry have been fighting this fight for many years and continue put pressure on legislators to adequately define the roles of all participants in a way that does not unfairly prejudice anyone in the sector.

Organising gig employees

Uber drivers form part a broad group of gig workers including freelance creatives, software developers, and musicians whose classification sees them operate under increasingly precarious and unequal circumstances.

The role of the trade union movement is often considered to be receding, with no tailored approach to collective bargaining and regulation in the sector.

However, the union movement has historically ensured that workers are entitled to their universal rights declared by the International Labour Organisation. With 'independent contractors' often been looked at more and more as employees, unions may experience a resurrection of sorts, revisiting their traditional models of collective bargaining to save a section of the labour market that finds itself under an increasing amount of pressure as platform economies become more omnipresent.

Sifiso Skenjana is Chief Economist at IQbusiness and Selabe Kute is Risk and Analytics Associate at IQbusiness. Views expressed are their own.  

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