Commentary

Uber Probe Marks The End Of The Gig Economy's Beginning

It isn't the end, it isn't the beginning of the end, but it could just be the end of the beginning. Could Churchill's famous quote from 1942 about the smallest glimmer that things were going to change in the war accurately sum up Uber's position today?


Regular readers will know that I have long questioned the viability of app-based businesses that own no assets and rely on zero -hour contractors taking part in the so-called "gig" economy. While some may think it's a revolution in employment, I can't help but think of lines of desperate employee hopefuls queueing for the chance to get picked out for a day's work at a warehouse or farmer's field. It's the same thing, isn't it -- just the app takes the publicly standing around part out of the queuing up for a potential "gig"?

The latest challenge for Uber is the UK Government agreeing with members of the opposition party that a body will be set up within the Department of Transport to probe Uber's working practices. The Transport Minister, John Hayes, acknowledged that despite the upcoming Taylor Report into the "gig" economy, there may still be a need to look at how Uber operates.

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The language was pretty vague and there is no steer on what the body will do, when it meet, who will be on it and what its remit will be. There's also no meat on the bones yet as to what the Taylor review will conclude when it shines a light on the employment ramifications of gig economy apps such as Uber. However, a committee of MPs recently published a report that concluded companies that do not commit to employment contracts are "free riding on the welfare state" and should be forced to offer "employees" worker status.

Now, we don't know where any of this will go. It could just be some conclusions that gather dust on a shelf somewhere or possibly legislation to ensure that companies can't just employ someone when it suits them and instead require that they provide some form of commitment to a worker. At the moment, it just seems a little too convenient for gig economy firms. When there's work, people are informed and carry it out. When there isn't enough work, they don't -- and possibly rely on the state to bump up their income instead. Who's taking the risk there? Sounds like the UK taxpayer to me?

I suspect what will happen will be the usual blurring of lines. Recommendations will be made, pushing for all employees to have a form of worker rights, but surely there will be a way around it.

The takeaway for Uber is that the UK is one of the most liberal, pro-business economies in the EU. If it's having potential problems here, making its business strategy stack up, imagine what the rest of the continent is thinking. It has already paid huge fines across the EU and had to change some of the ways it works to fit in with local employment laws, most notably in France and Germany.

The UK most surely ranks as the most favourable market for Uber, yet trouble is potentially in the post. If the UK takes a hard line against the poster child of the gig economy, one can only imagine the repercussions will be felt across the EU.

Beginning of the end? Who knows? End of the beginning? Most definitely.

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