Time for Tech to clock-on? Uber and the death of the gig economy

02 November 2016


So that's it. The Courts have said Uber drivers are employees and Teresa May 's announced review of employment practices means we're all going to have to be wage-slaves, like it or not.

Not quite. An employment tribunal (not 'The Courts') has said that Uber drivers are 'workers', not 'employees'. That is to say they fit a specific statutory definition that means they are entitled to some specific rights, notably holiday pay and sick pay. They don't become employees: they don't get unfair-dismissal protection, nor maternity rights.

Despite Uber's protestations, the case in no way endangers their business model, merely their margins. Expect, after a lot of fuss, fares to rise. Don't, as both the Hitchhiker's Guide and Corporal Jones are wont to say, panic.

Instead, worry.

This blog is about the broader and medium-term implications for UK tech, although it is relevant to UK PLC/Ltd/LLP as well. I'm not going to tell you what the case says - the web is awash with alerts and analyses of which the best is Darren Newman's - but about what it might mean.

Because the pendulum is swinging and it's a bit of wrecking ball.

Perhaps 23 June marks the high-tide of Globalisation 1.01. That's when its losers said 'enough': we don't want to be flexible, international, open; we want to be safe. Pull up the drawbridge.

If you're reading this, you may recognise this tribe but you're not part of it. You watched, aghast, as 'they' put a moat between you and your markets, you and your investors, you and your labour-pool. And you are inside the castle and 'they' are in charge. Its walls are your prison.

Teresa May gets that we have new masters. She doesn't necessarily know what to do about it, but she gets it.

Hence the review. The Notting Hill Tories (remember them?) all but abolished statutory-employment protection when they brought in fees of up to £1200 to bring an employment tribunal claim, with a remission system so slow and fiendishly complicated that low-earners have simply not bothered to bring claims. That's caused real-hardship for people who've had their wages docked unlawfully: a small amount makes a big difference when you're near the breadline and you daren't even contemplate the cost of simply getting paid what you've earned.

The Government promised the Courts they'd review the impact of fees. They've been sitting on the results of that review for about a year, hence the hollow laughter from employment lawyers when Mrs May discovered she was concerned about workers' insecurities. The Cabinet in which she sat gleefully and deliberately caused a fair few of the very insecurities she is now reviewing and its successor, which she chairs, is sticking its pudgy fingers in its collective ears and la-la-la-ing to drown out the injustice and misery.

So they're being hit by the backlash. The government was shocked, shocked, to discover what was going on at Sports Direct with its systematic abuse of casual labour. The Employment Tribunal listened to Uber's platitudes about 'giving drivers the opportunity to develop their own business' and politely (just about) rubbished them. New unions fill the gap the lumbering, dying giants of old can't and crowd-fund cases against Hermes and Deliveroo.

Apart from impacting the EBITDA for a couple of rather useful apps, what has this to do with Tech? These are all instances of low-skilled, low-paid workers seeking such fripperies as some income when they're too ill to work, or maybe a few quid so they can take a holiday. We are but one step away from Oliver Twist asking for more. These people don't write code, there's no bidding war for their services. We don't have to put a pool table in the office for them, let alone make sure we're no more than 100 yards from artisan coffee.

It's the direction of travel. Tech needs flexible labour. In-demand engineers don't want to be tied down. Interns understand they need to build their CV. Start-ups have no cash but a really exciting idea that people are prepared to invest their own time in for the promise or even the hope of equity

And UK employment law, as much by accident as by design, up to now can just about accommodate all of that. Admittedly, it was already creaking under the weight of abuse. So-called interns were in some cases just free summer labour. So-called consultants, hiding behind 'personal service companies' were as much on the payroll in reality as the CEO. There were abuses and there were people who could catch the abusers: HMRC could enforce the minimum wage, the Tribunals police holiday and sickness pay.

But the guards have been starved of funds or locked behind prohibitively expensive fees. A 'business-friendly' climate made for a practical contempt for ordinary workers and their families. It costs money to enforce the law and the government hasn't got any (it's promised it all to Nissan) so it's likely to make some new laws, because words are cheap.

So instead of simply cracking down on abusers and dropping the fees-regime, both of which would go a long way towards sorting out the real issues, the Government might just proclaim a new regime for work, a new structure. Why else raise expectations with a review? Something Must Be Done.

New regulation.

Think of the Uber decision not as something which dramatically affects what Tech does now but as a warning sign. Society is finding complexity a bit tricky at the moment and Government is listening. What you might think is a necessary labour practice for your business that suits both you and your workers could be outlawed. There is a lot of bathwater to be thrown out and if we babies want to avoid going with it then we have to start screaming.

I'm doing my bit to start the infernal chorus of the infants here at Tech City News (at about 1:36). Do join me, everyone.


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