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Here’s How BC Should Protect Gig Workers

New business models are exploiting workers and hurting employers who provide better jobs.

Iglika Ivanova and Jim Stanford 22 Jun 2023The Tyee

Iglika Ivanova is a senior economist with the BC office of the Canadian Centre for Policy Alternatives and Jim Stanford is director of the Centre for Future Work.

[Editor’s note: As B.C.'s gig economy grows, 61 leading experts in labour law, policy and economics have signed an open letter calling on the provincial government to create stronger protections for workers. In association with this piece on the detrimental impacts of gig work on the labour force, we've included a list of the signatories who are asking for change.]

The last decade has seen the rapid expansion of new business models in numerous industries, which engage workers to provide services through on-demand digital platforms.

Details of these models vary, but typically they compensate workers on a per-task basis, offer no guarantee of continuing work, require them to provide tools and capital equipment and classify them as “contractors, not employees" — thus denying them normal statutory protections such as minimum wage, workers’ compensation, CPP and EI benefits, or supplementary employment benefits (like pensions, health care and insurance).

This business model first came to prominence in passenger transportation services (so-called “ride share” firms like Uber or Lyft), but is spreading quickly into other types of business — including courier services, food and package delivery, technology services, design, teaching and tutoring, home repair and maintenance tasks, and human and caring services (such as aged care, home care and child care).

Studies indicate that hundreds of thousands of Canadian workers now participate, to varying degrees, in this form of employment.

Despite its high-tech image, the core employment practices of these businesses (including on-demand engagement, piece-work compensation, contractor status and a paid intermediary which matches workers with end-users) are familiar from centuries of previous contingent or insecure work practices (including labour hire and sham contracting).

This business model allows platform firms to avoid normal employment expenses and responsibilities, to shift costs and risks (including risks associated with fluctuations in business conditions) to workers, and thus artificially reduce their labour costs. In fact, the cost advantages some platforms have over traditional service providers stems from exploiting gaps in the current employment standards regulation and enforcement — not from genuine advantages in productivity or efficiency.

Around the world, digital platforms are now being challenged to reform their employment practices and provide improved security and protection to platform workers. These challenges have been conducted through the courts, through collective bargaining and through legislative change. The main goals of reform have been to:

Without policies to limit and roll back these practices, the platform model will spread into more industries and occupations — risking the livelihoods and even the lives of platform workers, imposing undue costs on public health and income security programs and undermining the viability of other businesses which accept the normal costs and responsibilities of being employers.

In short, the uncontrolled expansion of platform work is economically, fiscally and socially unsustainable.

Platform businesses claim the application of normal employment standards would interfere with their “innovative” business models. This is false: international experience proves that digital dispatching of fares or delivery tasks is entirely feasible within the context of a normal employment arrangement.

The platforms also claim their workers put more priority on the supposed “flexibility” of on-demand work than on normal protections (like minimum wage). This posits a false choice and is based on a very misleading notion of “flexibility.” Again, many other businesses allow workers to opt in and opt out of work, while still guaranteeing minimum employment standards. This is technically and economically feasible for digital platforms, too, so long as they manage labour supply more actively (rather than keeping a permanent pool of drivers on unpaid standby).

At any rate, the “flexibility” of app-based work is always constrained by consumer demand (compelling app-based workers to work during busy times) and by often-long waits between assigned jobs.

There is now ample experience in other jurisdictions with rules and policies which improve the lives of platform workers, while still permitting these businesses to function (albeit in revised ways).

The B.C. government is considering options for regulating platform work in the province. This government has demonstrated a positive commitment to strong labour standards in many areas of policy. It is important that this commitment be applied consistently to platform work, as well. Since ride-share and delivery platforms are the largest and highest-profile segments of the broader platform economy, these new regulations must focus first and foremost on ensuring that these businesses fulfil the same labour and fiscal obligations as other employers.

Core principles which should guide the B.C. government’s approach to regulating ride-share and delivery platforms include:

Digital platforms can offer valuable services to consumers, and decent work for those providing those services. But the current practices of these firms, shirking normal employment obligations and standards, imposes unacceptable costs and risks on platform workers, other businesses and the broader public.

B.C. has a unique opportunity to set a high standard in sustainable, responsible platform work. We urge the provincial government to do so.  [Tyee]

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