On-demand economy: A good gig

Our awards system is ill-equipped to accommodate the growing contingent of workers who prefer the flexibility of the gig economy. By Ben Small.

If I told you that you could engage in work that didn’t require a job interview, didn’t require a uniform, and didn’t require you to show up for shifts or apply for leave, most people would think that it hardly sounded like a job at all – and that’s because it isn’t. Work in the on-demand economy is not a job within the construct of a traditional employer-employee relationship, yet Labor have taken aim at regulating the on-demand economy and its workers.

Labor describe this as “work of last resort” and a system that promotes the “exploitation of workers” in a “plague and pandemic of insecure work”. Stunningly, University of Sydney academic Joellen Riley appeared in front of the Senate’s job security enquiry and went as far as to say, “I suspect the same arguments were made a couple of centuries ago in the deep south in the cotton plantations”.

The Transport Workers Union (TWU) are using deceptive methods to smear an emergent sector that they can’t control or recruit members from. False and misleading claims made by the TWU on worker satisfaction and earnings are based on a self-selected survey of only 200 people – yet Uber’s latest data was based on a survey that was sent to every active user (worker) nationally and attracted 19,000 responses. Unsurprisingly, the on-demand platforms report very high levels of worker satisfaction and that those workers prize flexibility above all else. Flexibility must no longer be a dirty word in Australian politics. These workers choose the market-driven flexibility of the on-demand economy that our broken and constrained system of workplace relations simply can’t provide.

These demeaning arguments from the socialist left are fundamentally detached from any basis in fact. This is not a feudal dispute between the wealthy elite and the impoverished peasants of the Dark Ages, and nor is it taking place in an economy devoid of job opportunity with massive breadlines. In modern Australia, there simply isn’t a gross power imbalance that unfairly favours bosses.

Take someone who decides to defray the cost of their commute by ride-sharing – a good outcome for the customer, the driver, the environment, and city congestion. This isn’t a job where the driver needs to apply, turn up for a shift, wear a uniform, and receive a fixed wage. In fact, the evidence overseas is that when the rigidities of traditional employment are imposed on the on-demand economy, the work isn’t regulated but it does disappear. When Uber drivers in Geneva were converted to employees, 77% of them were forced out of the system. In New York City, the introduction of caps on the number of rideshare drivers, designed to increase earnings, has led to mass protests as thousands of people are deprived of the ability to earn any money at all.

Yet, Labor and their union masters are determined to control these Australians, deciding from Canberra who will work and the circumstances in which that work occurs. Staggeringly, the TWU’s Michael Kaine even claims that “those individuals have no capacity to determine what the value of their work is and what they should be paid”.

Instead, the unemployment rate has dropped to 5.6% and the rising participation rate means more Australians are in work now than at any time in our nation’s proud history. Job vacancies have hit a 12-year high, and the biggest growths compared to a year ago are in lower-skilled and more accessible sectors like personal services, labourers, and sales.

Tens of thousands of Australians turned to the on-demand economy during the pandemic. The Australian Retailer’s Association recently told the job security committee that “the on-demand economy allowed for these front-line service employees to quickly pivot and supplement their reduced income through offering their skills in the gig economy.” I believe those Australians should be able to make those decisions themselves – and they are, by the tens of thousands. The on-demand economy is growing exponentially, rapidly attracting both new workers and new customers. Australians want in.

They want in because our inflexible system of awards is beyond what most mere mortals can comprehend. Take the more than 100 different pay rates in the Retail Award, or the absurdity of being paid a different rate to deliver a plate of food to a customer than to collect the dishes afterwards under the Hospitality Award – this inflexibility and complexity means fewer jobs for Australians. So-called independent contracting is simply a market response to the total unworkability of traditional employment structures for those who want to earn money outside other parts of their life, such as caring responsibilities, a primary job, study, or sport.

People work in the on-demand economy because it works for them. Our response shouldn’t be to force regulation onto this emergent work and thereby force too many people out of the work they choose to do – instead we could take heed of the signal that our traditional employment system is broken. In the context of our changing economy, flexibility unlocks work for those who want it, drives productivity growth and in turn leads to better outcomes for all.

Ben Small is a Liberal Senator for Western Australia.