Building a fair working environment for the gig economy - a UK/South African idea takes shape

Profile picture for user catheverett By Cath Everett April 15, 2019
Summary:
In a bid to prevent a race to the bottom for the world’s seven million digital platform-based gig economy workers, the Fairwork Foundation has been set up to rate and score firms with an eye to encouraging fairer working practices. But will it be enough?

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There are now more than seven million gig economy workers around the world who use digital platforms or apps to gain access to outsourced contracts. But because they have no means of undertaking collective bargaining, they have little ability to negotiate decent wages or working conditions with employers who are often based in remote parts of the world.

As a result, a group of UK and South African universities have now got together to set up the so-called Fairwork Foundation  in a bid to help improve their working conditions. The move was the brainchild of Mark Graham, Professor of Internet Geography at Oxford University’s Oxford Internet Institute (OII), after he undertook research into the quality of available jobs among platform workers. He discovered that most were protected by neither employment law nor collective bodies, such as trade unions.

So taking inspiration from the UK’s Fairtrade and Living Wage Foundations, Graham set up his own with the help of his now partner in the project, Jamie Woodcock, a researcher at the OII. Initial financing was provided by the UK Economic and Social Research Council as part of its Global Challenges Research Fund New Models of Sustainable Development program, but has since been replaced by three years of funding from the German Federal Ministry for Economic Cooperation and Development.

The money was used to assemble a larger team of researchers, which comprised specialists in Information and Communications Technologies for Development from the Universities of Manchester, England, and Cape Town in South Africa, as well as labour law experts from the Universities of Oxford and the Western Cape.

The aim was to create the first rating system for working conditions in the digital platform economy in order to try and guard against a race to the bottom. The system, which was based on input from workers, unions, digital platform providers and policy makers, assesses the platform providers against five core principles, each of which consists of two key components: fair pay, conditions, contracts, management and representation.

The necessary evidence to compile scores is collected both from workers and by means of desk research, and up to two points can be awarded for each principle if platform providers meet the criteria.  Ratings are reassessed annually and interested parties are able to view both a single score out of 10 and a breakdown of how the score was reached.

Making informed choices

The goal is to help workers distinguish between good and bad employers, while also aiding consumers in making informed choices when ordering online goods and services. Graham explains:

We want working conditions in the platform economy to improve. By giving every platform a score, we have seen that some platforms have already been willing to make changes to get a higher score. But we think the scores go beyond that. The Living Wage Foundation is an interesting model here. Trade unions have used the living wage as a target for their negotiations. We hope our scores can serve a similar function.

A further aim is to encourage those platform providers that have an interest in becoming certified to improve their practices based on any shortfalls highlighted by the rating system. The scheme was piloted in South Africa and India last year, and the UK and Germany will be added to the mix this year.

During the pilot phase in South Africa, this kind of collaboration led to a commitment by the Bottles alcohol delivery app  to support the fair representation of workers without any company interference, while the NoSweat freelance recruitment platform introduced change across all five areas. It implemented a formal policy to pay more than the minimum wage after costs and a clear process to ensure customers agreed to protect workers’ health and safety. It also initiated grievance procedures for workers to complain about their working conditions. Graham says:

It’s hard work to get platforms to open up to you and share information. We had to slowly build trust with some of them. Ultimately, we don’t think we’re a threat to them and, with everyone we’ve met, we’ve tried to suggest ways that they could nudge their platform towards fairer working practices. It has been really rewarding to see some of them take those steps. Many platforms also seem to really want to do the right thing. Our frameworks have been a useful guide and benchmark for them.

But Geraint Johnes, Professor of Economics at Lancaster University Management School, is not surprised that it has proved tricky to get platform providers on board. As he says:

The question is whether it’s something the platform providers value. But going on past performance, their focus is heavily on profitability as they operate in very competitive sectors, which means keeping an eye firmly on the bottom line. So I don’t see them rushing to adopt this metric - although if the ball gets rolling, it could become more important for them to get this kind of badge. And if there were some bite behind it, such as legal compliance, they’d certainly be more likely to respond.

An information economy

But despite his reservations, Johnes still believes that the creation of the rating system could prove to be a useful exercise. He explains:

Markets generally work better if there’s good information around, and there’s certainly scope for the Foundation to provide information that isn’t currently easy to access. This could help workers decide to go with one employer over another, which would bring competitive pressures to bear. So it could prove effective – just not necessarily in the way they expected.

In other words, while he does not believe that digital platforms are likely to change their ways as a result of receiving a poor rating, he does believe they might decide to do something should they start losing their talent pool to rivals.

Mike Wachholz, Global Head of Contingent Workforce Solutions at recruitment consultancy Alexander Mann in the US, on the other hand, believes that the rating system “is focusing on the right aspects” and could have a positive effect in provoking thought and debate among the many employers that are struggling to accommodate a more “fluid” workforce.

But ultimately to make a real difference to the lives of platform workers, particularly those on low incomes, he considers it will be necessary to make significant changes to employment law and regulations, which are currently lagging behind market requirements.

Technology and the market evolve more quickly than the regulatory environment – and that’s always the case, no matter where you are in the world. So the Fairwork Foundation’s rating system is good and highlights key areas to focus on, but the long-haul challenge is to get government and regulatory bodies to engage in areas, such as healthcare portability, retirement and savings. These are complex issues that are currently not supporting gig workers and the new engagement model adequately. So ventures like the Fairwork Foundation are useful for the short-term, but government regulation will be necessary for the long-term.

My take

Ironically, it seems the very platforms that advocated rating workers based on their performance are now being subject to a rating system of their own in an attempt to promote fairer working practices.

On the downside though, the Fairwork Foundation currently only has financing until 2021, at which time the money runs out. As Graham concludes:

The project has lots of moving parts and we have no plans to pack it in after 2021. So we’re on the look out for funders who might be willing to support the work we’re doing.