Politics & Policies, Report

Platform Work – Regulating it

Evolving use of digital technologies and new business models, among other drivers, have given rise to online platforms that facilitate the emergence of platform-mediated work, such as “crowd work”, “gig work”, and other forms of often on-demand labour. Workers in platform markets often benefit from low entry barriers and flexibility, which can facilitate the labour market integration of underrepresented groups. However, policymakers have raised concerns about working conditions in platform work, in particular how to ensure job and income security, access to social protection, overall career development, and rights to collective bargaining. This Going Digital Toolkit policy note describes the policy issues related to platform work and identifies innovative policy initiatives to improve the quality of these jobs and enable workers to take advantage of new opportunities in the changing world of work.

Improving working conditions for platform workers

Many countries have sought to improve working conditions for the most vulnerable platform workers. Even though formally classified as self-employed, some platform workers share some characteristics of employees (e.g. they cannot set their own rates of pay, have to wear a uniform or cannot send a replacement to execute their tasks). This means that they experience some elements of dependence and/or subordination in their working relationship and, therefore, some vulnerabilities. Moreover, some platform workers who may have few or no outside options find themselves facing a power imbalance vis-à-vis the platform operator, which could result in pay and working conditions being lower than would be the case under perfect market conditions.3 Yet, because they are classified as self- employed, vulnerable platform workers will generally not benefit from the same labour law protections, collective bargaining rights (which may itself increase the power imbalance), social protection, and access to training as employees.

Governments should ensure that all workers in the labour market have access to an adequate set of rights and protections, regardless of their employment status or contract type, and guarantee a level playing field among firms by preventing platform operators from gaining a competitive advantage by avoiding their obligations and responsibilities. This may be particularly challenging for platform work performed digitally and potentially connecting workers and clients across multiple jurisdictions, and may require an international approach. Some attempts to extend labour law protections to platform workers and to improve their working conditions generally are discussed below.

Extending collective bargaining rights to platform workers
While there are several possible solutions (including government regulation, labour law enforcement and efforts to address the sources of monopsony power), collective bargaining can be a flexible and complementary tool for giving platform workers more say on their working conditions (while tailoring solutions to the sector or occupation), and countering power imbalances between platform operators and platform workers (OECD, 2019[6]). However, the standard approach in antitrust enforcement has often been to consider all self-employed workers as undertakings (i.e. essentially as businesses) and therefore any collective agreement reached by platform workers as a cartel.

Indeed, the recent situation faced by rideshare workers in Seattle illustrates this point. In order to increase the wages and improve the working conditions of drivers on ridesharing platforms, the city introduced an ordinance to allow the workers to collectively bargain with ridesharing companies. However, the law faced a series of legal challenges on the basis that it violated anti-trust laws, and has not been implemented (Remaly, 2020[16]).

There are some countries forging different paths for granting collective bargaining rights to the self-employed. In some cases, regulators and enforcement authorities have taken a case-by-case approach to avoid a strictly procedural analysis of cases involving those workers with little or no bargaining power and exit options. In several countries (e.g. in France, Italy and Spain, among others), independent unions of platform workers are already de facto negotiating working conditions for their members even if they are classified as self-employed without any intervention from national antitrust authorities (OECD, 2019[5]). The risk associated with this route is that it potentially creates uncertainty since it could be reversed without any legislative reform.

However, this type of approach may receive further support from the European Commission in the future. In March 2020, the European Commissioner for Competition said that she is examining whether the EU could help “people who work in a weak negotiating position [by giving some] sort of European level guidance as to how to allow people to organise” without it being seen as a cartel (White and Turner, 2020[17]).

Other jurisdictions have followed the approach of establishing an intermediate employment status that grants access to collective bargaining and in some cases, other labour protections, to platform workers. In February 2020, the Ontario Labour Relations Board ruled that Foodora couriers were dependent contractors of the food-delivery company, on the basis that they more closely resembled employees rather than independent contractors. Dependent contractors fall under the definition of “employee” under Part I of the Canadian Labour Code, which applies to collective bargaining in the federally regulated private sector. This decision therefore has cleared a hurdle towards potential unionisation and collective bargaining, and has set a major precedent in the jurisdiction for other platform workers.

Unions and platforms themselves also have a role to play. Some independent unions have been created (e.g. in Italy and the UK), especially in the private hire and food delivery sectors. Unions’ engagement with platform operators on behalf of non-standard workers has paid off in some cases, with the signature of collective agreements in Sweden and Denmark. In Italy, following a government threat of worker reclassification by decree in summer of 2018, food delivery platform operators started negotiating with rider associations over working conditions.

Social dialogue, if not formal bargaining, has also emerged as the outcome of governments’ engagement with platform operators to address some of the issues related to platform work. The “social responsibility charters” discussed below are one such example. Along the same lines, but based on the initiative of a crowd-working platform, a code of conduct has been established in Germany and signed in 2017 by eight Germany-based platform operators.
Beyond formal bargaining, platform operators can take initiatives aimed at giving workers the possibility to express their concerns – although this is not a sufficient substitute for legally binding agreements. Uber, for example, embraced the creation of the New York City Independent Drivers’ Guild (IDG). The IDG cannot negotiate on behalf of drivers, but it allows channelling their concerns through monthly meetings with the company’s management.

Introducing a minimum wage

Given concerns about imbalances of power and some evidence that some platform workers earn below the minimum wage (ILO, 2018[18]), it is worth considering how mechanisms to achieve fair pay could be extended. For salaried employees, a legally binding minimum wage can help to prevent exploitation and address in-work poverty. Many studies of minimum wage impacts find that small increases in the minimum wage from a moderate level have no negative employment effects (Manning, 2011[19]). This is contrary to standard theory, but consistent with monopsony power and could suggest that there is some scope to set a minimum wage that exceeds the wage that would otherwise prevail in the labour market without harming employment levels (Card and Krueger, 2016[20]).

However, there are significant practical difficulties to extending minimum wage legislation to platform workers (for a fuller discussion, see OECD Employment Outlook 2019 (2019[6])). Two such challenges include: 1) determining what counts as work (i.e. should platform workers be paid for the time that they have an app open and/or the time they spend waiting/searching for tasks?) and 2) how to deal with work carried out across national borders. For instance, where a worker in a low-wage country is carrying out work for a client in a high-wage country over an online platform in a third country, which country’s national minimum wage should apply? In such cases, an international approach, discussed further below, may be required.

However, it is not impossible to overcome these difficulties. Since January 2018, for example, New York City has imposed a minimum wage for Uber and Lyft drivers. In response, Uber and Lyft filed legal challenges (which have been unsuccessful) and raised prices for passengers as a result (Campbell, 2018[21]; Nickelsburg, 2019[22]). They also started restricting access to the app when a driver is in an area of low demand, thereby reducing the number of working hours.

Some voluntary initiatives have already been taken by a number of platforms to put a minimum floor under wages. For example, Favor, an on-demand delivery service in the United States, guarantees its drivers a minimum hourly wage. While its “runners” are paid by task, Favor will make up the difference if they do not meet the pay guarantee (Kessler, 2016[23]). Upwork has a global minimum wage of USD 3 per hour for tasks that pay by the hour. In the United Kingdom, Prolific also has a minimum wage per hour of GBP 5.

Regulating working time

Traditional concerns around working time have centred on the issues of excessive working hours. This is why labour legislation usually contains rules limiting working hours and requiring periods for rest and recuperation, including weekly rest and paid annual leave. Moreover, in the case of certain micro-task online platforms, workers spend as much time searching for tasks as they do in performing them (Kingsley, Gray and Suri, 2015[24]). Some platforms have also introduced their own working hour limits4 (e.g. Uber requiring drivers to rest for 6 hours after driving for 10 hours continuously in the UK) and workers have adopted their own informal practices such as daily routines and quota setting to manage their time (Lehdonvirta, 2018[25]).

Data collected through platforms can help in monitoring working time. However, there are many complications with extending working time protections to such workers, including the fact that many of them have several clients/employers at any particular point in time, and therefore monitoring overall working time (and allocating responsibility) may be very difficult if not impossible.

Facilitating dispute resolution

When workers have “employee” status, employment protection legislation usually protects them against unjustified breaches of contract obligations on the part of employers, including remedies for unfair dismissal and wage theft. Moreover, in some cases, wage and working conditions are set unilaterally by platform operators (or the intermediary) or the requester (i.e. individual or company who posts tasks), with no scope for individual workers to negotiate any of the items in the terms and conditions that must be accepted in order to begin or continue working. For example, on certain micro-task online platforms, requesters can refuse completed tasks without providing a reason, in which case the worker receives no pay (Kingsley, Gray and Suri, 2015[24]). Similarly, terms and conditions of digital intermediation services often establish that platform operators can deactivate a worker’s account without providing a justification, sometimes even without previous warning.
The absence of adequate, simplified mechanisms of dispute resolution reinforces the asymmetry in the control of the relationship. Filing complaints with courts is expensive and time-consuming, and usually not attractive for workers in the case of small claims. In the case of micro-task platforms, these barriers are largely prohibitive, since the value of each task corresponds to very small amounts of money. Building in some kind of simplified dispute resolution system for platform workers is therefore desirable. For example, platform operators could be required to provide a dispute resolution process that places the burden on the client to demonstrate that the work has not been completed to the required standard and allows workers a reasonable time to re-do rejected tasks (Silberman, 2018[26]).

Similarly, platform operators could be required to communicate swiftly the reason for account deactivation to the worker. The statement of reasons should identify the objective grounds for the deactivation decision, based on the grounds set out in advance in the platform’s terms and conditions, and reasonably refer to the relevant specific circumstances that led to that decision. That statement could also be set to define the limits of the potential legal dispute in the sense that no additional griefs could be raised by the platform operator in the case of a lawsuit. A regulation of this type has been adopted by the European Parliament (2019[27]) and, in one court case involving a ridesharing service, the settlement included an agreement that in the future, workers would receive a hearing before an arbitrator prior to any dismissal (Kovács, 2017[28]).

Social partners can also play a role in establishing simplified dispute resolution systems for the platform industry. Indeed, in 2015 three German platform operators and the German Crowdsourcing Association drafted a Crowdsourcing Code of Conduct and established, in 2017, in conjunction with five other platforms and IG Metall, an “Ombuds office” to enforce the Code of Conduct and resolve disputes between platform workers and signatory platform operators (ILO, 2018[18]).

Improving occupational safety and health (OSH)

Self-employed platform workers typically take responsibility for ensuring their own safety and health. Characteristics of platform work which may increase psychosocial risks and work-related stress include potentially high levels of competition (encouraging long hours and risk-taking), the presence of algorithmic management, and the informal and multilateral nature of working arrangements.
Generally, the risks associated with platform work vary as much as the work itself. Many platform activities are in the transport sector, where the risk of accidents is elevated. Recent evidence suggests that the arrival of ridesharing is associated with an increase of 2-3% in the number of motor vehicle fatalities and fatal accidents as a result of increased congestion and road utilisation (Barrios et al., 2018[29]). Risk of injury may also be higher among platform workers without a regular workplace and/or in an environment or with tools over which they have little control. Platform workers offering domestic services may experience sexual harassment (Ravenelle, 2019[30]).

There are also risks associated with online work – both physical and psychosocial – such as eye strain; musculoskeletal problems; work-related stress; chronic job and income insecurity; and isolation. Platform workers providing online services such as video and social media content editing may be exposed to hate speech, violence and pornographic content, which may pose psychological harm. Again, the question of employment status is critical here as OSH regulation often only applies to employees.

Self-employed individuals are generally expected to insure themselves against occupational accidents. However, some countries have taken measures to improve protection in this regard for platform workers. In France, the legislator has granted certain rights to platform workers through the August 2016 El Khomri law (or loi Travail) on labour, modernisation of social dialogue and securing of professional careers. Specifically, where the platform operator determines the characteristics of the service provided and the worker earns more than EUR 5 100 per year through the platform, the platform operator must provide reimbursement for insurance against occupational accident or illness.

Strengthening social protection

Platform workers classified as self-employed will generally be treated the same as self- employed entrepreneurs in the social protection system, with lower access to benefits compared to employees. There are few examples of special social protection schemes targeted directly at platform workers (OECD, 2019[5]).
However, some countries are increasing access to unemployment, paternity and other benefits among the self-employed more broadly, which will make social protection systems more inclusive and adaptable and strengthen social protection for self-employed platform workers. For example, in Canada, the Quebec Parental Insurance Program (QPIP) is mandatory for self-employed workers (including those participating in the “gig” economy), providing better access to maternity and parental benefits. In November 2019, Ireland introduced unemployment benefit for self-employed workers. While there is little difference in the treatment for self-employed platform workers, one feature that distinguishes online labour platforms from conventional markets is that all transactions are digital and hence traceable (OECD, 2018[31]). This raises the potential for increasing social protection coverage and tax compliance by shifting activities from the informal to the formal economy.

Tackling discrimination

The emergence of the platform economy has an ambiguous effect on the ability to protect workers from discrimination. To the extent that platforms promote anonymity, they might help address discrimination. However, where such anonymity is not guaranteed, discrimination may be worse because of the lack of regulation and enforcement – see (Galperin and Greppi, 2017[32])for geographical discrimination on Nubelo (one of the largest Spanish-language online labour platforms) and (Galperin, Cruces and Greppi, 2017[33]) for evidence of gender discrimination, also on Nubelo. This emerging evidence suggests that governments should think carefully about how non-discrimination laws might be extended to online platforms and independent workers more generally. Calls for labour platforms to collect (and publish) data on outcomes for various groups could be one step in the right direction. In most European countries, anti-discrimination laws already cover the self- employed; exceptions include Lithuania and the United Kingdom, where they are not fully covered (European Commission, 2017[34])).

Encouraging platforms to exercise social responsibility

In France, the 2019 Orientation des mobilités law introduced the possibility for platform operators to draw up a social responsibility charter with a certain number of guarantees for workers. The administration may also approve the platform operator’s charter, provided that workers using the platform have been consulted in advance. The idea is that platform operators can make commitments to improve working conditions, with the understanding that their compliance with these commitments cannot be used to presume an employment relationship.

Matching jobseekers with opportunities in platform work

Governments may want to find ways to inform job seekers of new opportunities in the platform economy while at the same time ensuring the quality and sustainability of the work. For instance, the Finnish Public Employment Service has integrated a pilot called “New Forms of Work and Entrepreneurship” into their digital job-market platform (Työmarkkinatori) to offer opportunities in new forms of work and entrepreneurship to jobseekers by linking them to invoicing companies and digital job mediation platforms. Saudi Arabian government agencies have launched their own platforms: 1) Maroof, which allows individuals to set up online stores, and 2) Bahr, an online market for professional services.

Training jobseekers for opportunities in platform work
The Israeli Ministry of Labour and Social Affairs offers training in digital skills in order to allow workers to take advantage of opportunities in the platform economy. It operates a few small pilot programmes targeted at workers in new forms of work. One of these offers training to particular groups (e.g. people with disabilities, Arab women, ultra-Orthodox) on using online trading platforms and making a living on the global online market.

Adopting an international approach

Many countries share the twin goals of ensuring good outcomes for platform workers while at the same time wanting to take advantage of the opportunities that it offers. Where countries are facing similar issues and have common goals, peer learning can contribute to better policies. A number of countries are involved in international policy discussions and research streams on platform work and other new forms of work via the OECD and ILO (OECD, 2019[5]).

An international approach to regulations and guidelines may be particularly apt for platform work performed digitally (and potentially connecting workers and clients across the world) for issues such as how to ensure an adequate wage and working conditions. It may simultaneously reduce the burden for global platform operators to comply with different regulations across all of the countries where they operate while reducing the risk of a race to the bottom as countries compete to relax regulation in order to grow platform work.

One example is the Platform-to-Business regulation adopted by the European Parliament (2019[27]), which sets transparency and predictability obligations for online platforms. More generally, countries should build on the recent G20 commitment to promote decent work in the platform economy and consider ways of improving the working conditions of workers with little say over their remuneration and working conditions who provide services globally
– including best practice principles or guidelines, to which countries and/or platform operators could sign up. Countries could also agree rules on remuneration, taxation, social protection and employment protection for workers performing work digitally.


Chosen excerpts by Job Market Monitor. Read the whole story @ Regulating platform work in the digital age – OECD

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