What is The Gig Economy?
The gig economy is an expression used to refer to labour markets dominated by freelance work and short-term contracts instead of permanent jobs. Advocates for gig economy business models describe it as a flexible workplace that gives workers more power by allowing them to choose their working hours. However, more cynical individuals have described it as an exploitative workplace with poor pay and minimal workplace protection.
Gig workers are paid for each "gig" they do. So, for example, delivery drivers for companies like Uber Eats and Deliveroo are paid for each food delivery they complete, similar to how Bolt's drivers are paid for each journey they complete.
Gig workers are classified as independent contractors. As a result, they are not protected against unfair dismissal, have no right to receive the national minimum wage, and are not entitled to holiday, sick pay, or redundancy payment. The gig economy is present in several professions, and there are many important conversations to be had about it. In this article, I have chosen to focus on its prevalence in the online food delivery industry and the harm it is causing workers in this industry.
The Human Cost
Gig workers may have the flexibility to choose their working hours, but many will need to work every hour possible to make enough money to get by. Using Uber Eats as a case study, I will break down what the average "gig" is likely to pay. Six factors make up Uber Eats drivers’ rate of pay:
1) Pick-up fee
A flat rate that delivery drivers receive whenever they pick up an order from the restaurant. They can take multiple orders at once to maximise profits.
2) Drop-off fee
Also known as the delivery fee, this is the flat rate received for successfully completing a food order. This is received for each order a driver delivers, so if multiple orders are delivered in one journey, they receive multiple drop-off fees.
3) Mileage rate
This rate only applies in certain cities and doesn't take into account the route a driver takes to a drop-off point. Instead, it calculates this rate using the most mile efficient route from the restaurant to the drop-off point.
4) Minute rate
The minute rate is a pay-out based on the estimated time it would take to complete an order(s) from the first restaurant to the final drop-off. The minute rate is similar to the mileage rate as it uses an estimate rather than the actual time spent, and it is only available in certain cities.
5) Fare reduction and boost multiplier
The fare reduction is a reduction to an employee’s pay depending on the city they are delivering in and the vehicle they use to make the delivery. The boost multiplier is applied when drivers are in low supply. Uber may pay drivers more during these periods to encourage more drivers to work.
6) Tips
Customers can choose to tip their drivers. Drivers keep 100% of the tips they earn. However, they must pay taxes on their tips.
The first big problem of this pay structure is the limited availability of minute rates and mileage rates for many Uber Eats delivery drivers, which caps their earnings. Unfortunately, UK Uber Eats drivers don't receive access to a minute rate. Instead, their payment details can be found below.
(Image taken from official Uber Eats website).
The service fee is a deduction applied to the driver's earnings depending on the vehicle they drive. If a driver's earnings are under the minimum fee (before the service fee is applied), it will be topped up to this amount before the service fee is deducted. Using this model, if a driver made a delivery in London, 1 mile away from the restaurant, they would earn £4 (£1.40 + £1.50 + £1.10). If they used a car to make the delivery, 25% would be deducted, leaving them with £3 of earnings.
Gig economy pay structures are a worldwide issue however, earlier this year TikTok user Riley Eliot released a video detailing the negatives of working with Uber Eats and DoorDash. One of the most prominent factors was the reliance on tips to be able to get by.
Riley lists multiple periods of homelessness, trouble sleeping and struggling to afford food due to his low income working for Uber Eats and DoorDash. Uber Eats and DoorDash aren't the only takeaway delivery services guilty of using a gig economy structure; most mainstream takeaway services do.
How Can You Buy Ethically?
The situation that gig economy workers find themselves in is tough, and it's even tougher to know how to help as a consumer. Some people are boycotting apps and services that use a gig economy structure to put financial pressure on them to reform. You can do this by buying directly from takeaway store websites and sticking to takeaway services that employ their own delivery drivers (and pay them a fair wage!). Another option is to make sure you tip your delivery drivers to increase their wages, but this will also play into the corporation's hands by not applying pressure to reform… Lastly, you can start or support petitions for the UK government to grant these workers more rights like the right to a minimum wage and holidays. Some progress has already been made in this regard as Uber (taxi) drivers in the UK have been classed as workers rather than independent contractors, making them entitled to holiday pay, paid rest breaks and the national minimum wage. Unfortunately, Uber Eats delivery drivers are not included. Hopefully, this result will put pressure on the takeaway delivery app sector to follow in Uber (taxi's) footsteps.
Edited by Callum Sinclair (Sub-editor)
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