FT journalist Sarah O'Conner wrote a piece called 'Farewell to the servant economy' this week which spread around social media like wildfire. The article takes up many of the themes we have been talking about in this newsletter recently: that the food delivery and ridehail platforms which have emerged over the past decade have been built on cheap money in an era of rock-bottom interest rates, which has allowed these firms to subsidise the costs of delivery and driving in a 'growth-before-profits' strategy.
Now, as interest rates rise and inflation eats into consumer spending, these platforms are fishes out of water. Investors are suddenly not throwing cash at them anymore, and thus they have to try to stand on their own two feet, but to do so means raising prices just as consumers are also tightening their belts. The result is not pretty: O'Conner's article provides a handy graph (see above) of just how far the stock value of four major gig companies have fallen.
"It remains to be seen how many of these companies will survive the next few years and in what form," O'Conner writes.
Also this week, the Eurozone loomed on the verge of another crisis that could match that of a decade ago, or potentially be even worse. The European Central Bank (ECB) had to call an emergency meeting to try to clear up the mess of its own announcement that interest rate rises and QT (Quantitative Tightening, the opposite of Quantitative Easing) is in the post. Even just the suggestion to financial markets that all that cheap and free (in the case of QE) money could be over sent bond markets into a panic. If the ECB sticks to its guns and follows the US Federal Reserve in raising rates, expect the noose around the neck of Just Eat, Delivery Hero and the other big European gig platforms to tighten.
All of this is a world away from the everyday realities of being a gig worker, but it already has had a massive effect on-the-ground. It's impossible to know how many workers have been fired because the vast majority of them were never formally employed (and thus are simply deactivated from the app, or are still on the app but can't get enough gigs to make it worthwhile) or they were hired via sub-contractors, in which case a company like Just Eat does not have to tell the world that it has let go of thousands of workers, because they were never officially their workers. Only at grocery delivery platforms like Gorillas, Getir and Zapp have they had to officially lay off their workers, and thus report it to the media. It's likely that the lay-offs are similar across the industry at this point, but no one can say for sure.
It's impossible to even imagine that in the car industry, or in the public sector, potentially tens of thousands of workers could be made unemployed and no one would know. If there were job losses of that scale in those sectors, Ministers would be holding emergency meetings with those responsible. But in the gig economy, the platforms simply was their hands of those that do the work which has made their business function: no leaving notice, no compensation, nothing. That should be reason enough to demand workers' rights in the platform economy.
Ben Wray, Gig Economy Project co-ordinator
Gig Economy news round-up
- E-FOOD RIDERS STRIKE IN GREECE AND PREPARE TO ESCALATE: 400 E-Food riders in Athens, Greece stopped work for four hours on Friday [17 June] and announced that there would be a further day of industrial action the following Friday, but next time it would be a "full strike". The 'Union of E-Food's workers' have four demands: that workers on 4-hour contracts can choose the schedule they prefer, that the company must re-start hiring workers on permanent contracts and not freelancers, that workers on 4-hour contracts must have the right to switch to full-time contracts, and that the company must compensate petrol expenses based on the actual kilometres driven. One of the striking workers, Luca Pezzolo, said management had rejected the demands after the initial strike but "like always, we want victory and nothing less". Last year E-Food riders won a huge victory after the company, which is owned by the German multi-national Delivery Hero, sought to terminate all of the workers fixed-term contracts and employ them on a self-employed basis. Thousands of riders took action in a two-day strike while a boycott of the company went viral on social media. Not only did the resistance halt the company's move, the workers also won permanent contracts for the first time. Read more here.
- SACKED SPANISH GORILLAS WORKERS DEMAND FIRM PAYS FOR "DAMAGE CAUSED": Gorillas riders and pickers in Spain are organising in a union after being told that all 300 of them are being fired. Gorillas announced at the end of May that they were pulling out of Spain, Italy, Belgium and Denmark, as well as sacking 300 staff at the company's headquarters in Berlin. The Spanish Gorillas workers only had the collective dismissal confirmed on 15 June, and workers are now organising to ensure that "the damage that the company has done by coming to speculate in this way, grow irresponsibly and pay for that damage," one worker told 'El Salto', speak anonymously. He added that they want a "dignified compensation" because many workers moved out of town or left other jobs to join Gorillas. Therefore, they are not willing to accept the minimum compensation for a collective dismissal, which is 20 days pay per year worked. Gorillas had opened up 11 warehouses in Madrid, six in Barcelona, three in Valencia and one in Alicante. Read more here.
- TRADE UNION LEADERS WRITE TO FRENCH MINISTER OF LABOUR DEMANDING STRONG EU PLATFORM WORK DIRECTIVE: An open letter to the French Minister of Labour, Olivier Dussopt, from six trade union leaders has demanded that the EU Platform Work Directive does not include a third category between employed and self-employed. The open letter came on the eve of the first official meeting of the EU Council, which is made up of the EU heads' of member-states, about the draft platform work directive on Thursday [16 June]. France is currently the chair of the EU Council. The letter, who's signatories included the European Trade Union Confederation's Confederal Secretary Ludovic Voet and Ben Ali Brahim, the General Secretary of the INV union which represents Uber drivers in France, states that "the reference in the recitals of the directive to the voluntary decision to pay for "social protection, accident insurance or other forms of insurance, training measures or similar advantages for self-employed persons active on this platform (…) should not be considered as a decisive element indicating the existence of a working relationship" is very dangerous and allows the creation of a third category of workers, which the directive itself opposes." The second-stage of the consultation on the Directive was opened on 15 June. Read the open letter in full here (in French).
- TEMPORARY BAN ON UBER IN GENEVA LIFTED: Uber cars are back on the road in the Swiss city of Geneva after a temporary ban, which followed a court ruling that Uber drivers must be employed in the city, was lifted. Uber and local officials came to an agreement after the US ridehail giant said it would now employ its drivers via "Swiss partner companies". The company had appealed the decision of the Geneva court in 2019, but the original decision was upheld by the Federal Court last week. The company said its drivers in the rest of Switzerland will continue to operate on an independent contractor basis, claiming the "vast majority" want this. Under the new status, the Geneva drivers will get the minimum wage of 23.55 Swiss Francs (€23.14), one of the highest minimum wage's in the world. Read more here.
- JUST EAT CO-FOUNDER MADE UK "COST OF LIVING BUSINESS TSAR": David Buttress, the former CEO and co-founder of Just Eat, Europe's largest food delivery platform, has been announced as the UK Government's new "cost of living business tsar". The unpaid role will see Buttress assist companies in schemes to help people struggling with surging prices of basic goods like food and energy. Buttress left Just Eat in 2017 and is a partner at venture capital firm 83North, which invests in food delivery company Hungry Panda. Steve Barclay MP, Boris Johnson's chief of staff, said that Buttress would bring his "wealth of experience" to the role, but the move was condemned by IWGB union President Alex Marshall, describing Buttress as a "pioneer of hyper exploitative business that pays poverty wages & deprived thousands of workers basic rights". Marshall, who previously worked as a delivery courier, added: "Its quite simple: raise pay & stop denying workers their legal rights. No need to crown me a tsar!" Read more here.
Have we missed important news on the gig economy in Europe this week? E-mail Ben at [email protected] to help us improve our news round-up.