Why the gig economy must be regulated

In the first of this three-part series on workers in the e-hailing industry, we look at the exploitation Uber Eats food couriers in South Africa face, without their basic labour rights.

The exploitation of workers by tech giants is another pandemic while the world is battling Covid-19. Labour experts have called for the regulation of the gig economy, where loopholes see workers carrying all the risk with no benefits. 

As the world moves towards digitisation, or what is termed the fourth industrial revolution, new forms of unregulated and precarious work have emerged. This space is dominated by tech giants such as Amazon, Uber, Facebook and Apple. Amazon made obscene profits in the midst of Covid-19. It was reported late last year that the tech giant made $96.1 billion (about R1.4 trillion) in revenue.   

Despite this profit boom in the digital economy, workers in warehouses and the transport chain have been on the receiving end of exploitation and abuse from tech companies. For years, Amazon workers have raised the issue of poor working conditions and recently with Covid-19, job insecurity and the lack of protective gear and paid leave. 

Some of these issues came into sharp focus when a top engineer and vice-president at Amazon, Tim Bray, resigned in solidarity with workers who protested and challenged the working conditions in warehouses across the globe.  

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In South Africa, Uber Eats drivers staged a two-day protest in December and in January, against the food tech company. Drivers claimed in their list of demands that their fees had been radically reduced and this adversely affected their earnings. Delivery fees were lowered “from 30% per delivery (plus 5% to the driver) to a capped fee of around R9 per meal.” 

“Sometimes you get R13 to R14 a trip … We do not know how they calculate our fee. Because if you can take an order from here, Johannesburg [Braamfontein], to Rosebank, you will end up getting R22 to R23, that’s like 5km, it does not make sense,” says Zebron Nkosi* who has been an Uber Eats driver for almost four years. 

“Before we make changes to our business model, or offer solutions to couriers, we actively engage with couriers through consistent focus groups, roundtables, virtual support and surveys,” says an Uber spokesperson. 

Nkosi adds that the cost of operating a digital food business for a driver is extremely high. He spends R70 on fuel and R20 on airtime in a day, and almost R200 on data a week. After he has paid his expenses, he is left with little to take care of himself and his family.

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Labour expert and sociologist at the Southern Centre for Inequality Studies Edward Webster says that some Uber Eats drivers not owning the scooters or motorbikes they use makes things more difficult, because they have to pay huge rentals or loan fees.  

“The conditions were okay at first,” says Jeffery Smith*, who has been an Uber Eats driver for three years. “But now they declined everything. For example, the delivery charges, they were reduced completely. You deliver two orders and they pay you for one.”

Uber says the wellbeing of delivery drivers is their number one priority. Because of market challenges and the imperative of their business being “sustainable” they had to “implement sustainable changes to our fee structure as fewer orders from customers means less earning opportunities for all,” says an Uber spokesperson. 

No lockdown benefits

The first few weeks of the initial Covid-19 lockdown in March last year were the most difficult for people without an income and those who are self-employed. 

“For many working in the digital economy, the five-week lockdown was a period of unprecedented insecurity and hunger, without work, income or benefits,” writes Webster in a report titled The Uberisation of Work.

The devastation was worse for Uber Eats drivers who could not access any kind of financial relief because they are migrants, says Webster. Nkosi, who is originally from Uganda, confirmed that they did not get any compensation or relief from Uber or the government during this period, despite not being able to work because many restaurants were closed. 

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When the government relaxed its lockdown restrictions, there was high demand for the food delivery service as people were cautious about going to malls and restaurants. But that didn’t translate into drivers earning more as the fees were cut. 

Uber Eats justified the cuts as a strategy to get more business for drivers. “As a result, delivery partners will spend more time making deliveries and less time sitting idly waiting for orders.” While this might have benefitted customers and restaurants, who paid less, drivers have had to bear the brunt. 

This has meant drivers work extremely long hours to reach a day’s target. Nkosi says he works “13 to 14 [hours] a day, because you may start at 8am and you end up closing at 10pm or 9pm”. 

The long hours lead to fatigue, which is dangerous for drivers who are constantly on the road. Smith was involved in an accident while working in 2019. “I was from McDonalds crossing to Campus Square [in Auckland Park, Johannesburg, on a scooter]. A speeding car jumped the robot and the guy hit me … Police didn’t open a case for me. So, when I tried to contact Uber, they asked for a police case number and we had not opened up a case. Because I was broken, I did not get time to go to the police. I spent three months in the hospital,” says Smith.

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He adds that when he reported the accident to the tech company, he was removed from the app. “So, when people see that, they say, ‘If I report to Uber, they will just deactivate my app and I will get nothing.’ So, when you get an accident, you just know I am on my own, you don’t even report.”

However, Uber says “safety of delivery-partners is a top priority and we take any incident reported to Uber seriously.”

They further claim, according to an Uber spokesperson, that “Uber Eats delivery-partners are covered by Injury Protection, from Chubb Insurance South Africa Limited – this is from the moment they accept a delivery request, right through to when the delivery is completed … When a courier uses the in-app emergency button to call emergency services, the vehicle’s make and model, license plate, and GPS location are made available to these private emergency services and security responders. This information is also shared with Uber’s Incident Response Team, who is trained in incident response and can review this information and investigate any issues. In addition, when Police are involved, Uber’s Law Enforcement Relations Team will cooperate with their investigation in accordance with our Law Enforcement Guidelines.” 

Long wait for help

Nkosi echoes Smith, saying that the process of getting help from Uber is long. “Many people have died in accidents, many people are broken, there is nothing. Uber Eats doesn’t help them … Many people are dead. RAF [the Road Accident Fund] takes long and you have to find lawyers by yourself and this could take four to five years,” says Nkosi. 

He adds that the drivers are not compensated for their injuries because Uber does not consider them as employees, but partners or independent contractors. Even in cases where the drivers are victims of crime, which is prevalent in their line of work, with phones and bikes being stolen, they are not compensated by the tech company, says Nkosi.

Webster describes this work relationship between Uber and drivers as an “anomaly. You could describe this as workers without employers”. There has to be regulation of the gig economy, he says, for drivers to gain access to financial compensation through the Compensation for Occupational Injuries and Diseases Act if they are injured while working. 

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Uber confirmed to New Frame that “delivery-partners who use the Uber Eats app are independent operators, who choose when and where they work. They may even use another delivery app.”

Uber Eats drivers “are not partners, they are closer to employees than an independent contractor. It’s the company that decides the fees they charge, it’s the company that allocated the work, it’s the company that can disconnect, if you like, dismiss,” says Webster.

This nature of work pioneered by tech companies has reversed important gains made by workers, he adds. “If you look at the history of labour, the idea of workers having a permanent job, what the International Labour Organization calls decent work, with benefits, with a voice, a union, is something that was won through struggle over a number of decades. What we are seeing here with the gig economy is really a going back to a despotic form of labour relations.”

Winds of change

The exploitation of workers in the digital economy could change soon. The Supreme Court in the United Kingdom recently declared that Uber drivers were not independent contractors but workers entitled to paid leave and the national minimum wage. This judgment will certainly have a huge impact on workers in the gig economy across the globe.

“The UK judgment is very important, a common sense one. In terms of our law, an employee is someone who is subject to the directions of another,” says Webster.

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As things stand, drivers for Uber Eats and Uber in South Africa are independent contractors without basic labour rights. This despite the nature of their work being that of an employee and not an independent contractor.

“This is the problem. If you are a partner, you have to work hard. It’s not like you will get a wage, but if we are employed we will get each and everything [benefits]. The next step is to ask Uber to consider us as employees not partners,” says Nkosi as he prepares to pick up a fast-food order in Braamfontein. 

*Not their real names 

In part two, we look at the working conditions of Uber drivers and the impact of the UK judgment on them.

Part two:

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