24/11/2017
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Home » Legal & Financial » The Freelance revolution
The Freelance revolution

The Freelance revolution

Phill McCoffers – Islander January 2017

 

In the melee of the Trump victory and ongoing Brexit shambles you may have missed an apparently small story that slipped under the radar in October that has greater potential ramifications for the way the 21st century does business than its meagre column inches may have suggested.

In London, a tribunal of three judges ruled in favour of two drivers working for taxi hailing app Uber, that the law now views them as employees of the firm, rather than as freelance drivers. Specifically, that they should receive the UK minimum wage, tea breaks, sick pay and holiday pay, for its part Uber will be obliged to pay the requisite amounts of national insurance and pension contributions for it’s new ‘employees’. On the face of this, it all seems very reasonable, but it tears up not only Uber’s business model, but potentially delivers a death blow to a method for freelance working that looks set to revolutionise the way many of us work, and live in the 21st century.

If you haven’t used it, Uber is an app on your smartphone that lets you hail a cab with the push of a button. A driver logged onto the system will accept the job and come and take you home. The app itself handles the financial side of the deal with a credit card, or Paypal details stored against your account. Uber argues that rather than employing drivers, it merely puts drivers and passengers in contact with each other and charges a commission for its efforts. To say that it has revolutionised its industry is an understatement. Launched in San Francisco in 2011 it now operates in 400 cities in 70 countries worldwide, and has 160,000 registered drivers who rack up 1 million rides every day. Uber has big plans to expand into drones, helicopters and driverless cars. It has become the poster child, even the byword for what has become known as the ‘Gig’ economy.

These days everyone is at it. With an app, you can rent out your flat with Airbnb, have a freelancer deliver your chow mein with Deliveroo, you can send parcels, make jewellery, and many more. With People per Hour, and E-Lancer you can sell your services, online on a job by job basis as a graphic designer, programmer, personal assistant, writer etc. Up the upside it allows freelancers to choose the hours they work, and how hard, and in many cases allows users to decide where they work and live and frees them from the 9-5 office based existence. The downside is that this lacks the security of traditional employment with holiday and sick pay, pensions and all the other benefits that have been hard won by trades unions over a hundred or more years.

Cities like Palma de Mallorca are increasingly becoming the home of choice for those who have realised that the Gig economy no longer compels them to live near their work, they can work for clients anywhere on Earth from a cafe in the old town, it also allows larger urban salaries to be spent in traditionally lower income places, distributing wealth over a wider area. Potentially this new way of working remotely could begin to ease the congestion, and spiralling housing costs of huge urban centres like London and New York that are beginning to be choked by their own success. Why keep loyal to a system that needs to house, and transport millions upon millions to work in expensive cities, when you could send them to work at home, or to Palma, or a beach in Thailand to work on their phones, tablets and laptops?

When the industrial revolution kicked off in the UK, the very next thing that happened was that people tried to stop it, fearful of an uncertain future and the loss of a life they understood. Industrialisation won the day, and I think few of us would regret that, but along the way many workers were exploited and abused by uncaring management with both eyes on the bottom line. The rights that employees enjoy today were hard won over many generations and should not be swept away without a fight.

Whether to view the rise of the Gig economy as a liberating step forward, or a regressive step backwards in terms of employment rights is a tough call, and in reality it is probably a bit of both, but genies don’t willingly go back into bottles, so it is vital that society manages the transition into the new way of working with all of its benefits while retaining the right to a decent standard of life for all. That shouldn’t be too hard should it?