The great gig economy debate: employee or contractor?

If the future of work is the gig economy, what does the future hold for gig workers?

Today's expression: Middle ground
Explore more: Lesson #377
July 1, 2021:

The gig economy – the future of work – is here, and consumers love it. We can get a ride, order food, or even have our dogs walked with the tap of an app. But the gig economy relies on its workers to be independent contractors, and some recent court cases are challenging that model. Should Uber drivers be employees or contractors? Plus, learn what the “middle ground” is.

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Is your Uber driver an employee? Should he be?

Lesson summary

Hi everyone, I’m Jeff and this is Plain English lesson 377 on Thursday, July 1, 2021. JR is the producer and he’s uploaded the full lesson to PlainEnglish.com/377.

Coming up today, the gig economy has been good to consumers. We can get a ride, clean our homes, order food, and walk our dogs all with the tap of an app. But the people behind these services are called “gig workers,” and they’re almost all independent contractors. Many of these workers enjoy the flexibility contract jobs offer, but some think they should be classified as company employees. We’ll talk about why that’s important in today’s lesson.

We have an English expression, as always, in the second half of the lesson. Today’s expression is “middle ground.” And JR has a song of the week. So, let’s get going!

Fight to re-classify gig workers

Should Uber drivers be considered company employees? The answer to that question could affect the way we catch our rides, order food delivery, have our homes cleaned, fix our leaky pipes, and walk our dogs. Some major court cases, laws, and regulations could change the business model underpinning what is commonly referred to as the “gig economy.”

To understand the issue better, consider that most developed countries classify workers as either independent contractors or employees. Contractors own their own businesses, and they get paid a fee for providing a service. The benefit of being a contractor is that contractors have much more flexibility to do their work. They often meet guidelines set by bigger companies paying their contracts, but they ultimately have the freedom to choose the work they accept, set their own rates, and, often, determine their own working style. The contract can be for a couple of hours or a couple of years.

An employee, however, has an ongoing, regular arrangement with just one company. An employee has a set of expectations, reports to a workplace, follows a specific set of rules, has regular hours, and an ongoing relationship; there is no planned “end date” for an employee.

There are several reasons why this distinction is important. Most countries offer some special protections for employees. For example, depending on the country, employees can be entitled to benefits like a minimum hourly wage, pension contributions, paid vacation, parental leave, health insurance, severance, or other benefits. Employees are also entitled to certain legal protections. For example, in many countries, if an employee is laid off the employee is eligible for unemployment payments while they look for a new job.

On the flip side, contractors get no such benefits. The contract specifies the expected work and expected pay; there’s no minimum wage. Also, a company can choose not to renew a contract, and in that case, the contractor has no rights to unemployment payments. Plus, you can forget about benefits like health insurance and pension contributions. Contractors, though, have the freedom to follow their interests and make the most of their talents. They’re not restricted in who they work for; if they don’t like a manager, they just find a new contract and move on.

Large companies meet their needs with a combination of employees and contractors. They use employees for essential work that needs to be done regularly, while they use contractors for temporary work or projects that require specialized skills. Individuals gravitate to the style of work they like best. If you prize the security of a full-time job, you should be an employee, but if you like flexibility and want the freedom to always do something new, then you should be a contractor.

Enter the “gig economy.” The gig economy is shorthand for the work new technology platforms allow individuals to do in the way of small jobs for other people. “Gig” is English slang for a single, informal job. Uber is the biggest gig-economy example, but there are many others. Delivery, handyman services, house cleaning, dog walking, and other task-oriented services are manned by independent contractors. Large platforms like Upwork offer graphic design, writing, computer programming, consulting, administrative assistance, bookkeeping, and plenty of other services to these contract workers. Translation services use gig workers. If you’ve ever taken an English class on italki or Preply, then your teacher was a gig-economy worker.

Labor activists around the world, however, are saying that platforms like Uber are controlling their workers like employees, but only paying them like contractors. The workers, in other words, get the worst of both worlds. Uber, unsurprisingly, insists its drivers are contractors because contractors cost so much less.

Both sides have a point. The labor activists focus on the control Uber exerts over its drivers. Uber drivers don’t have the freedom to set their own rates; they have to accept whatever payment Uber offers for a ride. Also, the drivers don’t get to choose what customers to serve nor do they usually have the freedom to choose their own route. Uber also exerts a lot of control over driver quality and can suspend drivers for getting low ratings from riders. Likewise, riders don’t get to select from a menu of potential drivers; they, too, have to accept the match Uber makes on their behalf . In all these respects, drivers are like employees, according to labor activists, and should be classified as such.

Uber counters with some good points of its own. For example, nobody tells the drivers when to work; drivers can work as much or as little as they want and at whatever time of day they want, in whatever city or town they want (as long as Uber is offered there). Also, rideshare drivers often flip back and forth between platforms, meaning that if there aren’t many Uber riders, they switch to Lyft and vice versa. If they can make more doing a traditional delivery job, they turn off their rideshare services altogether. Try doing that as an employee!

The battle between rideshare platforms and labor activists is playing out in courtrooms around the world. Uber recently lost two important court cases. A court in California ruled that Uber drivers were employees and ordered the company to convert all drivers to full employee status, with all the relevant employee protections, including minimum wage and overtime. In response, the company threatened to shut down its service in the entire state. Uber maintains that the company could never offer prices at an affordable rate if they had to classify all its drivers as employees. The case is currently being appealed.

That’s not all. In a landmark decision, the UK Supreme Court ruled that Uber was denying its drivers legal protections. In light of this decision, Uber reversed course and agreed to reclassify its 70,000 drivers in the UK. The UK, though, is unique because it has a middle ground between independent contractors and employees. That middle ground is called “workers.” They are entitled to some legal protections such as minimum wage while they’re driving, but not all the same protections as employees.

An analysis by The Guardian newspaper found that about 40 court cases concerning gig worker protections are pending around the world and in 20 countries including Australia, Chile, Brazil, South Korea, Canada, and Europe.

The real problem is that labor laws in many places were written for a different age. When these laws were passed, the difference between a contractor and an employee was clear and contractors were a small minority of workers. Today, tens of millions of people in the U.S. alone make either their primary income or a secondary income from participating in gig economy work.

Hard to choose sides

This is a tough issue. If I had to choose sides, I think I would side with the platform because I view the workers are contractors. But, at the same time , it’s hard to make a living as an Uber driver. I think that I’d feel better using apps like Uber if I knew that the workers had a little bit of the safety net that I take for granted at my job. It’s a hard issue.

I will say that Plain English could not exist in its current form without gig workers. We have a whole team of translators and editors and helpers from gig-economy sites like Upwork helping us out—it has been extremely valuable for us because we need the specialized skills and the flexibility of contract work.

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Expression: Middle ground