AIMS Accountants for Business
AIMS Accountants for Business
The COVID pandemic has changed the way that we speak about working. It has also normalised some of the ways of working that were previously marginal: remote working and hybrid working. These ways of working have been forced upon businesses since 2019 and they rely on technology to be successful. Another massive change, partly due to COVID, and similarly reliant on technology, was the necessity for businesses that delivered to home-bound consumers. Businesses like Deliveroo and Just Eat, who operate in the gig-economy, saw huge increases in demand because people couldn’t go out to restaurants. This necessitated the growth of the gig economy that had been expanding for a while before COVID.
This article will define the gig-economy and look at the recent court cases of Uber and Bolt to analyse this new way of working and what it means for workers.
In the gig-economy, businesses hire freelancers, independent contractors or temporary workers instead of full-time staff members. Examples of businesses who operate inside the gig-economy include Deliveroo and Bolt. Other examples are freelance graphic designers who take on multiple projects from different businesses simultaneously. If you’re a Deliveroo driver, for example, you work the hours that you want and only get paid for making successful deliveries. You are not employed by Deliveroo so you don’t get health benefits, pension autoenrollment or any other benefits that full time employment affords you. You don’t get holiday or sick pay and you are technically self-employed.
However, there are some benefits to a gig economy. For people who have access to technology, goods and services ordered from companies who hire gig workers are usually much cheaper than those bought from businesses operating in the traditional economy. Think about the first Uber that you ever took and how that compared in price to a traditional taxi fare when making the same journey. The gig-economy gives people the opportunity to work where they want and for multiple different businesses too, which can enhance their overall skill set. More and more people are demanding the opportunity to work remotely or from home and this gig economy allows for this.
Do these benefits outweigh the poorer rates of pay? Workers in the gig economy are often faceless to the organisation and have no way of progressing their careers. This is particularly true of the tens of thousands of drivers from companies like Deliveroo, Just Eat and Bolt. The gig economy can also disrupt your work-life balance. A regimented working routine is great for sleep and for keeping on top of things in your personal life. If you’re involved in a gig economy, you may have to accept jobs whenever they come up, which can disrupt a positive work life balance.
Pros and cons aside, since 2016 businesses in the gig-economy have been subjected to public criticism and government intervention. In the case of Uber BV and Others v Aslam and Others, which began in 2016, the UK Supreme Court ruled in 2021 that Uber drivers were workers, not self-employed contractors. This entitled Uber drivers to a range of employment benefits and made clear that Uber workers were ‘working’ from the moment that they opened the app, to the moment that they closed it. Previously, as gig workers, they’d only be paid for the actual driving and completion of journeys. Uber drivers were quickly awarded holiday pay and a guaranteed minimum wage.
More recently, in June 2022, the trade union GMB has vowed to launch legal action against Bolt regarding the status of its workers. A Bolt spokesperson responded to calls for a minimum wage by saying:
“We regularly engage with drivers across the UK who say they like our existing model because it gives them the opportunity to earn more.”
This was all after a Bolt driver was banned from the app for 10 years for not accepting enough rides. The point of working for Bolt or other gig jobs, is that you are in full control of how often you work. You don’t enter into a contract of employment where a minimum number of hours are specified. The Bolt driver said in an interview with Personnel Today, that:
“The one right they claim to give us is the right to choose how we work and when I exercised that right, I was punished and dismissed by Bolt.”
Bolt aren’t exactly hiding their commercial rationale for maintaining this business model when this happens. When Uber lost the court cases, we did see an increase in price which may lead to consumers using other companies so it looks like Bolt are worried about the same thing.
You can’t have your cake and eat it too.
If Bolt want to operate in the gig economy, then they should allow their workers complete flexibility to work when they want and accept whichever rides they choose. If they want to set a minimum number of hours worked, then they must also pay people a minimum wage.
It is true that individuals make their own decisions when choosing to become gig workers. There are a range of reasons including familial obligations and flexibility. However, when companies like Uber and Bolt grow as quickly as they do and employ hundreds of thousands of people, it is important that they allow for workers to earn at the very least, a minimum wage.
At AIMS, we believe that when you are asking an accountant to give up a full-time job to become self-employed, you must be honest with them about the business opportunities that exist and their earnings potential. If, for example, opportunities are scarce, people deserve to know before they make a decision to work with you. As long as you are honest about this, people can make an informed decision about becoming self-employed and you haven’t misled them, whatever happens. We also believe that it is important to help your self-employed workers get new business. This is why we conduct centralised marketing campaigns such as Google Ads and telesales to help our accountants grow their businesses.
To learn more about becoming an AIMS Accountant, please click here!