2007 - 2021

Across Europe, the battle between gig workers and their algorithmic masters is raging

As Deliveroo launches on the stock market in London, Ben Wray, Bella Caledonia’s European Feature Writer, examines the struggle between gig workers and digital platform employers across Europe. Wray finds that gig workers are getting organised and increasingly savvy about how to fight for their rights.

THERE was a time not so long ago when a food delivery platform like Deliveroo, which floats on the stock market for the first time today [31 March], was described as being part of the ‘sharing economy’. These companies were merely acting as ‘intermediaries’, connecting the self-employed delivery driver to the hungry consumer.

In the sharing economy, everyone was a winner – the delivery driver had total flexibility to work where he wanted and when he wanted, while the consumer could access a wider selection of take-away options and have them delivered faster and at a cheaper price. Meanwhile, independent restaurants struggling for customers would suddenly be propelled into the consumers eye by the power of the app. What’s not to like?

Outside of Silicon Valley, the ‘sharing economy’ is now only used ironically. There’s nothing about platform capitalism – a more accurate term to describe the corporations which control the digital infrastructure which we all now rely on in our daily lives – that is remotely about sharing.

Deliveroo’s IPO is further proof of this, if it were needed. The UK company is set to offer £3.90 a share, which if taken up in full will see the company valued at £7.6 billion. That will instantly make the company’s CEO, Will Shu, around half a billion richer, while Jeff Bezos’ Amazon – which has a minority stake in Deliveroo (more on that later) – will earn a tidy sum too.

Meanwhile, those who do all the actual work of food delivery for Deliveroo, the ‘riders’, are cycling all hours of the day to pay the rent and put food on the table. An investigation by Bureau Local and The Ferret last week found that one in three Deliveroo riders in Scottish cities are on average earning below the minimum wage. One in six earn less than £6.45 an hour. As for independent restaurants, Deliveroo charges up to 35 per cent commission on every take-away ordered, twice what it charges big chain restaurants, eating a big hole into already collapsing revenues in the context of the pandemic. But with few alternatives to attract customers, small restaurants are becoming dependent on Deliveroo’s app for sales.

The ‘sharing economy’ was long ago exposed as a big tech PR farce to paper over what are the raw class divisions of platform capitalism, the question is and always was: what can be done about it?

There are signs that workers are beginning to find answers. Across Europe, battles are raging between gig workers and their algorithmic masters. As part of my work co-ordinating The Gig Economy Project, I have been reporting on these struggles, interviewing gig workers and union organisers across the continent. Here’s what I’ve learned.

Deliveroo: precarious work, and a precarious business model

Deliveroo is a good case study to understand how the dynamics of the gig economy are evolving. The company launched in 2013, and has ran at a loss every year since. This is typical for platforms with a ‘growth-before-profits’ business model. What financial investors in these platforms are betting on is that by pushing prices below profitable levels in the short-term, their platform can attract a critical mass of consumers to their app and undermine market competitors. Once a monopoly position is attained – when the app becomes the app for a whole sector – the platform is no longer threatened by rivals and can raise prices, delivering big returns for its investors.

As Nick Srnicek argues in ‘Platform Capitalism’, monopolisation is a built in tendency of the platform economy – whoever dominates the digital infrastructure of a sector becomes almost unbeatable in the market.

“From a data-production perspective, activities are like lands waiting to be discovered,” Srnicek writes. “Whoever gets there first and holds them gets their resources – in this case, their data riches.”

Deliveroo is an example of what Srnicek calls a ‘lean’ type of digital platform, in that it outsources almost all of its operations except for the app itself. A ‘lean’ platform like Uber is the biggest company in the private car hire market worldwide but has no cars. AirBNB is dominant in the short-term let’s market but owns no properties.

Similarly, Deliveroo is a major takeaway delivery firm which owns no delivery vehicles. All of those expenses come out of the workers pocket, who is deemed an ‘independent contractor’ not an employee. If a Deliveroo rider gets sick? Tough, no sick pay for them (and they are not entitled to statutory sick pay either). If they crash their bike while trying to meet Deliveroo’s expectations for fast food delivery? You better hope that the NHS can fix you up pretty quick.

The only thing Deliveroo brings to the table is its app, which is the riders’ de facto boss, but unlike a human manager, the app is constantly watching: it can time to the second how long it takes to get from A to B, what route you took, and whether you stopped anywhere on the way. You don’t want to fall foul of the algorithm: you can lose out on gigs if you are too slow, if you don’t take on enough work or indeed if you break any of its policies. And once the app decides to de-activate you permanently, there’s no legal recourse since you are not an employee. You’re fired.

When the pandemic hit, Deliveroo was on the verge of going bust as the big restaurants it secured most of its business from – KFC, Wagamama, Burger King – shut their doors. The company had to beg the UK Competitions Authority (CMA) to allow a £575 million investment from Amazon – a deal which had been under investigation for over a year for possible breach of anti-monopoly laws – to go through, admitting that if CMA blocked the deal Deliveroo would cease trading. In the end, the CMA approved the deal because “it’s clear that Deliveroo would not be able to meet its financial commitments and would have to exit the market” without it. The CMA were bullied into compliance by Deliveroo and Amazon.

Armed with Amazon’s backing, Deliveroo went on a growth offensive, rapidly increasing its workforce in towns and cities across Europe. It sought to turn this into a PR win, telling the press that it had created 15,000 new jobs in the UK in the middle of a recession. But as former gig worker and IWGB union president Alex Marshall told me recently, it costs Deliveroo “absolutely nothing” to register more riders on its app, but flooding cities with riders has a huge impact on the income of each rider, as more workers are chasing the same number of gigs. Riders across Europe complain of cycling around cities for hours and failing to get more than a handful of gigs.

“But Deliveroo want to look like they are booming, especially as they approach their IPO,” Marshall explained. “So it is the perfect storm for these companies to aggressively expand.”

After being on the brink of collapse in March, by the end of 2020 the company’s revenues were £1.6 billion higher than 2019, and it began preparing to float on the stock market at double its estimated 2019 value. Shu, with no little help from Jeff Bezos, had turned Deliveroo from capitalist zero to hero, but it was done on the backs of Deliveroo riders working through a deadly pandemic, seeing their incomes plummet and getting increasingly angry about it. Deliveroo was the most protested against digital labour platform in the world between 2017 and 2020, according to the Leeds Index of Platform Labour protest. Collective logging-out of apps – the gig economy strike – have proven effective.

The company has also faced important legal defeats this year. In Bologna, a court ruled in January that its algorithm was discriminatory against workers who were off sick or on strike. Courts in Barcelona and Amsterdam in January and February respectively found that Deliveroo riders were employees not self-employed contractors.

Deliveroo is also under pressure following Uber’s defeat in the UK Supreme Court in February, which also found that Uber drivers were employees not independent contractors. Uber has conceded following the verdict that its UK drivers are workers, entitling them to some (though not all) workers’ rights, including holiday pay, a pension scheme and the minimum wage. There is little reason why Deliveroo riders should not at least have the same rights as Uber drivers, but every concession Deliveroo makes to its riders is more money it has to pay out in labour costs.

Ahead of the IPO, Shu warned potential investors that “we would be adversely affected if our rider model or approach to rider status and our operating practices were successfully challenged or if changes in law require us to reclassify our riders as employees”.

The company has set aside £112 million to fight legal battles. Deliveroo riders have been making a stink about their conditions in the run-up to the stock market listing to put pressure on the company, and it has paid off, with eight major financial investors boycotting the IPO because of concerns about workers’ rights. One investor described the issue of Deliveroo riders legal classification as a “ticking time bomb”. The bad press has cost Deliveroo money: after initially estimating a top-end value of £8.9 billion following the IPO, the company has downgraded that to £7.6 billion – a £1.3 billion drop in its estimated value in less than two weeks.

The shaky run-up to the IPO highlights the speculative nature of platforms like Deliveroo, which are basically a big bet placed by finance capital that they can steamroller all in its wake and achieve monopolisation before anyone – government regulation, court rulings, tax agencies, rival platforms – stops them. But what Shu, Bezos and their ilk did not bet on was that a movement of gig workers could pressure these institutions, and potential financial investors, into action.

European battle-lines

The battle over Deliveroo’s IPO in the UK is just one of many currently taking place in Europe. In Spain, the Spanish Government is set to introduce a ‘Riders Law’ after more than 40 court verdicts against various platforms (including, yes, Deliveroo), finding that their riders are workers who must be given employment contracts. The Riders Law will establish a legal presumption that riders are employees of platforms, and allows unions access to information about platforms’ algorithms.

While the Law has been bitterly opposed by Glovo, Spain’s leading food delivery platform, it has also been criticised by RidersXDerechos (‘Riders for Rights’) for being too timid. Originally, the law was supposed to include all workers on digital platforms, including domestic and home care platform workers, but it has been restricted only to delivery platforms under internal government and corporate lobbying pressure.

In Italy, a 24-hour national riders strike last Friday [26 March] saw riders refusing to respond to app requests in 30 cities and towns. On Monday [29 March], riders’ unions signed a collective agreement with the JustEat platform whereby all riders would be made employees, including having full trade union rights.

Meanwhile, the European Commission has started work on a Directive which will regulate platform work in all EU nation-states. The first day of the consultation on the Directive was met by a global protest of gig workers in 16 countries across three continents, demanding an end to the “unjust misclassification of gig workers as independent contractors”.

What these actions demonstrate is that an increasingly savvy movement of gig workers and union organisers realise the need to hit platform companies on multiple fronts. Platforms are heavily reliant on investment from finance capital, so pressure campaigns on financial investors – like the one that has knocked over a billion off Deliveroo’s estimated value – can be just as effective as a strike in terms of hitting platforms where it hurts. Platforms are also betting on being powerful enough to ride roughshod over labour laws, so legal victories – like the one against Uber at the UK Supreme Court – can prove hugely effective in delegitimising their power, especially when combined with industrial and media pressure.

This movement is also instinctively internationalist, as they know that the big digital platforms all operate across borders, so they must be symmetrical to their enemy. As work researcher Jamie Woodcock told me in an interview, “platform workers have this shared identity that is very international.”

“One of the things that really fascinates me is that when Deliveroo workers struck in London, there was messages of support from riders across Europe, who got in touch with each other because they felt they have the same kind of job,” Woodcock added. “That’s quite a rare thing in other types of work; security guards in London don’t automatically identify with security guards in Paris and Berlin. The Deliveroo or Glovo rider are able to build these connections much quicker.”

Towards a new phase of the gig economy?

The successes of gig workers in their battle with algorithmic capital means they are likely to force a new phase soon, where some of the more wild-west aspects of platform capitalism – still in an early stage of its development – will give way to a state-regulated relationship, where at least a semblance of workers’ rights is respected and algorithms are more closely monitored. But that new phase will bring with it new challenges for the movement, including the need to raise ambitions.

As Niels Van Doorn, principle investigator of the ‘Platform Labor’ research project, asked at a conference on the gig economy at the weekend: ‘Is our vision simply for platforms to act like other low-wage employers?’ Van Doorn also pointed out that gig workers in Europe are disproportionately migrants, who often find gig work easier to access because there is no bureaucratic application process typical of a formal job, or because they have no legal right to work in the country and are paying to use other people’s profiles to access the app. With that in mind, the vision should not be to formalise gig work in an already exploitative system, but to expand the power of all workers in the digital age

It would be a mistake to see the gig worker’s struggle as being isolated to food deliveries and taxis. Legal services, translation, software development and accountancy are all fast growing sections of the gig economy, according to the Oxford University Online Labour Index. ‘Gigification’ can either be something we individually fear or collectively tackle, because digital technology could be liberating, if the algorithms were democratically controlled. Workers and citizens as the masters of the data we produce, ensuring it works for people and planet. That should be the vision.

 

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Comments (13)

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  1. John Learmonth says:

    If the algorithims were ‘democraticaly controlled’? What do you mean by this?
    If you don’t like the ‘gig economy’ don’t use it.
    I use the co-op and save up my points for xmas and the workers in my local co-op get decent wage, pension, sick pay etc.
    Stop going online and use your local co-op!
    Choice……..its a bugger!

    1. Wul says:

      You are 23 years old. You and your pals are having a drink and wee party in your flat. You fancy hot pizza…is the local Coop going to deliver it to you?

      It’s not really a choice. The whole model of these companies is to create a monopoly. Make it so easy and so cheap to use their service that you don’t even think about an alternative.

      They “buy” a market share by operating at a loss for years, burning investors cash furiously (the investors are already filthy rich (Jeff Bezos) and gambling on getting a share of the Next-Big-Thing…who cares if they lose some money). They outsource all the risk and capital costs to desperate “self-employed” employees.

      Only by protecting workers’ rights and regulating business practices can this type of non-business be discouraged.

      1. Pub Bore says:

        The Co-op in my nearest village doesn’t do hot pizza or home deliveries, but two of the pubs and the chippie do both. They didn’t used to, but they’ve adapted their business models accordingly in response to the lockdowns. The deliveries are managed in-house (using existing serving staff), and the nominal delivery charge (it’s free if the cost of your order exceeds a minimum amount) is competitive with any urban uber-racket.

        The pubs even deliver pints!

  2. isitme? says:

    Insightful article. However, Deliveroo, Just Eat, Uber etc all only exist as there appears to be plenty of people willing to buy takeaways via such apps (obesity epidemic anyone?), who want cheap car rides and so on. I’m at a loss as to the public good of making unhealthy takeaway food easier to access nor encouraging more polluting cars on to the already congested roads. All this before we even get to the shoddy treatment of the actual gig economy workers. Perhaps the question is a larger one about what kind of society overall we wish to have in the country. Never used any of these takeaway services (on the odd occasion I want a chippy I’ll pop out on foot) nor Uber (in the unlikely event I require a taxi, I’ll call a black cab or private hire ie a licensed operator).

    1. John Learmonth says:

      Quite, people need to get off their fat lazy backsides and walk to the shops….I have for 50+ years and have no intention of changing.

      1. Well, maybe, but we’ve been shut in our homes and compelled to stay at home. It all plays into what they call Neo-Feudalism.

  3. Pub Bore says:

    You could always recompense the delivery boy or girl directly, to reflect the true cost of your takeaway.

    When I was a lad, I used to have a Saturday job, delivering messages around the village for the local shop. I was paid sweeties by the shop-owner, but almost all the customers paid me handsomely for my employment. And those who didn’t always received a little ‘extra’ in their delivery.

  4. Pub Bore says:

    “It would be a mistake to see the gig worker’s struggle as being isolated to food deliveries and taxis. Legal services, translation, software development and accountancy are all fast growing sections of the gig economy…”

    And don’t forget that vast and growing army of sole-trading joiners, plumbers, electricians, etc. who grub and compete for our gigs.

  5. SleepingDog says:

    So why are algorithms not used to evaluate managerial performance and cost/benefit to the company? Oh yeah, SkyNet. Not the courier service. I suppose the humans are fighting back with GroundNet, according to this article. But anyway, if the algorithm is only measuring profit maximisation, perhaps some CEOs are safe.

    1. Pub Bore says:

      As it should be. Profit maximisation is the efficient measure against which managerial performance is evaluated in the private sector. Companies exist to maximise the profit they generate for their owners. That’s just the way it works. Why would such companies want algorithms that measured anything else?

      The trick would be to find some way of shifting the full cost of its operations onto the company itself, so that these are reflected in its profitability. At present, much of the social and environmental cost of private enterprise activities are met by the state through its welfare and infrastructure projects. This subsidisation of private enterprise should stop, and it could be stopped by recovering the full social and environmental cost of those enterprises through taxation. This would factor in those costs to the measurement of a company’s profitability and thus to the evaluation of its managerial performance.

      Mind you, the downside is that ending those subsidies would most likely make our companies uncompetitive in the global marketplace, which would be a bit of a b*gg*r for those who depend on them for employment.

      1. SleepingDog says:

        @Pub Bore, clearly Amazon investors would disagree, since the company took years to make profits and ploughed most of revenues back into expansion. Some corporate management would seem to prefer others to look at share price (which they can manipulate); some investors may be more keen on dividends (whether the company is viable or not). Different stakeholders in companies often want different things, including divisions amongst its employees.

        Focusing simply on profit maximisation, however calculated, is hardly convincing in this era of data analysis, and seems as dunderheaded as those football pundits who keep claiming (for whatever reason) that only the three points matter, and not apparently inconsequential things like performance. Yet the sports performance industry has risen (presumably like the gambling industry) on the back of analysing mass, multi-stranded data. Given fine margins, luck, cheating, variability of opponents and conditions, differential availability of resources and so on, it would seem naive to judge a football manager on mere results alone.

        Plus, you seem blissfully aware that British companies that are already uncompetitive in the global marketplace nevertheless make do by nefarious means such as bribery and corruption and industrial espionage, supported by the British government and secret services. Indeed, in The State of Secrecy: Spies and the Media in Britain, Richard Norton-Taylor notes that the secret services’ now-legislated ‘Economic well-being’ role “gives green light to industrial and commercial espionage as well as fraud” (p164).

        1. Pub Bore says:

          Indeed, Amazon spent years investing its profits in developing its operation in order to maximise the same. But its owners are reaping the rewards of such investment now.

          Money always tends to go where the return on it is likely to be greatest. Even I tend to shop where I can get more for my pound.

  6. Jonathan says:

    Insightful, asa self employed driver for a takeaway business, there is a major fight going on between Uber Eats and Just Eat, each slashing their delivery fees to customers in the hope of achieving a knockout blow to rivals.

    It’s squeezing a local business that provides equivalent services to the larger corporate beasts at much lower commission.

    The deregulated UK Labour market has been used at least since the days of Snatcher to drive up corporate profits at low risk whilst workers take all the risks and costs of the business.

    It’s unlikely Starmer and his new True Blue Labour Party would ever rock the boat or legislate to protect workers and the Exchequer from being made to pick up the tab twice for clever bankers and tech entrepreneurs from making a killing.

    I am going to join UNITE and encourage my colleagues to do the same and get organised…

    Capitalism never changes so we should rise up and protect our rights and dignity.

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