Pandemic Shows Leaders That Uber Model Is Not As Attractive As It Was, warns Forbes

From Forbes:

Just as happened in past wars, certain aspects of life continue in a way something like normal in a pandemic. And so it was that last week the ride-hailing app Uber lost the case in the U.K.’s Supreme Court in which it had argued that its drivers were self-employed rather than workers. The case, which comes after similar battles in California, France, Spain and the Netherlands, was keenly watched because much of the “gig economy” — which largely involves new technology-based companies using online platforms to connect with customers — is based on undercutting incumbents by using labour that is temporary, freelance or flexible. Since many of these businesses are at best barely profitable as a result of their strategy of going hell-bent for the scale that will enable them to dominate their markets, any requirement that they pay those doing the work properly and regularly, let alone meet health insurance costs or provide sick or holiday pay, will significantly mess with their business models. No wonder that, as the Financial Timesreports, they are fighting to change the law.

They have succeeded in California, where voters were persuaded to back a proposition allowing gig companies to continue to treat workers as self-employed as long as they enjoy certain extra benefits. But that might be regarded as a special case because the state — although liberal in social attitudes — is understandably inclined to support the businesses in Silicon Valley and beyond that support so much of its economy. Uber and its allies might find their arguments rather more underwhelming in other parts of the world, especially those where the travails of traditional industry have hollowed out a whole generation of skilled workers and the communities that relied upon them.

It is early days yet, of course, but when the reckoning on the coronavirus pandemic is done it would not be surprising if it were discovered that one of the reasons the virus spread so rapidly in the U.K. and the U.S. — two rich countries noted for their flexible labor markets — is that many people’s lives were so precarious that they literally could not afford to take a day off if they felt sick or if somebody close to them was ill. Just as the outbreak revealed the lack of resilience in the supply chains for such things as medical equipment and, for a while, groceries, so it has also shown that some of our apparently most successful and vibrant economies are plagued by inequalities that could undermine them. Many officer workers — at least financially — have been relatively unscathed by the pandemic, with many better off as a result of not having to travel to work and not being able to take vacations. On the other hand, many others — working in shops and factories, driving buses and picking up refuse, for example — have not enjoyed the option of working from home and as a result have not only risked becoming sick themselves but also infecting their families and communities.

If they really are going to “build back better” political leaders like President Biden and Prime Minister Johnson are going to have to address these issues and in so doing resist any attempt to go down the routes favoured by the gig companies. Not so long ago a business plan that centered on paying the people it relied upon to deliver the product or service as little and as irregularly as possible would have been regarded as no business plan at all. There is no reason why it should be any different now.

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