Regulating the gig economy

Thu 12 Oct 2017

Within a day of Transport for London’s extraordinary and unexpected decision in September to not renew the licence of taxi app titan Uber, hundreds of thousands had signed a petition launched by Uber, which argued that banning the app would “put more than 40,000 licensed drivers out of work and deprive millions of Londoners of a convenient and affordable form of transport.” The petition also sought to play on the fears around Brexit and London’s future, suggesting the move by TfL — and backed by the city’s Mayor Sadiq Khan to whom TfL is accountable — showed the city was “closed to innovative companies.”

Protection of status quo?

While London was far from the first city to crack down on Uber — the app cannot operate in Spain, and it has pulled out of Hungary due to legislation introduced last year — the narrative that Uber had put out suggested a number of things: that this was a matter of lobbying by London’s influential black cab sector, which has long protested the entry of the taxi-app into the city.

With fares particularly for long distance, cross city trips considerably lower, and with a far lower bar for entry compared to the black cabs (whose arduous journey to pass The Knowledge, which every black cabbie must go through has even been documented in a 1979 film), Uber appeared to pose an existential threat to Britain’s famous black cab industry. The narrative also sought to spin the move as one against multicultural London. Figures published by TfL earlier this year reveals that while 67.6% of taxi drivers identified as white British in London and the surrounding suburban regions, just 6% of drivers of private hire vehicles (into which category Uber falls) identified as such, with 3,280 (out of over 117,000) identifying as of Indian origin. Was the move by TfL a rebuff to multicultural London and a protection of the status quo, the frozen in time black cab lobby? Some even argued the ban was a blow for immigrant passengers, suggesting that many, including women with headscarves, had a far higher chance of hailing an Uber than they did a black cab.

There can be little doubt that race and Britishness is implicit in some of the criticism of Uber, including from parts of the black cab lobby: while direct reference to the background of the drivers themselves is rarely made, much of the campaigning has been around the angle of safety, playing on unspoken prejudices. In other cases, the “Britishness” of the black cab as an institution has been emphasised by some critics. Tommy Robinson, a former leader of the far right English Defence League, was among those to take to Twitter in the wake of the ban to link Uber to immigration. “Would London be trying to ban Uber if its drivers were white and English?” asked Human Rights Watch’s Executive Director on Twitter, linking to a New York Times article that focussed on the immigrant angle of the row.

Tense relations

However, to suggest this were the case is to ignore the long running complex relationship between London and the company which has been operating in the city since 2012. The relationship has been marked with tensions right from the start, characterised by Uber’s attempts to stall London’s efforts to step up regulation, for instance. Proposals to toughen up the regulation were significantly watered down, partly thanks to lobbying from former senior cabinet members, and, as emails seen by the Financial Times revealed, TfL’s annoyance with the degree to which Uber appeared to take it for granted. The safety concerns were well known too: in August, The Times obtained a letter from a senior police officer raising questions about Uber’s strategy for reporting sex attacks and other serious crimes, with one case involving a driver who went on to commit a more serious attack, after being kept on by Uber even after they had been reported to the company.

Uber is not the first minicab company with which TfL has played hard ball. Several years ago TfL fought back at attempts by Addison Lee, a premier minicab company that once dominated the London scene, to allow minicabs to travel in the bus lane, all the way up to the European Court of Justice.

There is, as some noted in the wake of the Uber ban, a certain irony to the company bemoaning the fate of the drivers when it had spent much time and resources attempting to distance itself from them: last year it lost the right to treat the drivers as self-employed, which had till then enabled them to be exempted from rules around minimum wage pay, holiday pay, among other things. Conversations with drivers ahead of the ban would have revealed the mixed picture that Uber presented to them: while many were grateful to have had the opportunity to move away from traditional minicab firms, that often gave them little flexibility over hours or other means of employment, the earnings potential was very limited, as was their potential for flexibility in the role.

Concerns about benefits

Concerns about the gig economy (an economy centred around individuals doing individually paid, odd jobs) have been present in Britain as much as they have elsewhere. A report earlier this year by a parliamentary committee warned that some companies were using “self-employed workforces as cheap labour,” to excuse them from responsibilities towards their workers and other liabilities, with implications for the individual and beyond. “The ease with which companies are able to classify their workforces as self-employed both fails to protect workers from exploitation, and potentially increases strain on the welfare state.”

However, many attempts to regulate it have fallen to individual or union campaigns, such as a recent victory scored by workers at London’s SOAS, where passionate campaigning by workers and students led to the university bringing work that had been outsourced in-house, thereby making some of the lowest paid workers entitled to the benefits available to others.

Unsurprisingly, Uber has attempted to distance itself from claims that it was part of the gig economy, insisting it was a “powerful” piece of technology that gave drivers access to passengers, in a recent appeal hearing related to the case. However, it is far from the only controversy it is in the midst of: public interest barrister Jolyon Maugham has initiated proceedings against the company alleging it is undercharging VAT on the taxi services it offers. His public fundraising campaign to pursue the case has exceeded its fundraising target of £100,000. “What is anti-business is allowing resentment to build against businesses who raise a metaphorical middle finger to society,” he tweeted following Uber’s scathing criticism of TfL that followed the ban.

September 30, the date when Uber’s licence theoretically expired, has passed uneventfully. While some drivers are fearful of the future, in London there seems to be a certain level of confidence that the ban is unlikely to be the end of the story, particularly with some concessions from Uber, for example on Greybull, the software used by the company which TfL warned could be used to “stop regulatory bodies from gaining full access to the app and prevent officials from undertaking regulatory or law enforcement duties.” However, there are far wider questions that remain, particularly around how governments and public bodies deal with the opportunities and challenges thrown up by technology and so-called innovation.


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