'Throwing workers a bone': Deliveroo calls for national laws to govern gig economy
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'Throwing workers a bone': Deliveroo calls for national laws to govern gig economy

A new class of worker should be created to cover gig economy employers Deliveroo has argued as part of a plea for a national shake up of workplace legislation.

The food delivery platform made a submission on Tuesday to the Victorian government's inquiry into on-demand work calling for a "Future Work Act" to allow it and other platforms to offer riders benefits without employment in what has been described as a "third way".

Deliveroo's country manager Levi Aron.

Deliveroo's country manager Levi Aron.Credit:Justin McManus

However experts and unions criticised Deliveroo's legislative push claiming it was merely "throwing workers a bone".

Deliveroo's submission compares the proposed legislation to the Fair Work Act saying an equivalent was needed for "modern" ways of working.

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“To end the trade-off between flexibility and security, we believe law reform should be considered that allows workers to accrue benefits on the basis of work performed, for example, the number of deliveries completed or the value of fees earned, rather than their ordinary hours of work, and that the provision of benefits by a company to a self-employed contractor should not impact their employment status," it says.

Deliveroo argues the current system “disincentivises” companies from offering contractors greater security in the form of benefits.

Any legislation would need to be implemented at both federal and state levels and Deliveroo has proposed the governments “work in tandem” potentially through the Council of Australian Governments (COAG) agreeing to model legislation that could be implemented uniformly.

Deliveroo suggests a Future Work Act could enable companies to provide benefits to contractors including accident and injury or third party liability insurance, income protection when temporarily unable to work because of an accident, sick pay, and training.

Deliveroo has 6500 riders in Australia and said 67 per cent of all sessions, measured by the duration that people are logged into the app, are for under three hours.

On average Deliveroo said its riders work 15 hours a week, earning over $22.00 per hour on average.

Levi Aron on his Deliveroo bike.

Levi Aron on his Deliveroo bike. Credit:Simon Schluter

In the submission, Deliveroo pointed to riders rejection of orders as a sign of the flexibility offered.

“Riders frequently reject orders, for example, because they’re currently completing an order for another platform or restaurant and the offer isn’t convenient for them,” the submission said. “In the last six months, 93 per cent of riders rejected at least one order and on average each order was rejected once before it was accepted.”

The average amount of time a rider works with Deliveroo is only five months which Deliveroo attributes to “many riders see riding as a short term opportunity rather than a long term commitment”.

A spokesperson for Uber said the transport and food delivery platform would also make a submission to the inquiry before 20 February.

"We recognise this is a complex policy area and any reforms will require input from workers, the community and business," the spokesperson said.

Jim Stanford, economist and director of the Centre for Future Work, said the push for legislation from "a rear guard action by Deliveroo to head off what it fears."

Dr Jim Stanford, economist and director of the Centre for Future Work at the Australia Institute.

Dr Jim Stanford, economist and director of the Centre for Future Work at the Australia Institute.

"The business model of companies like Deliveroo, Uber and Lyft is completely dependent on their ability to assign workers as contractors not employees," he said. "If these companies had to pay minimum wage and other normal conditions of employment they would not be viable."

Mr Stanford said the offer by Deliveroo to provide benefits in exchange for workers not being employees is a "token promise".

"In general that is window dressing to try to make the current situation, which is very exploitative, more tolerable.  Real benefits would be minimum wage, overtime, paid holidays and sick leave," he said.

"I also note it would be tied to work performed rather than time spent and that is a huge distinction as these companies depend on the free time of gig workers waiting for the next job."

In general that is window dressing to try to make the current situation, which is very exploitative, more tolerable.

Jim Stanford

Tony Sheldon, co-ordinator on the on-demand economy for the Transport Workers Union said Deliveroo is "throwing workers a bone to try and shut them up" and "inventing new ways to keep underpaying its workers."

Mr Sheldon said last year workers woke up to a 30 to 40 per cent pay cut when Deliveroo increased delivery distances without warning.

"This is another public relations exercise to try to hide the exploitation that goes on every day,” he said.

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Cara is the small business editor for The Age and The Sydney Morning Herald based in Melbourne

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