Understanding the terms used to describe the gig economy

There was some big news out of the UK yesterday. Uber has now moved to classify all drivers as “workers”. So what does this mean?

Being classified as workers means that some 70,000 Uber drivers and riders in the UK will now be entitled minimum wage, vacation time and a pension. This followed a decision by the UK Supreme Court which found in February that Uber drivers were entitled to employment rights.

Is the same true in Australia?
No, but the unions are certainly trying to fight for it. Yesterday, the Transport Workers Union (which is the union that represents Uber drivers) said “Australia must move quickly to regulate the likes of Uber in the right way”

In response to the announcement out of the UK, an Uber spokesperson in Australia said “In Australia we want to work with government, industry and workers on reforms that provide stronger benefits and protections for independent contractors in the gig economy.”

Independent contractors? 
Workers in the gig economy are classified as 'contractors', not employees in Australia. This means they aren't always guaranteed rights like superannuation, sick leave, penalty rates and a minimum wage. As such, there are the calls for the Federal Government to regulate the industry, not the states, and introduce an award wage.

Essentially, riders are contractors because they set their own hours. Uber (and other major players in the gig economy) argue if their contractors were classified as employees it is likely employees would lose the flexibility of choosing when and where they work.

The latest developments 
There is movement on this issue at a Federal level. Labor has proposed to establish minimum conditions for the gig economy, creating a new class of "worker" that would set minimum standards on pay, leave and unfair dismissal - but workers in the gig economy would remain independent contractors. But that's only if Labor win at the next election, so there won't be any immediate steps on this - the Government has said they are focusing on "increasing penalties for sham contracting" instead.