ProDriver Congress London, June 6, 2017 - Panel Session 3: Employers, workers and the gig economy
Gary Jacobs, DriverServ
David Harmer, Accountax
Mike Bell, Driven Worldwide
Sean Sauter, Green Tomato Cars
Dominick Moxon-Tritsch, Public Policy Matters
The session was opened by Gary Jacobs, who provided an overview of the subject in the light of recent developments that have affected the so-called “gig economy”, such as the Uber and Pimlico Plumbers employment court cases.
These had been interpreted as posing a threat to private hire operators’ way of doing business, which relies heavily on the use of self-employed drivers. Jacobs stressed, though, that many of the issues raised by the gig economy had been around for much longer.
Jacobs also felt that the while the big picture might appear to be changing, at the micro level, there were a lot of obstacles to turning everyone into employees and “self-employment is entirely possible and entirely defendable”.
David Harmer: “operators needed to understand what they can and can't do with the self-employed”
David Harmer from Accountax emphasised that operators needed to understand what they could and couldn't do with self-employed individuals, and also to ensure that contracts and working practices matched each other in order to be compliant.
Dominick Moxon-Tritsch of Public Policy Matters outlined the costs of reclassifying self-employed drivers as workers, including the need to observe the Working Time Directive, pay the National Living Wage of £7.50 per hour, and also to provide holiday pay, which had been the point at issue in many of the relevant tribunal cases.
As Jacobs pointed out, if private hire companies had to concede worker status, this could increase the cost of maintaining the workforce by some 20%: “That’s your margins gone…your flexibility's gone, your financial flexibility's gone,” he warned.
Mike Bell: “Most drivers prefer the flexibility of self-employed status”
Mike Bell, CEO of chauffeur operator Driven Worldwide, wasn't against legal protections designed to prevent drivers being treated badly but argued that most of them preferred self-employed status anyway because it gave them flexibility and the ability to work for more than one operator.
Jacobs thought the trade unions’ campaigns in this area could be seen as trying to push for rights for people that those people didn't themselves want. Moxon-Tritsch pointed out that the average Uber driver only worked for the company for just 12.5 hours per week, typically at the peaks, and that this tended not to be their most important source of income.
Nevertheless, Moxon-Tritsch thought that some sort of change in the form of a “Modern Employment Bill” was likely. Matthew Taylor, who was conducting a review of employment practices in the gig economy for the Conservative government, appeared to be in favour of recommending that anyone engaged via a contract containing exclusivity provisions should be a worker.
Dominick Moxon-Tritsch: “Taylor Report is likely to recommend anyone with exclusive contract is a worker.”
Another potential issue was who should be responsible for paying the minimum wage or holiday pay where a driver was working for more than one operator.
Jacobs highlighted another aspect - the tendency for technology to advance more quickly than legislation and regulation. For example, the distinction between engaged and unengaged mileage was being eroded because drivers equipped with modern technology could be regarded as “engaged” as soon as they entered their cars at home and logged on at the beginning of a shift.
A similar problem emerged during the subsequent discussion concerning the distinction between drivers “working” and “being available to work”, and which was relevant for questions such as the minimum wage.
Returning to the Uber case, Moxon-Tritsch thought it was unfortunate that this had been seen as the test case for the industry because Uber’s operations weren’t particularly typical of the private hire business as a whole, not least because the degree of control it exercised over its drivers was comparatively low. Nevertheless, the Uber judgement could be problematical for the trade because it appeared to be written tightly in such a way as to be essentially “unappealable”.
Gary Jacobs: “Worker status could increase the cost of the workforce by 20%”
However, Jacobs thought there was always the prospect of adapting to any new regulations by adopting workarounds such as the umbrella companies set up to place workers in the healthcare industry on PAYE in response to the IR35 rules.
Moxon-Tritsch also raised the possibility that the government would respond to Taylor’s likely recommendations on an industry-by-industry approach that would recognise some of the specific needs of the taxi and private hire businesses, pointing to the accommodations that were already in place reflecting the particular requirements of the construction industry.