WageIndicator - With the rise of the gig economy, who pays the bill for unpaid work?

Author: Martijn Arets (Website - LinkedIn - Twitter)

‘To understand what precarious labour is and how it arises, we need to talk about unpaid labour,’ says Valeria Pulignano. The Italian sociologist works at KU Leuven researching labour sociology, European labour markets and inequality. ‘Unpaid work can be part of a sustainable, healthy labour market. But if the labour market does not work properly, it leads to inequality and poverty," especially in the context of a rising gig economy.

Despite unpaid labour being an important topic in the platform economy debate, you hear relatively little about it. To get a better picture, I went to Leuven for the WageIndicator Foundation's The Gig Work Podcast for a conversation with Pulignano. We talked about unpaid labour, the influence platforms have on it and solutions to ensure a better balance in the labour market.

Check out the podcast to listen to the unpaid work interview.

As the gig economy rises, what is unpaid work?

Unpaid work can be defined as social productive work outside of the public sphere of paid employment. The most obvious forms of this type of work take place in the private sphere. For instance, raising children is work, but you don't get money for it in return. The same goes for household duties or voluntary labour.

Unpaid labour also takes place within paid labour. Think of training courses in your own time, travel time without compensation and mandatory meetings and team activities outside working hours.

‘It is important to recognise and value this work,’ Pulignano says. A few years ago, in the context of the rise of the gig economy, she started a study on behalf of the European Research Council about the meaning and value of this type of work. With the ResPecTMe project, she wants to give unpaid labour the recognition it deserves.

Can time spent on work-related activities be considered unpaid work?

Unpaid labour as part of paid work is normally an investment in the future. For instance, a teacher needs to prepare for class, a marketer takes courses to keep his skills up-to-date, and a writer builds a website to attract clients. Such investments in time are part and parcel of being a freelancer. Typically, freelancers base their hourly rate partly on these costs.

For employed workers, the risk of investment in time normally lies with the employer. But with the rise of the platform economy, more and more workers are self-employed. That means the freelancer bears the risk of not getting paid enough for his unpaid labour.

One reason why platforms can accelerate rapidly is that they shift certain employer risks and costs to the platform worker. Take for example taxi app Uber. Taxi drivers couldn't make ends meet when their supply of work dropped by 80% during the covid lockdowns. If they would have been employees, Uber would have been required to continue paying them a wage.

Unpaid work, platforms and underpayment: what's behind the rise of the gig economy?

The rise of the gig economy provides further examples. For example, Pulignano found that unpaid labour in home care work via apps can lead to underpayment. ‘Workers take on a gig via the platform, but as soon as they arrive at people's homes it turns out that more is expected of them than is in the job description,’ she says. 'The rate turns out to be too low, but they don't dare turn down the gig or ask for more money. After all, they don't want bad reviews because that will lead to less work in the future.’

Another example of unpaid labour is the waiting time for food delivery workers. They have to wait for their next gig and often, they also have to wait at the restaurant until the food is ready.

Open and closed regimes: what’s the difference?

In closed regimes, platform workers don't need specific knowledge or skills. They are therefore easily replaceable. In an open regime, they are experts in their field, and it's harder to replace them.

In her search for causes and solutions of underpayment in the rising platform economy, Pulignano distinguishes between so-called ‘open and closed regimes’. ‘Food delivery platforms are an example of a closed regime,’ she explains. ‘Platform workers have little autonomy and control. They cannot build their own portfolio and the platform determines tariffs. They have unpaid waiting time and are sometimes even required to invest in working equipment from the platform. Normally, the employer would be responsible for these costs.’

In open regimes, freelancers are skilled IT-professionals, writers or designers working via platforms like Upwork. In these open regimes they have more autonomy, for example in terms of access to the platform, paid work and control over tasks.

Pulignano: 'However, freelancers working for open regime platforms in the rising gig economy have less autonomy than freelancers who work off-platform. Open regime platforms like Upwork determine the conditions of their work, such as prices. Freelancers often even need to pay to work by buying currency from the platform. Our research shows that digital freelancers who offer their services via platforms get less return-on-investment from their unpaid labour.’

Why is unpaid work different in open regimes?

‘Freelancers in open regimes often have more specific skills, they cannot be easily replaced,’ Pulignano explains. ‘These types of platform workers do have less autonomy than normal freelancers.

In other words, in the open regimes of the platform economy, their investment in unpaid hours returns less than when they work off-platform. This is because of the platforms' business strategy and technology, she says. ‘For example, rating systems have a lot of influence on freelancers' tariffs.'

Legal presumption of employment

In a closed regime, an employment contract could be a solution, she says. For example, she is enthusiastic about the European Platform Directive. The directive should give more protection to vulnerable platform workers who are controlled via an algorithm and struggle to make ends meet in the rise of the gig economy. Such workers can assume they are considered employees under the legislation. This legal presumption of employee status means that it is up to the platform to prove that someone is not an employee.

But for freelancers in open regimes, this is not a solution. Their way of working does not fit into an employment contract. It would give them not more, but less autonomy.

How can platform workers gain more control?

1. There are examples of platform workers trying to gain more control, for instance freelancers building an alternative rating system. But these are not structural solutions. In the rise of the gig economy, ‘Unpaid labour is a social and cultural problem,’ she says. ‘How do we make sure this kind of work is more valued? Unpaid labour can be part of a sustainable, healthy labour market, even in the platform economy. Unpaid labour can also foster employability or trap workers in precarious jobs. The outcome depends on whether the institutions of the labour markets are redistributing risks among those who should take those risks, such as the employers.'
   
2. That is why both the government and the business community need to work on solutions. ‘Unpaid labour in the gig economy can lead to more poverty and inequality in society. It is a social problem that policymakers, trade unions and industry associations need to address, in order to find a balance between workers' rights and the rise of the gig economy. After all, platform companies do not stand alone, they are part of a sector and the labour market as a whole.’
3. Platform companies must also take responsibility, she believes. For instance, by building fairer systems and offering more openness about algorithms and data. For example, if workers are able to download their data and take it with them to other platforms, this will lead to more control and autonomy.

What conclusions can be drawn?

The ResPecTMe study provides valuable insights on the impact of platforms on unpaid labour in different sectors of the platform economy. The distinction between ‘open and closed regimes’ makes it clear that an employment contract is not always a good solution to underpayment in the platform economy. The problem lies in the core technology, revenue models, and governance of platforms. With the rise of the gig economy, platforms are built to work for the benefit of the platform and its customers. The interest of the worker is often secondary, especially in platforms in the closed regime.

More  transparency to freelancers about tariffs, conditions and decision-making processes could lead to a fairer relationship. Pulignano wrote a book about this (co-author Marketa Domecka) that comes out this February: “The Politics of Unpaid Labour. How the study of unpaid labour can help address inequality in precarious work”. In this book, the authors introduce the theory of the politics of unpaid labour to advance understanding of inequality within the context of precarious work.

Policies and shared responsibility

I agree with Pulignano that governments and unions should take responsibility, especially given the rise of the platform economy.

I also advocate giving workers a mandatory decisive voice in the policies of platforms. In the Netherlands, for example, every company with more than 50 employees is obliged to appoint a works council (OR). We should similarly give platform workers a voice in platform policies.

One thing is certain: with the rise of the gig economy, it is time for a good conversation about the value of work. After all, platform work does not stand on its own. You can come up with many ways to make platform work fairer, but in a poorly organised labour market like the rising gig economy.

In short, we have a joint responsibility to achieve a labour market that works for everyone.

Want to know more? Listen to the full podcast episode on unpaid work in the gig economy now.