JuLY 2023
In the seventh episode of our “In Conversation with…” podcast series for 2023, Lucy Lewis, Partner at Lewis Silkin LLP is joined by fellow partners Colin Leckey and Tarun Tawakley.
“There is the opportunity to be ahead of the regulators and not wait for the regulation to catch up with you but be the ones who are innovating and taking the lead when it comes to developing the models that are most attractive for the people who want to work with you.”
As expectations around work continue to evolve, Colin and Tarun discuss the big questions surrounding the future of the platform economy, including opportunities to foster good work and the impact of regulation on the future landscape.
Key takeaways from the conversation:
- Platform work has advantages: whilst there are well-publicised concerns that the platform economy could foster insecure work, it can provide individuals with genuine flexibility and enhance DE&I.
- Good work and platforms: platforms are starting to offer more benefits, perks and a sense of community, notwithstanding the current legal uncertainty and risk of reclassification from self-employed to worker.
- Regulators are playing catch up: achieving an appropriate balance between heavy and light touch regulation is very difficult, there is currently no consensus and approaches vary across the globe.
- Platforms have the opportunity to take the lead: platforms can be ahead of the regulators and be the ones who are innovating and leading when it comes to developing models that are attractive for those that want to work for them.
In Conversation with…Colin Leckey and Tarun Tawakley
Season 3: Episode 7
What is the difference between the gig economy and the platform economy?
Lucy Lewis: Hello, and welcome to the Future of Work Hub’s ‘In Conversation with…’ podcast. I am Lucy Lewis, a Partner in Lewis Silkin’s employment team. And in this podcast series I will be hosting exclusive discussions with innovators, business leaders and thought leaders to explore their perspectives on the longer-term trends and immediate drivers shaping the world of work.
Now, the growth of gig working and platform working has resulted in significant changes in the way that we live and the way that we work. We may not be gig workers but, if we are not, we will definitely be gig consumers. And research has found that the number of people working in gig economy platforms in England and Wales nearly tripled between 2016 and 2021 with 4.4 million people working for gig economy platforms.
But, what exactly do we mean when we talk about gig work and platform work? And what does the future hold for work in the platform economy as our societal expectations continue to evolve, particularly around work and the place that work has in our lives, but also what we expect from work and what we expect from the organisations that provide us with work. And what role should regulation play? As business models continue to evolve and they respond to opportunities presented by technology and the increasing digitalisation of work, what is the role of regulation?
To answer those questions, I can say with certainty I have got two real experts because they are two of my fellow Partners at Lewis Silkin, Tarun Tawakley and Colin Leckey. Both Colin and Tarun have particular expertise in issues relating to platform and gig economy business models and they both advise a range of innovative technology businesses. Tarun was also the Head of Employment and Commercial Litigation at Deliveroo for four years before we welcomed him back to Lewis Silkin in 2021. So, welcome to the podcast Colin and Tarun.
Lucy Lewis: Now, let’s start, very briefly, let’s go back to basics and talk about terminology. What do we mean when we are talking about platform working and gig working? What are those things, are they different?
Colin Leckey: Well, platform work and gig work are essentially one and the same thing, but they perhaps have a slightly different public perception. So, platform work is essentially any work in which the end user of services and the provider of those services is connected using a web-based platform. That is where the term comes from. But gig economy which, essentially, is just finding work through a platform has become associated in the public eye with particular types of platform work and we think, most obviously, of food delivery platforms or arrangements through which you might have a mini-cab sent along to you. But platforms operate in a range of different industries and really any industry in which services can be provided in that simple tech-based way, with end user and provider of services being connected and the traditional organisation being disintermediated, is ripe for operating in a platform or gig type way. So, we see it with doctors who these days might provide their services through websites which aggregate the services of different GPs, or you see your plumber or your builder who uses ‘MyBuilder’ or ‘Check-a-Trade’ to offer their services to the market using it too. And really, there are sort of few industries in which work can be done remotely, by somebody with a laptop or other tech-based systems, that are not ripe to a degree of platformisation.
Tarun Tawakley: I think that is right Colin and, building on those themes, it is important not to mix up platform work, gig economy work, with the legal label that may be attached to the relationship. It is common to think about platform or gig economy work as being self-employed or independent contractual relationships given the media focus on this aspect of the market.
However, as you say it is really common to see lots of different industries and lots of different types of relationships be engaged in this way and lots of different legal labels attached to it. So, for example, we might see worker status models in the UK, in particular in the quick commerce grocery delivery space. We might see employee status models in more traditional industries for example, work involving on-demand lawyers, and platforms for larger businesses also to share their wares with members of the public. For example, if you are booking a trip on Airbnb, you may also choose to book an experience that is made available through the platform. So, while staying in your lovely little cottage in Italy you may want to book onto an experience such as a cooking lesson in a local restaurant which again can be facilitated through their platform.
The Rise of the Platform Economy
Lucy Lewis: Thanks both. I want to come back and pick up some of what you said about, particularly, the media perception of all of this but, actually, what you have said highlights really well that the sort of breadth of services that are provided in this way, highlights how much the platform economy has come into its own, how successful it has been in disrupting traditional markets, the impact that’s had on shifting business models. You know, it has dramatically changed the way that lots of people work and, as I said at the beginning, even if we do not work that way, we definitely…we definitely consume those services. And it has sort of become difficult to imagine life when we did not have household names like Deliveroo, like Uber, Airbnb, you have talked about. And I am really interested in your thoughts about how and why the platform economy has developed so successfully and the impact that's having on the way that people work.
Tarun Tawakley: I think you are right, Lucy. It is really hard to imagine the time before this and, without giving away my age, I can remember the time before that, the time before mobile phones and the time before the internet, God forbid. But I think there have been a couple of key trends that have really been driving forces behind the growth of the platform economy. First and foremost it is about the available technology, this has removed the need for the middleman or large corporations with layers of management to match services with consumers. The smartphone and the development of apps have, frankly, revolutionised the way work opportunities can be made available.
Secondly, we have seen shifting societal consumer and worker values and expectations in terms of the types of work people want to be doing, the way that people will purchase services and the way that individuals interact with each other.
Finally, there has been a real trend towards wanting more flexibility and actually this is on both sides, both on the individual side on a personal level but also on the side of organisational agility. The concept of the side hustle has grown and pursuing diverse interests and income streams is very much the norm. I think back to my own time at university and law school when I worked part-time for the mobile phone network O2, as they were called back then, selling mobile phones and supporting their customers. I remember the early days of smartphones and apps and I had no real concept of what would be enabled through this technology that I was selling at the time. If I had the opportunities available to me at that time that are available today, I'm almost certain that I would have been engaged in the platform or gig economy whilst being a student as opposed to a more traditional role in a bricks and mortar real estate site. Just thinking about the opportunity and the ability to be able to fit work around your other commitments, it's truly transformative.
Lucy Lewis: Thanks Tarun.
And that really provides some useful context for the rest of our discussion and the questions get a bit more difficult from here. And it seems a good time to come back to that mention you made of media because, when we are talking about the platform economy, that seems to me the elephant in the room. There is, or there has been in the UK at least, you know, negative press around the impact that platform working can have on the workplace or on the work landscape.
You know, taking an example, there has been a lot of focus on the idea that there is one-sided flexibility, this sort of perception that this type of work can push vulnerable workers into really insecure work that does not have basic benefits, does not have basic protection and a lot of that has come from the reporting around some of the employment litigation status cases, you referred to those…I know you have been involved in those. And yet, on the other side, you will hear really loud champions of working, you know, gig working, platform economy working - people that say “no, it provides us with really genuine flexibility”. And it is clearly very nuanced, we don’t necessarily get the full picture from this media portrayal, and I am interested in both of your views about that.
Colin Leckey: Sure, yeah, I mean I think it, to some extent it is unfortunate that a lot of the media coverage of the platform economy revolves around these employment status disputes that you have referred to where, by definition because it is a litigation scenario, one side has a vested interest in playing up the downsides of gig economy work and you know the supposed negatives in terms of the insecurity of individual status, facts on wellbeing, trust, job satisfaction and so on and that does tend to overlook or certainly risk overlooking some of the key benefits that come from working within the gig economy. And I certainly echo what Tarun says about, like there is a lot of us sitting there thinking back to the sort of 9 to 5 retail jobs that we did when we were students, thinking, well you know how much nicer it would have been in many ways to have had the opportunity to you know, put down your books when you were revising and, you know, do the odd delivery and have that as your way of making some money on the side at a time and a place of your choosing rather than the…the ways that were available back then. And you know that is true for students, it is true though for the wider workforce too, that platform work creates more flexible opportunities for earning and for supplementing income and you are giving people greater control over their working hours and the chance to develop new skills and it is a net work creator. We see that in the economic studies.
But it also has advantages from a DE&I perspective as well. You think for example of the person with caring responsibilities who wants to be in a position where they're able to pick up and drop off their kids at school and chooses to work for a couple of hours in the middle of the day at the flexible time of their choosing and do their work then rather than being tied to particular hours that are imposed upon them by an employer.
Or another example might be a neurodivergent individual who is not particularly comfortable working in teams, but uses the opportunities afforded by the platform economy to do really good work on their own and in the way that they like to do it and prefer to do it. So, you know that these are real tangible benefits for individuals and the wider economy that are really important not to overlook when we are considering this debate.
Lucy Lewis: Tarun, I promised you the opportunity to say something, or at least I said I wanted to hear from both of you. Before I go on to pick up on some of the themes that Colin has raised, is there anything that you'd like to add?
Tarun Tawakley: I think Colin has given a very clear summary of these things. The only thing I would add is that these examples that Colin has cited very much ring true with my experience in my former life when, as when I was at Deliveroo, I used to go out and I used to complete deliveries via the app like any other rider and I've talked to fellow riders, both in that capacity and in the context of my role in the business and these sorts of stories of the kinds of opportunities this kind of work opens up to individuals very much ring true with what I was hearing and what I was seeing when I was in those positions.
can The platform economy facilitate good work?
Lucy Lewis: Thank you both. And as you were talking about that it brought to mind one of the things that we have been talking about quite a lot on this podcast series and particularly post pandemic and that is the importance of good work or the concept of good work and by that I mean, you know work that promotes dignity, autonomy, equality - work that has fair pay and conditions. And achieving good work is going to be really important in the platform economy as that grows. And I know that you both know this, but for the purposes of our listeners that the World Economic Forum has published a Charter of Principles for Good Platform Work and that covers some really key themes, things you would expect to see. Encouraging companies to provide flexibility, promoting health and safety, encouraging diversity, enabling professional development but then also working with governments to ensure that platform workers are not being restricted from access to benefits, you know social benefits and insurance, that sort of thing.
And I know that both of you have worked with a wide variety of different types of platform businesses as part of the advice you give, and I am interested in your views about this idea of the platform economy and good work. In other words, the platform economy if you like becoming a champion for good work rather than something that people think can’t facilitate good work.
Tarun Tawakley: I think it is a really interesting point and, as we have touched on in this discussion so far, there is a public narrative about certain aspects of the platform or gig economy. But I think one point that is worth emphasising to the extent it is not already clear to your listeners is actually that, one of the really interesting aspects of platform work in the gig economy in particular is, actually, platforms can never compel or expect anyone to go online at any particular time, at any particular location and, in particular in things like food delivery, in unfavourable weather conditions.
So, platforms I think for a long time have been thinking about, actually how do we make sure there is an alignment of incentives? How do we make sure individuals want to use our platform, that we are a place where people want to purchase services, provide services, and overall boost the economy? And because of this I think in a way they have actually been ahead of regulators for some time.
There’s long been a sort of well understood trade-off for those platforms who do engage individuals on self-employed or independent contractor models for those platforms that want to offer more benefits, perks or a sense of community without impacting some of the core flexibilities inherent in the status that those individuals work under. Put simply, the more perks, the more benefits, the more community you create, the greater the risk of reclassification potentially. And we have seen this specifically come out in certain judgments across Europe. That said, platforms even in the absence of legislative certainty, have sought to move in this direction anyway for exactly the sorts of reasons that I was mentioning earlier. And we have seen them move first on insurance, then on wider benefits, and more recently on improving wider skills and life opportunities for individuals who choose to use their platforms.
We have also seen some platforms move towards engagement strategies more similar to those seen in the normal world of work today. Colin, do you want to talk a little bit about collaborations that some of these platforms have reached with more traditional bodies like trade unions and employee organisations like that?
Colin Leckey: Yes, certainly we have seen a sort of really interesting trend in the last year or two towards platforms in the UK, but also internationally, striking up partnerships with trade unions. Which to some extent gives the lie to notions that the platform economy is inherently hostile to sensible modes of collective recognition and engagement. But, because of the nature of platform work the sorts of things that are traditionally the focus of collective agreements, collective bargaining agreements, things like hours and holiday are of less meaning in a world where as Tarun says, you do not have any fixed hours, you can work as much as little as you want and as far as holidays are concerned you can take off as much time as you want whenever you want to so. But, the focus is different. It is about well, in this world of flexible work, how do I ensure that I have the right protections in place if I fall ill or get injured? How do I plan for the future in terms of pension? What other benefits, insurances and so on might I want? How else might I want to engage with the platform in terms of the way in which work is provided to me? What do I need to know about the way algorithms operate or the way in which work is distributed.
So, we are starting to see some quite interesting developments in that space. Building on other ways of engaging with workers operating via platforms because it is not just with trade unions we see that, sizeable platforms will have their own sizeable teams internally working to engage with those who provide services through the platforms because it is in their mutual interest to do so. And, as Tarun says, just as a platform worker wants understandably to maximise the opportunities that they have from a platform for making profit and generating revenue for themselves, equally from the platform's point of view, in terms of its market position, naturally it wants to maximise the number of people who want to work with it and do a good job for the ultimate consumers of services. And so, these are important features of the platform economy, and we are seeing them growing.
Tarun Tawakley: But equally we do not want to leave listeners with the impression that there is not regulation that is catching up with these sorts of things, and we have seen laws like this passed in France for example, the mobility law there which developed the social charter, which was at the time really the first of its kind enabling platforms to provide benefits to those individuals who sought to use their platforms to provide services, without or at least minimising the impact those actions might have on the question of reclassification.
The mobility law and social charter in France also created a legal and bespoke framework for social dialogue between platforms and individuals who engage with them, putting in place the kind of bespoke arrangements that Colin has talked about, but this time underpinned by legislative framework.
what will the future hold in terms of the role that regulation and policy has for the platform economy?
Lucy Lewis: Thank you for that Tarun.
And actually, that leads me to exactly the question I want to ask you, and it's the last question we have got time for before the end of the podcast, but I can’t have two lawyers here and not talk about regulation.
So, as you have started to share your thoughts on that, you know we know that sometimes it can feel like, where there is rapid adoption of new technology, it can feel like legislation is playing catch up. And you've provided some really useful information there about why that is not necessarily the case. But we still, I think, have this tension between needing to ensure that we have a business environment that fosters innovation, but balancing that with appropriate employment and social protections and I am really interested in your thoughts about where that balance lies; where it lies between policy and regulation if you like, that sits with the government, and leadership and self-regulation and being you know a good employer driving good work in some of the ways that you've shared are happening. Where do you think the balance between those two things lies? What will the future hold in terms of the role that regulation and policy has for the platform economy?
Colin Leckey: Yeah, so I will take that first.
Well, I think we should start by acknowledging that it is difficult and it is an inherently political debate that is taking place within each nation, or in the case of the EU, there is a lot of regulation in the European perspective at an EU level on what the appropriate balance is to strike and a lot of that depends on perspectives that legislators have as to whether the platform economy is seen as a generally good thing or a generally bad thing, or somewhere in the middle. Because you can be of the perspective that this is a good thing because it generates a great deal of work opportunities for people in our economy and our society, we want to encourage that so we are going to take a light touch approach to regulation, or you can take the view that this is something that has a lot of negatives to it and we need to sort of clamp down on it and limit its growth and push people into more traditional employment relationships because we think that anything else is potentially detrimental to them.
An example of the latter category , you see where the EU is heading with its draft platform workers directive, which is making its way through the EU legislative process at the moment and it has been the subject of a number of different drafts and redrafts by different EU bodies which gives you an indication of just how difficult it is to get this right, and how much politics is involved. But a central concept with this is that you should have a presumption that anyone working through a platform who meets certain criteria, which are indicative of subordination and control, should be presumed to be in an employment relationship for certain purposes such as labour tribunals unless the platform can effectively prove otherwise. And the idea is that this will apply to any business which uses automated processes and decision-making systems in the way in which it offers services.
So that is an example of a very heavily regulated approach. Then you have the sort of more light touch regulatory approach that you perhaps associate with post-Brexit Britain, at least under this Government, or I can think of countries in Asia Pacific like Hong Kong, Singapore for example, maybe some of the middle eastern countries like the UAE and the US of course…gig economy began…different approaches depending on the state you are in. If you are in California they have a very restrictive ABC law under which pretty much anyone working through a platform is classified as an employee by default. But then you have sort of laissez-faire states that take a very opposite approach.
So, I give those examples just to make the point that you know there are divergent approaches to this and, you know, no consensus yet on where exactly the right balance is. But from the perspective of the platforms and to answer your question about, well what should they be doing in terms of providing good work? Well, of course, platforms are regulated by the environments within which they operate, they have to comply with applicable laws, so that is not something that can be avoided or ignored. But, at the same time, and again, Tarun has touched on this, there is the opportunity to be ahead of the regulators and not wait for the regulation to catch up with you, but be the ones who are innovating and taking the lead when it comes to developing the models that are most attractive for the people who want to work with you, for putting in place the insurances, the benefits, the sort of social protections that the people that you are engaging with, going back to the previous question - the way in which different platforms are doing that, are calling for, because you are seeing that visibly within your organisations, that’s really the way to do it.
Tarun Tawakley: I think that is right. And also, there are lessons that can be learned from other markets and, going back to what you were saying Colin which I think is absolutely right, the approach to regulation may depend on:
(1) the starting position of the legal landscape in your market; and
(2) your view of the gig economy.
I sort of think back a few years ago to some legislation that I will not be able to come close to pronouncing, but I am going to refer to it as the De Croo legislation in Belgium after the minister that proposed it, which is what it was colloquially known as in the market. But Belgium has a very restrictive employment law environment for platforms to operate and, actually, to boost participation in the collaborative economy it specifically passed bespoke legislation, this De Croo legislation, which sought to facilitate and boost the collaborative economy, giving specific tax-free allowances for individuals to try out the economy. So, creating this sort of middle status between employee and self-employment which is very regulated in the market and needs specific registrations and business structures in place to allow people to earn a limited amount in the collaborative economy, to see if it was something they were interested in, something they wanted to go professional within.
Equally you’ve got concepts, which again are not directly applicable, but if you think about markets like Australia where they have a concept of casual employment, sitting in between what would be traditional employees and those that are independent contractors or self-employed. So, in Australia, this is actually a subcategory of employment. But what I think is quite interesting about this idea is the market has understood that there is a trade-off between flexibility and certainty. And the way that it has sought to address this, whether rightly or wrongly, is to say, ‘well actually we are going to have what's referred to as a casual loading for individuals who work casually’.
So, to reflect the fact that they may be in a slightly more precarious position in terms of rights and benefits, we are just going to apply a percentage uplift - the casual loading - to what would be normal minimum wage, to allow for people to work flexibly and to allow the sort of agility that business models like platform economy and gig economy arrangements provide for, but to build in a price for the uncertainty that that places on individuals. So, there are lots of different approaches being adopted across the world and I think, as Colin said, it is about trying to find the right balance here.
THE FUTURE OF WORK – WHAT IS MISSING FROM THE CURRENT CONVERSATION?
Lucy Lewis: Thanks both, and really interesting examples there and nice to finish with a question about regulation and legislation.
We are coming to the end of the podcast, but I would like to ask you the question that I have been asking all our 2023 podcast guests, and that is that the last few years have shone a spotlight on the future of work and the huge number of opportunities and challenges that lie ahead. But what I would like to hear from the two of you about is what you think is missing from the current conversation on the future of work. What do you think is not getting the attention it deserves and why do you think that is important?
Colin Leckey: Well, if I go first on that and you have noted that you have got a couple of lawyers, so I am going to have a wish for a piece of regulation. In the post pandemic world I spend a lot of time advising on the topic of remote work overseas, and of course this is relevant to the platform economy that we have been talking about but it goes much wider than that, that so many of us now are able to do our work from anywhere with the help of a laptop and an internet connection, and as we have all seen what that means for many people is wanting to do that work for short, medium, or long periods of time from a country that is not their own. It is all very nice in principle, the idea that you go and sit in your villa and spend an extra four weeks there over the summer and maybe do some work on your laptop from your sun lounger or maybe you take six months to go and stay with your relatives in a distant land and work from there, or maybe you want to relocate more permanently. And very often, both workers and employers are all in favour of that, but then they run into the tax, social security, immigration law, employment law, data privacy law, health and safety law headaches, that mean that coming up with a consistent global framework for dealing with that is very complicated indeed.
So, my wish is for legislators collectively to get their thinking caps on, on a cross-border basis and come up with a framework that is simple, usable, easy to understand for employers that could be used to tackle these sorts of problems.
So for an organisation like the EU which brings together 27 different countries, what an opportunity here to come up with a directive that would be really beneficial to the working lives of so many employees working right across the continent and I think it surprises me that there has not been more of a focus on that regulatory dimension, but I hope…that is something I certainly hope to see in the years ahead.
Tarun Tawakley: I mean, other than echoing that I would love to be able to work from a sun lounger in Spain for significant parts of the year… trying to think of something that is different that will not necessarily have been covered by a number of your previous guests where, understandably, a large part of the focus has been on AI and the impact of this massive technological change, I am going to try and be slightly different and admit that I am being somewhat influenced by Apple's recent announcement of their new VR headset and instead, I am going to flag the potential impact of the metaverse and this interesting concept that I think is going to start to become more and more in the public consciousness of the difference between virtual and hybrid worlds in what the future of work might look like.
How will working time operate in this new world? Will we see new legislation addressing harassment, discrimination and other protective measures to protect individuals’ avatars and the way they manifest themselves in these worlds? Or will that just be something that needs to be covered under existing laws which as we have discussed in this session may not be fit for purpose.
The opportunities for DE&I, are huge but how do we make headsets safe for those who are pregnant or those who have photosensitive conditions, which at the moment they are not.
And how...you know we have all just got used to the idea of hybrid work and we're still helping companies deal with their return to the office policy and the right blend between office and home, but what will that mean in a world where we are all hybrid between in real life and virtual? It is going to be fascinating to watch this space and watch to see regulators and businesses struggle to catch up as technology continues to disrupt.
Lucy Lewis: Thank you both. Both really interesting and you got in there first before me. I was going to make a similar comment about spending the year on a sun lounger, it can’t be bad!
Thank you both for joining me. It has been really great to talk to you and to hear your experience and what you're seeing and the really interesting examples that you shared.
If you are listening and you want to find out more about the work that Tarun and Colin are doing, you can visit our web site at www.lewissilkin.com.
Thank you both.