A Workers’ Observatory: a new tool for gig workers?

The media’s lens will swing back to the gig economy this week as the UK government gears up to deliver its response to the Taylor Review. But many details of conditions and contracts in areas like couriering, delivery, care, and hospitality gig-work remain unobserved. An observatory into the collaborative economy could be a vital educating, agitating and organising tool.

Last week the Scottish government published the report it had commissioned to generate ideas for ‘reshaping’ the collaborative economy. The report insists that gig workers must have an effective and collective voice (following principles of the Fair Work Framework), and points to the importance of self-organising and trade union presence in the gig economy. It also proposes that government should support workers’ self-organising and fund skills-development. These recommendations prove the importance of having top-level union voices on key government panels.

But the authors, drawn from unions, businesses officials and others, also admitted that darkness still conceals so much about the collaborative economy. Confronting malpractice depends on a sharper and more detailed view of conditions and changes in the sector. And above all it depends on the kind of information-sharing and collaboration that is lacking across most new platform-based systems: collaboration between workers themselves.

Mapping the Gig Economy

The collaborative economy is the fast-expanding sector of goods and service exchange, arranged via online platforms like Uber, Deliveroo, Amazon and eBay. The name suggests the each platform works like a hive of cooperative activity – but for many workers in the sector, the work is neither cooperative nor collaborative. The term ‘gig economy’ is a better reflection of the worker’s viewpoint. Each gig is a demand for a discrete service or good – food, home care, a taxi – that a worker can in principal choose to deliver or not. This means the sector is based on horizontal contracts of individual ‘contractors’. These platforms are typically one-way tracks between workers and apps, which often conceal a system of control and coercion.

Gig economy workers have conducted inquiries into platforms like Deliveroo, which have established that the extent of choice and control workers have is close to nil. Such workers’ inquiries have found that many apps have functions to nudge and coerce workers into committing to shifts without knowing what they will earn for that shift. To refuse a gig carries the risk of being refused future gigs, and for many who rely on platforms to make a living this is not flexibility, it is false freedom.

But it is hard to build an accurate map of the gig economy, because the rosters of workers, the data about local demand, and the algorithmic managing codes are uncharted and unobserved by almost everyone. Apart from the platform providers only privileged bodies can request it – such as the Scottish Affairs Select committee which in March obtained evidence that most Uber drivers earn most of their income from the platform, despite insisting on its model benefitting ‘flexible’ workers.

An Observatory for the collaborative economy

Encouragingly, the report fully recognised how much remains hidden in the computers and accounts of platform owners. One of its potentially ground-breaking recommendations, in an understated box on page 10 of the report, aims to penetrate this darkness. It recommends that government sets up:

‘an observatory into the collaborative economy … [to] collect, aggregate, analyse and publish a variety of datasets that show the ongoing impact of collaborative economy platforms in Scotland. This would be a new way for platforms (local authorities and conceivably workers) to agree to share certain data and would address the clear data and evidence gaps that exist in order to track activity and impacts.’

But workers themselves should not be placed in parenthesis. If the concentration of information and data is all with the employer, or even the government, then workers are in the dark while employer surveillance observes their every move.

The benefits of a workers’ observatory: educate, agitate, organise

It is easy to think of benefits flowing from this kind of insight. It could give access to the information workers could use to understand the practices and policies that control their schedules and wages. With a better picture of their sector, workers could arrange courses and skills-development relevant to their field of work. Workers could develop the skills and tools to keep a check on the company they work for (with systems like turkopticon, ‘a place for workers to help one another with information and their experiences about employers’). And workers could develop education that would allow them to create truly collaborative enterprises where workers are in control of their pay, schedules, and work.

A workers’ observatory would also provide a tool to expose malpractice, through reverse surveillance of platforms that could bring to light instances of discrimination or breaches of employment law. With an observatory, workers could identify issues locally, and start to coordinate action together. This could be the basis of agitation and other activity to improve conditions and contracts.

Finally, an observatory could allow workers to access the kind of information that will help with self-organisation to link up and form union branches to secure their rights and build power. Information such as pay-rates, the number of staff, the ratio of part-time to full-time reliance on systems, and other information form the basis of any organising strategy.

Giving an observatory the tools and power to penetrate these platforms would give workers skills, put pressure on companies to stop malpractice, and shift power back to self-organised workers.

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OUTSOURCING CRISIS – SOURCES AND SOLUTIONS

SOURCES OF THE OUTSOURCING CRISIS

The collapse of Carillion and the spiralling situation of Capita and Interserve serve as reminders that multinational outsourcing companies are bad value for our public contracts. They act as debt laundering schemes, starving pensions and services of funds in order to fuel profits and dividends.

Following Carillion’s collapse, Capita, another outsourcing giant, saw its shares plummet on 31st January by 47%, their lowest value since 1998. Interserve, another outsourcer which has contracts to provide nurses and care assistants in Scotland, served a profit warning last year. On 1st February, their share value fell another 15%.

Why did Carillion collapse?

When Carillion collapsed just over two weeks ago, on 15th January, it had a huge pension deficit.

Essentially, the company had not provided enough money to pay workers’ pensions, despite paying shareholders dividends of £78.9m in 2016, exceeding the amount it generated in cash from operations. It paid a further dividend of £54 million in June 2017 – just one month before its first profit warning.

In 2012, outside advisers said Carillion had prioritised growing earnings and supporting the share price ahead of the pension scheme. For 10 years, the Carillion pension trustees tried to get the company to pay in more money to the scheme without success; so the profit warning in mid-2017 was not a surprise to those in the know. Hedge funds had been betting against them since 2015. Despite these concerns, its Chief Executive, Richard Howson, received a payout in 2016 of £1.5m. As its profits decreased due to low margins, Carillion took on more debt (to meet its day to day running costs) and stockpiled contracts from Government.

As others have said, Carillion was operating a giant Ponzi scheme. That they received £1 billion in taxpayer’s money, while known to be in huge financial difficulty, suggests the UK Government was complicit in maintaining an outsourcing system against the public interest.

The slide in Capita and Interserve’s share price has led to understandable comparisons and questions being asked as to whether another outsourcing conglomerate is about to fall.

out sourcing

What about workers and projects in Scotland?

Carillion had 1,169 workers directly employed in Scotland, with 112 working as modern apprentices. A number of other workers are not directly employed but are also impacted by Carillion’s collapse, including those working for sub-contractors on projects such as the Aberdeen bypass; railway work at Paisley, Shotts and Waverley Station; and various facilities management contracts with public bodies and Housing Associations.

The liquidator is attempting to secure a transfer of Carillion workers over to other companies – for example Balfour Beatty and Galliford Try in the case of the Aberdeen bypass – but has already announced 377 redundancies across the UK.

Capita employs an estimated 4,000 people in Scotland involved in financial services; human resources; information technology; life & pensions; property services; software; police and justice; and emergency services. They run the £325 million Scottish Wide Area Network (SWAN) contract involving the Scottish Government, NHS and more than half Scotland’s local authorities which aims to establish a single shared network and common ICT infrastructure across Scotland’s entire public sector.

How are Unions responding?

Unions have been warning about precarious work in the construction and outsourcing industries for decades, and despite union campaigns and even legislative change, public contracts continue to be awarded to the worst offenders. Bogus self-employment; umbrella contracts; a serious lack of health and safety standards; and the systematic blacklisting of workers – these are scandals which our procurement and outsourcing systems facilitate.

A clear audit of the workforce is desperately needed and the STUC will be working with other unions to attempt to develop this and wider research into the construction and outsourcing industries.

In Scotland, as across the UK, Carillion symbolises a decaying carcass of public service provision based on financialisation and outsourcing. Whilst wages stagnate, the cost of living rises, and austerity continues, workers and taxpayers are left to pick up the costs of outsourcing.

Surely we can do better than this? The STUC is calling on the Scottish Government to:

  • Bring Carillion contracts back in-house;
  • Map the impact of Carillion’s collapse and explore the impact of any exposure to Capita and Interserve. As well as direct employees, this exercise should consider the wider supply chain of agency workers, self-employed workers and those on umbrella contracts;
  • Place a moratorium on public service outsourcing while a root and branch review is carried out;
  • Commit to ending PFI and similar, Scottish specific schemes, and work with public bodies to minimise costs on existing projects including through buying out schemes where appropriate;
  • Establish a Scottish National Construction/Investment Company to take forward public infrastructure and investment projects.

The only way to win these demands is by ensuring that workers immediately affected are engaging with each other through their unions, and taking action to put them into effect.