Challenges and Opportunities in Platform Work: Perspectives from Practitioners
Text: Benedikt Franke, Sarah Jochmann, Arne-Christian Sigge, Irina Kretschmer
In this contribution, four experts describe their views on platform work. They participated in platform-work “labs” held by The Policy Lab Digital, Work & Society at the German Federal Ministry of Labour and Social Affairs (BMAS) in May 2019.
Platform work labs
The labs held by The Policy Lab Digital, Work & Society at the German Federal Ministry of Labour and Social Affairs (BMAS) brought together two interdisciplinary groups, each comprising 15 experts from academia and practice. The participants included platform workers from the gig- and online economy, CEOs/board members from various work-related platforms, union representatives, social insurance experts, labour- and social law specialists, business IT specialists, sociologists and experts from the Organisation for Economic Co-operation and Development (OECD).
In running the labs, BMAS had three goals:
- To bring external viewpoints and expertise from differing areas into the Ministry’s processes from an early stage.
- To gain input and ideas from practitioners on designing decent platform work.
- To test a new format for participative policy design.
In the course of a four-day process, the groups drew up descriptions of the challenges faced and developed recommendations for action. In contrast to traditional-style workshops, the format of the labs encouraged participants to be more open to the standpoints and views of their fellow participants. Based on the jointly derived description of the challenges faced, they came up with consensual solutions and ideas. The Ministry limited its input to setting a general topic for the labs and deciding on the composition of the groups. The two groups were then free to decide on their key areas of focus and the approach to be taken in their recommendations for action.
Challenges faced in the platform economy
Despite the differing methodological approaches, the labs identified largely similar challenges in the platform economy and developed overlapping recommendations as a result. With regard to labour law, discussions centred on the better enforcement of existing law and more accessible procedures for clarifying whether platform workers have employee status. The lab participants agreed that social partnership and/or government “seals of approval for decent platform work”, as well as recommendations for minimum fees, would be useful additions. With regard to more far-reaching provisions on minimum fees and the organisation of self-employed persons under collective bargaining law, the participants pointed to the restrictions laid down by EU competition law. In matters concerning social insurance law, the recommendations focused on the possibility of including self-employed persons in the statutory pension insurance scheme and providing financial assistance towards pension contributions for those in the low-income segment. Other issues involved greater transparency in and monitoring of ratings processes on platforms, and greater data sovereignty for platform workers to reduce lock-in effects and dependency on specific platforms.
In the following section, four experts who participated in the labs give their views on platform work.
Benedikt Franke: Digital platform potential
In 2014 we founded Helpling, one of the first digital platforms for household cleaning and domestic services in Europe. We now operate in ten countries. In the past few years, our platform has been used by millions of households and suppliers to find the services and customers they need. This shows that platforms are now integral to everyday life.
But what potential do platforms offer for the organisation of work, something on which Helpling’s business model is based? Platforms use a form of organisation that offers a high level of efficiency: most of all, platforms are a highly efficient way of organising. They make it easy to search and communicate, help with arranging services and fixing appointments, provide access to electronic payment methods and create a sphere of mutual trust. Platforms thus significantly reduce transaction costs for those involved. Through the use of technology, the organisational costs of smaller businesses are suddenly lower than those of large companies. Helpling is essentially the small business owner’s SAP that also happens to provide them with clients.
As a business enterprise, our key challenge is to structure Helpling as a platform that offers our users the greatest possible value. We are convinced that the availability and quality of the service providers are key to a platform’s success. That’s why a successful platform should always aim to be the service providers’ platform of choice. And for users of our platform, the deciding factors are absolute autonomy and flexibility in how they organise their work – including the prices they charge – and independence from individual clients. We ensure the latter in that we advertise the platform to households and thus generate constant demand.
The state could also benefit significantly from the technological opportunities harboured by platforms. There is potential, for example, in the automatic transfer of contributions or automatic granting of tax credits.
The platform work debate
So, why do platforms come under fire from policy-makers despite their obvious potential? The debate is sparked by two issues which to all intents and purposes are not platform-specific. Platforms in low-income sectors are accused of brokering precarious work, even if the amount that can be earned is above the industry average. This is the case, for example, in the taxi business or in the household-related services sector. And if platforms also broker work to self-employed service providers, the social security coverage of the self-employed and their access to social insurance come to the forefront of the debate. This is an area where we also see huge potential and we are working to make our findings from ten different markets available so we can serve as a discussion partner. In this way, a social partnership for the future can be created, which also includes platforms.
Sarah Jochmann: Trade union challenges in representing platform workers
The use of new technologies has made it possible for platforms to act as work brokers in the digital working world. Right now, around five per cent of work in the labour market is organised via platforms. That share will increase in the future and other work models will be displaced. Platform workers, especially the solo self-employed, have a high need for protection because the awarding of contracts creates dependency. This in turn will lead to structural inequality and an imbalance of power as platform workers have no direct contact with the clients awarding the contracts. How can regulation be used to ensure that working conditions are not undermined if work is offered for sale on platforms in the same way as goods? How can we ensure that platform jobs are created that can benefit society?
Digital right of access for trade unions
The bicycle couriers’ fight for improved working conditions has shown how difficult it is to organise sectors that use platform work. Only a quarter of Lieferando’s 40 locations in Germany have an office where couriers can meet and the union can display notices. If platform workers are to become organised and take collective action, they need places where they can gather and meet. This decentralisation of jobs and work is exploited by employers. What is missing is a digital right of access for trade unions so they can provide information to their members on digitally organised platforms.
Promote collective bargaining
Many bicycle couriers only work for periods of between one and three months. They neither know what a trade union is, nor do they know that a union can represent their interests and protect their rights. Language barriers are an additional problem. In the beginning, the couriers’ trust of and loyalty towards the employer remains intact. If they have a bad experience or run into problems, they tend to change their employer rather than fight for their rights.
The subsidiary system of codetermination, negotiation processes and social partnerships needs to be further underpinned and expanded. Collective bargaining coverage must become more attractive again. One possibility would be to provide tax concessions to reward companies that adhere to collective agreements.
Support the organisation of fixed-term employees, clarify employee status
Many couriers struggle with repeat or ungrounded fixed-term contracts. These make it difficult for couriers to form a workers’ organisation or a works council. In Germany, for example, there are no protection mechanisms for bodies with fixed-term workers. This was one of the key reasons for the couriers deciding to form an independent workers’ organisation.
Added to this was the circumvention of the minimum wage via non-payment for work equipment that couriers had to provide themselves: a mobile phone with sufficient data volume, work clothes and a bike. Further, wages often go unpaid or are not paid in the right amounts.
If ex officio investigation proceedings were to be implemented at EU level, trade unions would be able to initiate a status clarification process to ascertain employee status and platforms would not be able to duck their responsibilities as an employer to the extent they do right now.
Dr Arne Sigge: On equal footing: Turning crowdworkers into long-term, stable business partners
The world of work has changed significantly in recent years and not only due to digitalisation. Shifts in social structures, urbanisation, home-based care/nursing requirements and changing leisure and consumer patterns call for the labour market to respond with flexible employment models.
But many sectors are still in an alarming state of standstill. In some respects, hybrid employment models collide with the much-acclaimed but somewhat outdated provisions of social and labour laws introduced a century or so ago. Currently, many contemporary employment models are hampered by legal uncertainty, lengthy status-clarification processes, high administrative costs and legal provisions that are not in keeping with the times.
Crowdworking platforms: Challenges and opportunities
On the one hand, contemporary models such as brokering microtasks to the solo self-employed via a crowdworking platform offer many opportunities. They give people the chance to participate in working life if they are unable to sit in an office for 40 hours per week because they provide home-based care, look after children or are themselves so seriously ill that a permanent job with regular working hours is either not desirable or completely out of the question.
The appeal for contractors/clients is, amongst other things, that projects can now be completed that were previously not possible because experts could not be found using traditional means or project-related capacity building was not economically viable.
On the other hand, solo self-employment calls for a high degree of self-discipline and self-responsibility that not everyone is born with. And the platforms themselves are challenged, too. A platform can only hold its own in the market if it manages to retain good crowdworkers. This is the only way that customers using the platform can be supplied with reliable, high-quality work.
Crowdsourcing Code of Conduct
If platform operators are to retain crowdworkers, they must adopt respectful, “equal footing” communication practices and provide transparency in relation to ratings and pay grades.
Fair pay which allows for adequate social security coverage, clear contract specifications, appropriate processing times and meaningful tasks ensures a positive environment in which people enjoy working and can be hired without hesitation.
These are all things which signatories to the Code of Conduct for Paid Crowdworking in the German Platform Economy1 (Crowdsourcing Code of Conduct) are trying to establish as standards. The affiliated ombudsman’s office ensures that the Code of Conduct is not just a paper exercise, but instead becomes the common, real-world understanding of fair working conditions on the signatory platforms.
What remains important is that everyone involved – clients/contractors, platform operators and crowdworkers – constantly remind themselves that there is a person sitting at the end of the shortened channels of online communication.
Irina Kretschmer: Everyday reality in the platform economy
Crowdworkers, clickworkers, platform workers – there are many ways to describe people who work in this new world of work. There are also vast qualitative differences between the various platforms and in some cases their poor reputations are really justified. But there are some shining beacons – and these should be declared as the benchmark.
Log in, search for suitable jobs and start the working day: crowdworking can take self-employment to a completely new level. That’s what it’s done for me. I’ve had only good experience working on my platform of choice. But starting up as selfemployed does have its difficulties – and this is where misunderstandings begin.
Self-employed or not self-employed
In Germany, prevailing law is gradually coming around to a common, contemporary understanding – for example, as shown by the recent Munich District Court (LAG) judgement on crowdworking2. As a general rule, crowdworkers can be self-employed – something I see as extremely important. I want to decide when I work, how much work I do and which jobs I take on. Then it is also up to me to decide how much I earn. This is where platform work is just the same as traditional business life: the better and more successful I am at what I do, the more I can charge for my work. There are good opportunities for upward mobility, but they call for hard work, discipline and perseverance. In turn, there is no guarantee that the platform can offer me a constant supply of work – but then that’s never a given for people who are self-employed. Why should it be any different where crowdworking is concerned?
The fact is:
- The platform is merely a marketplace where I can conveniently generate work.
- I decide for myself whether and which jobs I take on.
- The price to be charged is based on quality, although this is also negotiable.
Many pros, few cons
Of course, I can also become proactive and acquire orders myself, thus saving the not inconsiderable portion of my fee that the platform charges me. But when it comes down to it, that doesn’t pay off because as a crowdworker I can:
- Save my time and concentrate entirely on my work.
- Rely on the fact that my fee has already been paid to the platform the moment I accept the job and will be credited to me as soon as the client accepts my work.
- Benefit from the fact that in Germany, the platform contributes to my Artists’ Social Insurance Fund (Künstlersozialkasse) contributions, thus halving my health insurance costs.
In return, I refrain from contacting clients personally. All relevant information can, however, be exchanged via the internal messaging system. What seems like a disadvantage at first glance soon proves to be the opposite in practice: if discrepancies arise or conflict occurs, the platform steps in and mediates. For me, this type of work is the optimal solution because it is perfectly possible to perform anonymised platform work and still provide extremely friendly, personal service.