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Vigeo Eiris News - 31/03/2020

From Bad to Worse: How COVID-19 has exacerbated Social Risk in the Gig Economy

As the world grapples with the social and economic impacts of COVID-19, much of the attention in terms of social risk is focused on the medical staff who are on the front line fighting to save lives under challenging circumstances.

But there is another category of worker that remains highly active during this crisis: the gig worker1. And, in particular, drivers and riders for companies such as Uber, Postmates, Lyft, Instacart and Deliveroo, who continue to provide food deliveries, and other key services, to communities during the lockdown. In this paper, we highlight how the risks these workers already face have been exacerbated by the global public health crisis.

Risk Transfer in the Gig Economy

Gig-platform companies typically state that their role is limited to channelling the labour offer and that they are not responsible for directly controlling the performance of gig workers. This is an arrangement that benefits gig-platform companies because workers with employee status are often entitled to additional social protections.
Many gig workers are not classed as employees even though the gig-platform companies steer and control their performances3 and represent their main source of income. According to a survey of 200 Uber and Lyft drivers, 64.9% do not have an alternative source of employment or income beyond the work they do for these ride-hailing apps. However, because these workers are not classed as ‘employees’, the ride-hailing companies do not have major contractual obligations towards them. In essence, the gig-economy model has transferred a significant amount of risk from corporates to individual workers.

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icon-download-34x36 Gig Workers and COVID-19_Final_DEF
Keywords : ESG