Workers rights in the age of the algorithmic boss

We’re living in a time in which an increasing number of workers are employed in AI-mediated platform work. Many people like working this way, but it can be a precarious way to earn a living. This is a growing economy we have yet to understand, but we need to do so if we want to ensure those working within it are protected by a stable social security system and have minimum working rights.

My own interest in the platform economy started with a visit to Singapore recently for a research collaboration with the Singapore Management University. Singapore is a small, crowded, multi-cultural and multi-racial country without any natural resources. Maintaining a stable society is of utmost importance for the Singapore government, which saw that platform workers were falling through the cracks – not able to afford housing, healthcare, retirement, and working in less-than-ideal working conditions. I was struck by the government recognising that the problem was significant enough to intervene, which it has.

In New Zealand, apart from the occasional news on current cases such as “the meaning of employee” that Uber is appealing in the Court of Appeal, we don’t hear or know much about the platform economy, or those working in and for it.

I would argue that we need tailor-made labour laws to deal with platform workers in New Zealand. Worker wellbeing is not a priority for the algorithms that drive your typical platform. Their aim is to provide a smooth service for end users. Algorithms manage systems, things like surge pricing (raising prices when demand for a product or service is high) and controlling information about passengers, making decisions that used to be made by people. If something does go wrong for the platform worker, it can be hard to contact a human to resolve the issue. Who do you talk to if, for instance, your algorithmic boss has ‘bumped you off a platform’ (what was once called ‘being given the sack’) and not told you why?

Then there is the ‘black box’ problem, when we can’t see or understand how an algorithmic boss makes its decisions. (Some jurisdictions in the EU have passed a directive requiring that platforms be able to explain to workers how their algorithms make decisions.)

Platform work emerged suddenly as a new and idiosyncratic labour market and was initially categorised into the existing category of ‘independent contractors’. But an ‘independent contractor’ can set their own terms, working hours and rates. Platforms often set their workers’ terms and conditions for them, such as pay rates and dispute resolution processes. Unsurprisingly, some platform workers feel at the mercy of the app.

Unions in New Zealand are pushing Uber drivers to be recognised as employees, so they would be entitled to protections. This isn’t ideal as it doesn’t capture the subtleties of the platform economy. At one end there are ‘matching services’ such as BuildersCrack and Care.com, where the platform matches workers with end users, which usually have built-in rating systems. At the other end there are ‘vertically integrated firms’ such as Uber and Uber Eats, in which the workers can be viewed as being central to the business that the platform is providing. Moreover, more than a few platform workers cherish the freedom associated with gig work and don’t want to be constrained by an employment relationship.

As a result of changes to legislation in Singapore, platform workers will retain their status as independent contractors, but will receive some basic protections usually only available to employees. Importantly, platforms and platform workers will start contributing to the Central Provident Fund (CPF), which is like our KiwiSaver funds, but compulsory for all employees and with much higher rates of contributions. In Singapore, CPF funds can be used to fund housing, healthcare, education, and retirement. Unions will also be able to raise issues on behalf of platform workers, which will be decided on by electronic ballot, and the unions will then negotiate with the platforms. Any agreement will then be confirmed by the Industrial Arbitration Court.

When I began investigating the platform economy in New Zealand, I was surprised at how little we know. As far as I know, Statistics New Zealand doesn’t collect specific data on the platform economy, so we don’t know how big the platform workforce is. We can’t deal with a problem we can’t see. It would be good to start with a definition of who and what a platform worker is, for Statistics New Zealand to define the platform economy and start capturing the data.

It is possible that we aren’t yet seeing obvious problems in New Zealand because we have a strong social security system: free healthcare, ACC, welfare benefits, superannuation and so on. Those social services need to be funded and a growth in the platform economy could mean there will be lower tax takes to fund our social security system. If we don’t know how many are being employed as platform workers, how do we know if they’re paying their taxes? How do we know if the overseas-based platforms for which they’re working is paying tax?

These are questions we need to address. Sweden has a strong social security system, and its social contract dictates that everyone should pay their share to support social security. After it was found that some Uber drivers were dodging their taxes, Uber Sweden agreed to send information on drivers’ earnings to the tax enforcement agency and to train their drivers to file their taxes. Unions in Sweden have also been able to agree to minimum working conditions for Uber drivers, including pay rates and break times. New Zealand needs to think about how we can get platforms and platform workers to contribute their fair share towards our social security system, perhaps through better tax enforcement. I understand some work in this area is currently underway at the IRD.

Singapore will now oblige workers and platforms to contribute to the social security system, but its legislation (which has yet to be implemented) has also recognised that will need to to go hand-in-hand with providing better working conditions.

In New Zealand, platform workers should also have access to a formal representation process supported by legislation, which would give platform workers the ability to negotiate better working conditions.

As the platform economy grows, ensuring platforms and platform workers make a fair contribution to social security needs to happen alongside with providing minimum rights for workers. Failing to do so could lead to a rise in social instability, which won’t work for any of us.

Nadia Dabee will be speaking about Why gig work doesn’t live up to the hype – and what NZ can do about it, at Raising the Bar, Tuesday, August 27.