New protection afoot for the gig economy
Uber's first steps towards protection for contractors
Traditionally freelancers or independent contractors haven't had the same protection and benefits as full-time employees. But Uber has introduced a new injury insurance program for their drivers and delivery riders that paves the way for contractors getting more protections worldwide. One of the financial benefits of the gig economy for small business owners is you aren't obliged to offer contractors and freelancers the same protections as you do your full-time or part-time staff. That includes paying for workers' compensation insurance. In an unprecedented move, Uber has introduced free accident insurance to its drivers as of November 2018. This offers a workers' compensation-like insurance, while maintaining a contractual rather than employee relationship with drivers and riders.
How it works
In Australia, the insurance was developed with Chubb Insurance to ensure it meets Australian law. (Likewise Uber found insurers in other regions to help develop the product there.) UberEats and UberX drivers and delivery partners are covered by the policy once they accept a ride or delivery request via the app and for 15 minutes after the job is over (but not between deliveries or trips). It covers those driving a car, riding a bike or motorbike or walking and they're entitled to daily payments of up to $150 a day for 30 days if they're temporarily (medically) unfit to work, capped at $4500. If drivers suffer fractured bones caused by an accident during a trip, they may be entitled to a lump sum of up to $2,000, or in the case of disability or death, a payment of up to $400,000. An income supplement of $1,500 is also available for bodily injury.
What it might mean in the future
The multi-million dollar program is the first step in Uber's mission to establish employee-style benefits for contractors. In the longer-term, Uber want to work with governments and business to develop a new framework to support people in the booming 21st-century model of independent working. This new framework is something that has been discussed in Europe, where governments are acknowledging that increasing numbers of contract workers are missing out on social protections such as pregnancy, childcare and housing benefits. Uber is also pushing to get governments to reform laws that currently force Uber to classify their contractors as employees if they were to give them further benefits. The Australian Financial Review reported the French government has already passed laws allowing new work platforms like Uber to draft their own social charters, which would mean certain benefits don't necessarily indicate an "employment" relationship - as long as the platform takes on "social responsibility" which might include contributions to vocational training. It's a timely issue given the Fair Work Commission and Australian Tax Office's recent determination that gig workers at Foodora were not independent contractors but employees. That meant drivers were entitled to protections under the Fair Work Act, which included a $15,000 payout to one driver for unfair dismissal. So far Uber isn't covered by the same ruling as Foodora because its contractual arrangements are different.
The future for "giggers"
How long it will take before workers in the gig economy get sick leave, workers comp and holiday pay is unknown. Yet as the gig economy grows, the need for regulation around social protections for "platform" workers will become more pressing. For now, Australian small business employers are only required to cover people on staff through workers compensation. For more information on what those requirements are, and how much cover you need, contact one of Advisr's workers comp insurance specialists.
Advisr does not provide advice and does not hold a financial service license (AFSL). All information above has been provided by Andy Jamieson.