MPs call for an end to 'bogus' self-employment status and 'free-riding' companies in the gig economy

LONDON — Drivers for companies like Uber and Deliveroo need full employment rights as they are currently vulnerable to “exploitation,” according to a cross-party group of MPs.

The Work and Pensions committee, chaired by Labour MP Frank Field, said that “free-riding” employers were “potentially creating an extra burden on the welfare state while simultaneously reducing the tax contributions that sustain it.”

The large numbers of self-employed workers who work for firms like Uber, Deliveroo, Hermes, and Amazon are not currently entitled to holiday pay, pensions, or other workers’ rights, allowing such firms to cut employment costs significantly. The report also criticised Uber’s recent announcement that it will begin charging its drivers for sickness cover.

Uber, which has 40,000 drivers in its UK network, said that a large majority of its drivers were happy with its terms.

A spokesperson for the firm said in a statement: “Almost all taxi and private hire drivers in the UK have been self-employed for decades, and with Uber they have more control over what they do.

“The vast majority of drivers who use Uber tell us they want to remain their own boss, as that’s the main reason why they signed up to us in the first place.”

A UK employment court last year ruled that Uber drivers are not self-employed and are entitled to the national living wage, a decision the firm is currently appealing.

The report said that employers which rely on self-employed workforces frequently promote the idea that flexible employment is dependent on self-employment status, but argued that the distinction is a “fiction.”

It said: “Companies relying on self-employed workforces frequently promote the idea that flexible employment is contingent on self-employed status. But this is a fiction.

“Self-employment is genuinely flexible and rewarding for many, but people on employment contracts can and do work flexibly; flexibility is not the preserve of poorly paid, unstable contractors. Profit, not flexibility, is the motive for using self-employed labour in these cases.”

The report called for measures which would designate those in the gig economy the employment status of “worker” rather than “self-employed” by default, a measure which it said would “put the onus on companies to provide basic safety net standards of rights and benefits to their workers, and make the requisite contributions to the social safety net.”

It said that “companies wishing to deviate from this model would need to present the case for doing so.”

Commenting on the report, Field said: “Companies in the gig economy are free-riding on the welfare state, avoiding all their responsibilities to profit from this bogus ‘self-employed’ designation while ordinary tax-payers pick up the tab.”

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