Advances in technology have made accessing products and services faster, cheaper, and more convenient. The emergence of online platforms have facilitated the sourcing of 'on‑demand' workers on a large scale, and have facilitated the efficient matching of those requiring services with those able to deliver them.
This chapter provides an introduction to the on‑demand and platform work economy in Australia. Specifically, the chapter considers:
the different types of models used by the various platforms operating in Australia;
the size and future growth of the on‑demand platform-based economy;
the industries and occupations affected by on‑demand platform work;
the demographics of the on‑demand platform workforce; and
the earnings and wages received by on‑demand platform workers.
The chapter also considers the recent impacts of COVID-19 on the demand for on‑demand platform work, and the inadequacy of data collection and statistics regarding the prevalence of on-demand platform work in Australia.
Although noting that there are many variations in platform models, the inquiry into the Victorian On-Demand Workforce (the Victorian inquiry) identified two discrete categories: crowd-work systems and work on-demand systems. The distinction related to the nature of the work being organised and whether the end user, or the platform, determined which worker carried out the task.
Under a crowd-work system workers apply, or bid competitively, to undertake a range of tasks, from skilled to less‑skilled work. Workers commonly have online profiles which include information about their experiences, qualifications, ratings, and feedback.
Under a work on-demand system, a particular platform allocates a task directly to a registered, currently available worker. Distinct skills are less relevant as these tasks are commonly homogenous, and services are usually expected to meet pre-determined and platform‑set minimum standard.
Examples of crowd‑work systems include Airtasker; Upwork; and Mable, and examples of work on‑demand systems include Uber; Ola; Deliveroo; and Menulog.
A crowd‑work platform operating in the care sector, Mable, stated that online models are commonly classified as either 'horizontal' or 'vertical', depending on the particular approach taken by the platform provider:
[I]t is critical that the significant variations in the various online models are understood. Typically, online models are classified as either ‘horizontal’ - where they facilitate interactions between freelance providers and consumers or ‘vertical’ - where the platform creates a hierarchy between themselves and the Service Provider.
Hireup, a competing platform focussed on providing disability care, made the distinction between a platform provider and a platform marketplace, and stated that the overarching purpose of platforms is to facilitate a three‑way relationship between the platform; the client; and the worker. It placed each platform on a spectrum based upon whether the platform supported an ongoing relationship between service provider and the customer or whether the service was considered a one‑off task or 'gig':
At one end of the spectrum, platforms that enable customers to book one‑off tasks or ‘gigs’ appear to genuinely facilitate a service-user to engage a contractor to perform a specific, one-off task, or ‘odd job’ (often reliant on certain skills, such as a carpenter or painter). This is akin to ‘classified’ ads in newspapers.
Towards the middle of this spectrum are platforms offering ridesharing and food delivery … The workers are entirely dependent on the platforms for their work, albeit that workers can choose when and where to work. However, again the work of each booking is clearly designed to be engaged on a single basis for one trip or one delivery, with no ongoing relationship between the customer and the worker.
At the other end of the spectrum are platforms offering services related to person-to-person care and support, whether that be aged care or disability support. We submit that these forms of personal support work are not the same as food delivery, or landscaping, for example. Support work is not generally task-based and it is not intended to be a one-off interaction between the client and the worker.
Prevalence in Australia and the impact of the COVID-19 pandemic
In a December 2020 green paper entitled, The Rise of the Gig Economy and its Impact on the Australian Workforce, the Actuaries Institute wrote:
The gig economy, as mediated by digital platforms in Australia, has increased rapidly in size over the past decade, increasing over nine times in market size from 2015 to capture more than $6bn in consumer spend in 2019 … Rapid growth has been fuelled by new customers, and increased frequency of usage by existing customers.
The Actuaries Institute used 'transaction data' to estimate the size and scope of the gig economy in Australia, and sourced these data from de-identified 'electronic bank transactions for more than three million individuals in Australia over five years'.
The Actuaries Institute defined the gig economy as economic activity in which 'the worker provides on-demand services, the worker is classified as an independent contractor and a digital platform mediates the transaction'.
Box 2.1: Estimates of the prevalence of gig work in Australia
From the 2019 Digital Platform Work in Australia: Prevalence, Nature and Impact survey report:
7.1 per cent of respondents had undertaken work through a digital platform in the last 12 months
13.1 per cent had undertaken digital platform work at some point
people aged 18–34 were more likely to be platform workers
men were twice as likely as women to be platform workers
gig workers were more likely to live with a disability
gig workers were 1.5 times more likely to speak a language other than English at home
temporary residents were three times more likely to be platform workers
permanent residents were 1.7 times more likely to be platform workers
In late 2018, the Victorian Government commissioned a national survey of over 14 000 people to inform the inquiry into the Victorian On‑Demand Workforce. The survey was 'undertaken in partnership' with the University of Adelaide, Queensland University of Technology, and University of Technology Sydney, and was 'targeted at identifying and putting questions to people about the work they were doing via digital platforms'.
Finalised in November 2019, the resulting report, Digital Platform Work in Australia: Prevalence, Nature and Impact, found that:
7.1 per cent of survey respondents are currently working (or offering to work) through a digital platform or have done so within the last 12 months.
13.1 per cent of survey respondents have, at some time, undertaken digital platform work. This rate of participation is similar to recent survey findings in Europe, and higher than some previous estimates for Australia.
Of the 13.1 per cent (1827 survey respondents) that have undertaken digital platform work, 38.7 per cent have only done work in-person at a specified location. In contrast 28.2 per cent have done computer or internet‑based work only, while almost exactly one‑third have undertaken both types of work at some time.
The Victorian inquiry's report also presented evidence of significant growth in Australian Business Number (ABN) applications by individuals. The Chair of the Black Economy Taskforce Advisory Board submitted that 'between the 2011–12 and 2017–18 financial years there was a 40 per cent increase in ABN applications by individuals'. This was correlated with a Commonwealth Treasury paper which suggested 'growth of the gig or sharing economy, may have played some part in the increase'.
A breakdown of industry categorisation of ABN applications, provided to the Victorian inquiry by the Australian Taxation Office, revealed:
a 249 per cent increase in the transport, postal and warehousing industry;
a 103 per cent increase in administrative and support services, which includes building, cleaning and gardening services; and
a 67 per cent increase in professional, scientific and technical services.
The Actuaries Institute wrote that the gig economy workforce 'may be as large as 250 000 workers'. If that estimate were correct, that would make it a sizable sector—larger than the industry categories of arts and recreation services, which employs 186 300 people; information, media and telecommunications, which employees 180 700 people; and double the size of the electricity, gas and water services industry, which employs 122 600 people.
A joint submission to the inquiry by the Attorney‑General's Department; the Department of Education, Skills, and Employment; and the Department of Industry, Science, Energy, and Resources (the joint Federal Government submission) highlighted that, in March 2018, the Association of Superannuation Funds of Australia had estimated that approximately 1.2 per cent, or 150 000 people, utilised digital platforms to obtain work on a regular basis. The joint submission also noted an earlier Grattan Institute study, published in April 2016 using 2015 data, which estimated that less than 0.5 per cent of adult Australians utilised gig‑economy platforms more than once a month.
Availability of data and statistics
Inquiry participants raised their concerns that currently-available labour statistics do not facilitate the identification of gig workers as a specific subset of workers. The Actuaries Institute wrote:
Traditional labour data sets are limited in their ability to identify gig economy workers. As a result, it is not possible to identify a granular characterisation of population segments in the gig economy and understand their needs or specific financial risks.
The joint Federal Government submission also highlighted this lack of information. It stated the following:
To date, there has been no comprehensive measurement or study of the on‑demand economy undertaken in Australia. There is also no definitive [Australian Bureau of Statistics] measure of on-demand economy workers specifically. Generally, digital platforms engage workers as independent contractors, and this would be captured in existing ABS data on independent contractors.
Previous analyses of traditional labour statistics, such as that by Michael Leith Cowling and Mark Wooden in 2018, have 'led to reports that the rise of the gig economy workforce may be exaggerated'. This is because a rise in gig workers has been expected to 'show up' in the employment data as an increase in self‑employed workers, which has not been observed. However, according to the Actuaries Institute, what traditional labour force data may fail to capture is that:
… workers have substituted one type of self-employment for gig work (e.g. Taxi drivers), or gig work has been taken up as a secondary source of income. In these cases, increases in the gig economy workforce will not be observable in the headline number of self-employed workers in Australia.
The Victorian inquiry also argued that, because 'headline labour market data' asks people about their 'main job', it may not always pick up platform work, which may be a 'side hustle'. In addition, the Australian Bureau of Statistics' (ABS) secondary jobs data may not capture growth in platform work for a number of reasons, including:
Some digital platform workers may have already been in the secondary jobs data—for example, those working in sectors which have traditionally used freelance/independent contracting arrangements. … Ai Group noted that professional service platforms tend to match consumers in industries with traditionally high levels of freelancing and independent contracting; like IT and theatre production. In such cases, platform mediated work may not be additional work but just a replacement of traditional methods of direct engagement. This platform work would not be reflected in changes to the percentage of independent contractors or secondary employment.
The Actuaries Institute noted that the gig economy in Australia 'is evolving rapidly, especially under the influence of the COVID-19 pandemic'. As such, it has issued a call for 'more data and research on the gig economy in Australia', in particular to better understand issues such as:
the impact of the gig economy on sectors of the Australian economy; and
the Australian workers participating in the gig economy, the needs of these workers and their associated financial risks.
Specific questions the Actuaries Institute believes need to be answered include:
What are the important workforce segments within the gig economy based on level of participation? These include:
Workers for whom gig economy work is their primary income source vs. supplementary income source.
Workers participating in the gig economy for shorter term versus longer-term periods.
The gig economy sector the worker participates in (for example, private transport, meal delivery and task-based services).
What are the demographic characteristics, financial risks and future employment pathways specific to the granular set of gig economy worker segments?
How is the size of the gig economy workforce, and the population segments within the workforce, changing over time?
The authors of the national survey also noted the need for more research, and better data collection on gig work:
The substantial level of participation in platform work uncovered by the survey points to the need for more attention to the design and administration of routine labour market data collection to capture this reality. … Future research should address the gendered nature of participation in digital platform work and the overall reproduction of labour market inequalities that emerge through the survey findings.
The Victorian inquiry argued for 'targeted, ongoing research about platform work … to ensure that policy makers and affected parties can take an evidence based approach in framing settings'.
Impact of COVID-19
The COVID-19 pandemic, and subsequent government responses, has significantly altered the way that businesses and consumers interact. This has resulted in broad disruption throughout the general economy, and brought about shifts in the on‑demand economy. This is shown in Figure 2.1 below.
Figure 2.1: Consumer spend growth during COVID-19 to October 2020
Actuaries Institute, The Rise of the Gig Economy, p. 32.
Although overall consumer demand in the gig economy reduced during this period, online platform providers, such as Uber Eats and Deliveroo, allowed many businesses to 'pivot' and begin offering their products and services via home delivery. This allowed many of these businesses to continue trading and softened the negative impacts of the lockdowns and restrictions on their revenues and workers.
The Actuaries Institute mapped an initial decline of around 70 per cent in the overall gig economy during the early COVID-19 lockdown period, due to 'a sharp decline in private transport'; followed by 'a surge in economic activity in the Meal Delivery sector of the gig economy', during the broader 'COVID-19 period', from March 2020 to October 2020, leading to a recovery in the sector:
The gig economy has recovered since the beginning of May 2020, capturing over 40% more consumer spend in October 2020 compared to the pre‑lockdown period in February 2020.
However, the Actuaries Institute noted consumer spending on private transport, such as ridesharing, 'remains lower', while meal delivery continues to grow:
Weekly consumer spend on meal delivery was 70% higher than pre COVID-19 lockdown levels in June 2020. The second round of lockdown in Victoria has caused spend in the gig economy to surge to even higher levels, with meal delivery spend over 100% higher in October 2020 than the pre COVID-19 lockdown period.
This growth was confirmed by a number of industry research companies. Hospitality Magazine reported on IBISWorld data which indicated:
Delivery has experienced a boom across the country. More than 4 million Australians use delivery services to order food … Uber Eats, Deliveroo and Menu Log continue to lead the market, with new player DoorDash launching earlier in the year.
IBISWorld's September 2020 industry report for the 'Online Food Ordering and Delivery Platforms' sector reported annual revenue for the sector of $847.9 million, with annual growth in revenues of 43.8 per cent between 2016 to 2021. The report stated:
The Online Food Delivery Platforms industry is expected to post revenue growth of 12.1% in 2020–21, constrained by declines in discretionary income.
In relation to ridesharing, IBISWorld's September 2020 industry report for 'Ridesharing Services in Australia' reported growth in industry revenues, annualised over the five years through 2020–21, of 20.4 per cent, reaching $693.8 million. The report predicted industry revenue is set to rise 13.6 per cent (annualised) 'over the five years through 2025–26, to $1.3 billion'. However, IBISWorld also reported a fall this year, of 6.6 per cent, 'due to the deterioration in demand conditions caused by the COVID-19 outbreak'.
Specific platform and driver impacts
In its submission to the inquiry Uber noted that, although Australia's public health and economic response to the pandemic had saved lives, it had also impacted Uber's various businesses and its drivers, delivery workers, and restaurant partners.
Uber submitted that these impacts were felt most acutely in early 2020, but also during the various lockdown periods later that year and in 2021. Uber highlighted that people increasingly relied on its services to connect with businesses and obtain food and other essentials while they remained at home. As a result, it reported that food delivery spend increased significantly over calendar 2020.
Deliveroo stated that the pandemic lockdowns highlighted the importance of the on‑demand sector to drivers and those working in restaurants. It submitted that digital platforms drove revenue in the restaurant sector and made a significant contribution to Australia's economic recovery during these periods.
The Chief Executive Officer of Deliveroo Australia, Mr Ed McManus, stated the following to the committee:
… in many states for a long period food delivery, along with drive through and takeaway, were the only form of revenue available to restaurants.
We've tragically seen some restaurants close that are unlikely to reopen, but many, many more would have closed permanently were it not for food delivery facilitated by Deliveroo and other platforms as well JobKeeper.
To quantify their contribution, Deliveroo commissioned research which found that delivery services supported $1 billion in turnover for Deliveroo partner restaurants and protected 38 000 jobs during the national lockdown period from April to June 2020.
Although the platform providers highlighted the importance of their services in sustaining businesses during the COVID-19 pandemic, a food delivery worker noted that there was an imbalance in the safety obligations placed on workers when compared to customers. In his evidence to the committee Mr Ashley Moreland said:
… we were told that it was absolutely mandatory upon delivery that we'd be wearing face masks—in fact, throughout the whole process—but at no point was there a directive to customers that they must wear face masks. So it was a double standard.
There are suggestions from a number of consultancy firms, companies and commentators that gig work may be increasing due to the impacts of COVID‑19.
Consultancy firm Gartner surveyed over 800 human resources managers in mid-2020, and found that 32 per cent of organisations were 'replacing full-time employees with contingent workers as a cost-saving measure'. Gartner reported that its analysis indicates:
… organizations will continue to expand their use of contingent workers to maintain more flexibility in workforce management post-COVID-19, and will consider introducing other job models they have seen during the pandemic, such as talent sharing and 80% pay for 80% work … While gig workers offer employers greater workforce management flexibility, HR leaders will need to evaluate how performance management systems apply to these workers and determine whether they will be eligible for the same benefits as their full-time peers.
IBISWorld reported in June 2020 that the global freelancing site, Upwork had seen 50 per cent more 'freelancers entering the marketplace since the coronavirus begun'. It also pointed to American online grocery delivery service, Instacart, which had hired more 'temporary workers and freelancers' to manage increasing demand during COVID. IBISWorld's estimate in June 2020 was that 'the number of temporary employees' would increase by 1.8 per cent over the year.
Professional services firm, KPMG has predicted that 'gig arrangements' are set to grow as a feature of the workforce in the future, as businesses are less able to afford full-time workers, and there are 'less permanent positions available due to automation'. KPMG argued this will help the economy recover from the impacts of COVID:
Supply will come from organisations needing to add new skillsets and capacity while retaining flexibility to combat volatile conditions. Demand will come from individuals who increasingly need new sources of income. This matching of supply and demand via gig arrangements will help the economy recover faster than expected.
Industries and occupations most affected
According to the 2019 national survey, gig workers are most likely to be working in:
transport and food delivery (18.6 per cent of platform workers);
professional services work (16.9 per cent);
odd jobs or maintenance work (11.5 per cent);
writing or translation work (9 per cent);
clerical and data entry (7.8 per cent);
creative and multimedia work (7.7 per cent);
software development and technology (7.2 per cent); and
care services (7.0 per cent).
The six most common platforms used by gig workers in Australia were:
Airtasker, used by 34.8 per cent of platform workers;
Uber, used by 22.7 per cent;
Freelancer, used by 11.8 per cent;
Uber Eats, used by 10.8 per cent;
Deliveroo, used by 8.2 per cent; and
Most workers (64.8 per cent) used just one platform; however, just over one third (35.2 per cent) used more than one, and 11.4 per cent were registered on four or more platforms.
The Actuaries Institute noted that the two most heavily impacted sectors are 'private transport' and 'meal delivery', and 'a large proportion of the gig economy workforce [are] concentrated in these sectors'. It also added:
The overall private transport sector has grown by 39% between 2015 and 2019. This growth is driven by increased customer usage of gig economy private transport providers (e.g. Uber, Didi, Ola). There is evidence of cannibalisation of traditional private transport providers (e.g. Taxi drivers), with consumer spend on traditional providers declining by 6% between 2015 and 2019. However, the larger impact of gig economy provider entry remains stimulation of new demand. Meal delivery is a high growth sector, growing over six-fold since 2015 to capture $3.8bn of consumer spend in 2019. This growth has been largely driven by rapid growth of gig economy entrants.
The Centre for Future Work at the Australia Institute analysed statements made by Uber Eats about its contribution to 'supporting work opportunities in Australia'. It commented that, while Uber and other platforms 'use vague and strange language to describe their staff' (calling them 'partners' or 'drivers', rather 'workers' or 'employees', 'Uber Eats says it created 59 000 such 'opportunities' in 2020, up eight-fold since 2016'.
The Centre for Future Work noted that, if these 59 000 people 'were genuinely working for Uber Eats, Uber Eats 'would qualify as one of Australia’s largest employers', making it 'twice as large (by number of workers) as iconic Australian companies like BHP (with around 20 000 Australian employees), Westpac Bank (30 000), Qantas (25 000), or Telstra (26 000)'. This is clearly not the true picture, the Centre submitted, as only a sub-set of these individuals are 'truly performing this job in any economically meaningful sense'.
The Centre for Future Work further noted that the food and beverage industry accounts for around 5 per of total employment in Australia. If there are approximately 100 000 people signed on to platforms to deliver food, that would represent 'close to 1% of total employment in Australia', and would be mean the market is flooded with more people than it needs to deliver food:
That 100,000 people have signed on to do this work (then spending much or most of their work time doing nothing) is a sign of their desperation and their lack of alternative opportunities; in a purely economic sense it represents a massive misallocation of productive potential.
In relation to the demographics of gig workers, the national survey found:
young people, aged 18–34, were more likely to work through digital platforms;
men were twice as likely as women;
gig workers were more likely to identify as 'living with a disability';
gig workers were 1.5 times more likely to indicate that they 'spoke a language other than English at home';
compared with Australian citizens, temporary residents were three times more likely 'to be a current platform worker', and twice as likely 'to have been a former platform worker' at some stage; and
permanent residents were 1.7 times more likely than Australian citizens 'to be current or former platform workers'.
Gig workers who worked more often, and were more dependent on gig work, were those who identified as disabled, unemployed, or as temporary residents. They mostly provided services to Australian clients only (65 per cent of respondents), and most Australian clients were based in New South Wales (34.4 per), Victoria (24.5 per cent), and Queensland (16.6 per cent).
Gig workers were concentrated in New South Wales (14.3 per cent of those who had ever done gig work, and 7.9 per cent of current gig workers); and Victoria (13.8 per cent of those who had ever done gig work, and 7.4 per cent of current gig workers). Respondents to the national survey who had done gig work were more likely to live in a major city than a regional or remote area.
In the national survey, 15.4 per cent of current platform workers considered the income earned from platform work 'essential for meeting their basic needs', while 52.3 per cent said it was 'nice to have' but they could 'live without it'. Only 2.7 per cent of current platform workers indicated that digital platform work made up 100 per cent of their income, while 80.7 per cent said it was less than half their income. People most likely to indicate a reliance on digital platform work 'for meeting basic needs' were people with disabilities, unemployed respondents, and those doing care or transport and delivery work.
Forty per cent of platform workers surveyed 'did not know how much they earned per hour'. Among the other 60 per cent, the average rate was $32.16 per hour, with professional service workers reporting 'higher hourly rates (above $50 per hour)', while clerical and data entry workers, and writing and translation workers, reported much lower hourly rates (between
$1–$9.99 per hour).
The national survey found that the median income 'estimated by transport and food delivery workers was $20 per hour'; and 'care platform workers estimated earning, on average, $21.60 per hour'. However, estimates by Melbourne rideshare drivers averaged only $12.88 per hour, and the national average was $14.62.
Platform workers were positive about the flexibility of the hours, ‘working for themselves’, and ‘choosing their own tasks or projects’, but were less satisfied with ‘earning a fair income’, and ‘the fairness of fees and costs associated with working through the platform’. In addition, 15.3 per cent of respondents who had ceased platform work had done so 'because they found full-time (or more suitable) employment', and a further one in six report that 'income earned through the platform was insufficient, either in absolute terms or relative to the time investment required'.
The authors of the national survey concluded that:
The findings suggest a troubling level of obfuscation associated with digital platform work in relation to both the terms on which workers engage and the true level of remuneration involved.
Earnings and wages across a number of platforms operating in the rideshare, food delivery, parcel delivery, and care sectors are discussed in further detail in Chapter 3.
The committee acknowledges that the COVID-19 pandemic and associated government responses have significantly altered the way businesses and consumers interact. The committee recognises the important role that on‑demand platforms played for both businesses and workers during this period of economic and social disruption, and notes that many businesses relied on these platforms' services to continue operating throughout government‑initiated trading restrictions and lockdowns. Notwithstanding this, the committee is very concerned about the rapid increase of the 'on‑demand' and 'gig' economy, and the impacts of the insecure and precarious nature of many of the roles it supports.
The committee also notes evidence suggesting the potentially unproductive nature of many of these roles, and the fact that some platforms may be 'flooding the market' with far more workers than are needed to fulfil demand; thus creating the promise of an income where no there is no realistic hope of earning a living.
Industry groups tended to argue that workers engaged by on-demand platforms represent an insignificant component of the workforce, and that they do not rely on these earnings; however, the data cited are often out-of-date, such as the 2016 research from the Grattan Institute, using 2015 data. Not only are these data six years old, they pre-date the COVID-19 lockdowns, which saw a massive growth in the use of food delivery services, and a corresponding increase in their contract workforces.
The committee notes that there were varying estimates of worker remuneration, and that survey data indicated that a significant number of platform workers did not know how much they earned per hour. The committee is concerned about this lack of clarity for on‑demand workers, and discusses these issues in more detail in subsequent chapters of this report.
Inquiry participants highlighted the lack of relevant labour statistics and data as a key issue in understanding the needs of these workers and the physical, financial and other risks they face. The committee notes that there is also inadequate data regarding work‑related injuries and fatalities within the on‑demand platform sector. These issues are further discussed in Chapter 5 of this report.
This lack of robust, reliable data has restricted the committee's ability to identify the true size and nature of the on demand workforce. The committee believes it is critical that this gap in our national knowledge‑base be filled through the regular collection and publication of robust data by the Australian Bureau of Statistics and Safe Work Australia.
The committee recommends that the Australian Bureau of Statistics expands its Labour Force Survey to capture quarterly estimates in relation to the number of workers engaged in the on-demand platform sector. These estimates could include the industries and occupations in which they work, the hours they work, their visa status, the nature of their working arrangements relative to other workers, earnings and other demographic characteristics.
The committee recommends that the Australian Bureau of Statistics enhances its Work-Related Injuries Survey to capture specific information on the number, and types, of injuries and fatalities for workers engaged in the on‑demand platform sector.
The committee recommends that Safe Work Australia enhances its national data collection process to capture specific information on the number, and types, of injuries and fatalities for workers engaged in the on‑demand platform sector. The committee further recommends that all road crashes involving on-demand workers be officially recognised as workplace incidents and are recorded and investigated as such.