This chapter focuses on platform-based rideshare, food delivery, parcel delivery, and care services. It provides an overview of each of these service areas and details the evidence provided to the committee by a number of key players who engaged with the inquiry. The discussion also provides background information on each platform, their current and future workforce models, and information presented regarding worker protections and remuneration.
In addition to the evidence provided by inquiry participants through their submissions and attendance at public hearings, this chapter utilises information from the comprehensive inquiry commissioned by the Victorian government into the Victorian on-demand workforce (the Victorian inquiry).
Overview of platform-based rideshare services
Notwithstanding the ongoing COVID‑19 pandemic, the demand for passenger services has grown in recent times, and the traditional taxi industry has been materially disrupted by the introduction of rideshare platforms, such as Uber, in the domestic market.
Rideshare platforms allow passengers requiring transport to request trips via applications downloaded onto their phones. Passengers are then provided with a proposed fee and asked to confirm before the trip information is posted to a driver close to their collection point. If a driver rejects a job, it is then provided to another driver within the vicinity. Once a trip is completed, both parties may 'rate' each other, and payment is made via the passenger's credit card.
Uber submitted that rideshare platforms complement public transport services and can extend their reach. For example, the majority of a journey could be undertaken via public transport, such as a government‑run train service, with rideshare providing transport at both ends; that is from the passenger's original location, such as his or her home, to the train station, and then from the train station to the passenger's ultimate destination. Uber submitted this 'first and last mile' gap is a common barrier to the increased utilisation of public transport.
Rideshare platforms do not currently employ their workforces. Workers are allowed to determine if, and when, they work, and are not restricted from undertaking work across a number of platforms. The platforms set fare prices and generally take a commission or fee.
In its final report, the Victorian inquiry provided a number of estimates of driver income. Specifically, it referenced a 2019 national survey which showed that transport sector workers reported a median income of $20 per hour; an estimate by AlphaBeta that income for drivers in Sydney was $21 per hour, after expenses and fees; and evidence from a particular rideshare driver who estimated that take-home pay was $22.80 per hour.
Other estimates provided to that inquiry were lower, and ranged from $12.88 per hour for Melbourne drivers to $17.50 per hour for experienced Brisbane drivers. A national average figure of $14.62 was provided, as well as an average of $16 per hour across platforms.
The Victorian inquiry also noted that drivers commonly 'undertake significant unpaid work administering their business and cleaning vehicles', and estimated driver costs, including platform fees, ranged from half to two thirds of their revenue.
The committee received a number of estimates of income from platform providers and drivers who engaged with the current inquiry, either through their submissions or by attending public hearings. These particular estimates are discussed for each platform later in this chapter.
Research undertaken by three academics in 2017 across food delivery workers operating in Perth and Melbourne found that they were ‘predominantly young, non-Australian residents (47 of the 58 interviewees indicated that they held temporary work or student visas) and had low English language skills’.
The 2019 national survey also supported this earlier research, finding that transport workers are likely to be younger, have temporary residency status, and speak a language other than English at home.
A survey of rideshare platforms
Uber was the first platform to deliver a ‘rideshare’ service, and was conceived in 2008 by Mr Travis Kalanick and Mr Garrett Camp when they could not find a ride while in Paris. On 5 July 2010, the first Uber ride was provided to a passenger in San Francisco.
Uber is now a global organisation that is available in approximately 71 countries around the world, including the United States and Canada, Latin America, Europe, the Middle East, Africa, and Asia. In 2012, Uber launched in Sydney with its Uber Black offering.
Since launching domestically, Uber has expanded from an inner city product to one which is available in 43 cities across Australia. In its submission, Uber highlighted that the percentage of Australians utilising point‑to‑point transport services has grown from just over 30 per cent in June 2016 to almost 45 per cent in June 2019.
Evidence provided by Uber to the Victorian inquiry indicated that the majority of its drivers were Australian citizens and male. Notwithstanding this, Uber noted that the demographics were changing slowly, and that there were a higher proportion of female drivers on its food delivery platform.
Workforce model and worker earnings
The General Manager of Uber Eats, Mr Matthew Denman, described the relationship between Uber and Uber Eats and its drivers and delivery partners as 'very much that of the independent contractor'. In support of this assertion Mr Denman said:
There are no set shifts when you partner with Uber. Delivery partners go online where they want, when they want and for as long as they want. They have the right to accept or not accept trips. They wear no uniforms. What the Fair Work Ombudsman and commission found is that the level of control that delivery partners and drivers have on the Uber and Uber Eats platform is very much consistent with that of independent work.
In its submission to the inquiry, Uber provided further details on the findings of the Fair Work Commission. Specifically, it stated that the Fair Work Commission had concluded in 2017, 2018, and 2019 that its driver partners were not in an employment relationship with Uber.
Uber ridesharing earnings
For rideshare drivers on its platform, fare trips are collected by Uber and then transferred to the driver, minus Uber's service fee. The fare is based on time and distance estimations, using rates published by Uber, as well as the pickup location and destination entered by the customer. In his evidence to the committee, the General Manager of Uber Australia, Mr Dominic Taylor, stated that Uber's commission ranges from 20 per cent to 25 per cent, excluding GST, of the fare paid by customers.
Uber noted that a minimum fare applies to all trips and that the fare may also include tolls; taxes; and other fees, such as airport charges and dynamic pricing—also known as surge pricing. The purpose of dynamic pricing is to allow a fare to better reflect the underlying market forces of supply and demand at a particular time within a particular location. For example, if the number of customers requesting trips exceeds the number of drivers available at a specific time within a particular region, the fare is increased to reflect this imbalance and to incentivise others to provide their services.
Uber stated that drivers designate the bank account into which they would like their earnings delivered. The firm noted that these payments are either made weekly or instantly, at the election of the driver, and that drivers can also access information, via their Uber application, on the amount they have earned.
Uber commissioned AlphaBeta to prepare a report analysing its Australian driver network of around 60 000 drivers. The report found that, in Sydney, the average Uber driver was receiving $29.46 per hour after paying Uber's fee. This did not include their costs, which Uber estimated to be around $8.46 an hour, leaving the average Sydney driver with around $21 an hour.
The Transport Workers' Union (TWU) submitted that, based on survey data, rideshare workers reported average gross earnings of $23 per hour before taxes and other deductions. It stated that this was 'well below' the Australian national minimum wage of $24.80 for casual workers.
The TWU also highlighted that, after taking into account expenses such as vehicle costs; phone costs; and protective equipment costs, the effective hourly rate was substantially lower. It concluded that rideshare drivers are amongst the lowest paid workers in the country, effectively earning, on average, only $12.85 per hour.
Notwithstanding the TWU's research, Uber claimed that its own data indicated that, over a fortnight, more than 98 per cent of drivers and delivery people are earning at least the minimum wage, after costs, for the time they spend driving or delivering.
Ola is an Indian‑based ridesharing company which launched in Australia in February 2018, and now operates nationally across Australia. The Head of Business Excellence and Legal within Australia and New Zealand, Ms Ann Tan, noted that the firm currently has approximately 75 000 drivers registered on its digital platform.
Workforce model and worker earnings
Similar to other platforms in the sector, Ola engages its drivers as independent contractors. It stated that internal research showed that approximately 75 per cent of these drivers operate part time, and that 'the whole reason for them driving for rideshare is because they are looking for permanent jobs, they are between jobs, they are students or they are looking for part‑time work'.
Ola submitted to the inquiry that it places no requirements on its drivers to maintain shifts, log in at specific times, or work any specific hours; it only expects its drivers to pick up their passengers and drop them off, and there are no negative consequences for a driver rejecting a trip on the platform.
In her evidence to the committee, Ms Tan stated that Ola currently takes a 15 per cent commission on fares undertaken, and that its drivers currently earn approximately $21 per hour, after costs, from its platform. Ms Tan noted that the 15 per cent commission was 'significantly lower' than the incumbent, Uber, and that it reflected the firm's 'focus on drivers'.
Ms Tan noted that Ola previously provided its workers with accident insurance; however, due to the financial impact of the COVID‑19 pandemic, it stopped providing this cover in 2020. Ms Tan stated that the organisation is currently reviewing its insurance requirements for the 2021–22 financial year.
Overview of platform-based food delivery services
Food delivery services are now widely utilised in Australia and are offered by numerous online platforms such as Deliveroo, Uber Eats, and Menulog. Prior to their emergence, home delivery was not as commonplace as it is today, and those food vendors who chose to deliver usually relied on their own delivery infrastructure and workforces.
The introduction of these digital platforms materially increased the number of food outlets offering home delivery, including those who had previously focused on providing dine-in services only, and dramatically expanded the food options available to consumers within their own homes. For their service, platforms commonly charge their food vendor partners 'on‑boarding' or 'activation’ fees, combined with a per delivery or percentage fee.
Although one platform, Menulog, recently announced its intention to explore transitioning to an employment model in Australia, based on its experience operating a similar model in Europe, food delivery platforms have historically not employed their delivery workers in Australia.
Similar to rideshare workers, delivery workers may choose when, and if, to log in to a particular platform. Once a worker accepts a job, they travel to the particular food vendor, collect the customer's order, and deliver it to the requested address.
Although the platforms claim that they do not restrict their workers from utilising multiple platforms simultaneously, evidence provided by a driver, Mr Assad Manzoor, suggested this may not be the case. He said:
I was doing multiple jobs once. I went to a restaurant and I got orders for the restaurant on two different apps, for the same place. They ended up calling my phone and their words were, 'You're not allowed to work on any other platform while you're working on our platform.'
During the Victorian inquiry, Domino’s Pizza estimated that the costs associated with non-employee platform workers were about half that of its award paid employee, excluding penalties. Similarly, Marketing4Restaurants estimated that platforms were about one third cheaper than in-house delivery because they did not provide hourly rates, leave and other entitlements, and there was no minimum engagement that workers need to be paid.
In relation to earnings and income, food delivery platforms, including Uber Eats, maintain that the majority of their 'delivery partners' do not rely on the income and that it is 'supplementary'.
However, the Centre for Future Work at the Australia Institute analysed Uber's workforce report, undertaken by Accenture, and found the survey commissioned for the report 'did not ask that question', only asking about motives for earning money. Accenture then classified as 'supplementary motives' motives including 'saving for a holiday' and 'getting "extra cash to help make ends meet"'. It also classified anyone delivering for 'relatively few weekly hours' as someone doing it for 'supplementary reasons'.
The Centre for Future Work contended that 'few' people would consider money used to 'make ends meet' to be '"supplementary" in any sense of the word'. Later in the report, the Centre for Future Work noted, Accenture states that 57 per cent of Uber Eats workers reported their earnings from the platform were 'essential'.
The Centre for Future Work concluded that it is highly likely that most Uber Eats workers have other jobs, otherwise 'it would not be possible for them to survive' on the low rates provided. However:
Whether the funds are used to buy food and pay rent, or save for a holiday or some other 'luxury', has no bearing on the value of the work performed, and should not affect the level of compensation. The arguments of Uber Eats and other platforms that their workers perform these jobs for ‘extras’ is a self-evident attempt to evade responsibility for the poverty experienced by many of its workers. It has no justification in economic theory, nor in morality.
Mr Bernie Smith, from the Shop, Distributive and Allied Employees Association, commented:
It's not that people aren't reliant on [income from gig work]; it's that people are reliant on stitching together two, three and sometimes even four jobs or workplaces to get a living wage of any sort. To really address insecure work you also have to address the capacity to have one job if that's what you want, rather than having to stitch together three or four in an insecure work environment.
A survey of on‑demand food delivery riders undertaken in 2019 by the Victorian Trades Hall Council showed that:
participants were predominantly young men from culturally and linguistically diverse backgrounds;
participants were, on average, 26 years old, and that two thirds were under the age of 30;
food delivery is male-dominated, with 90 per cent of participants identifying as male;
forty per cent of participants listed a preferred language other than English; and
only one in ten workers were Australian citizens, with the vast majority (80 per cent) being temporary visa holders, and two thirds international students.
The Centre for Future Work submitted that Uber's own report on the demographics of its workforce 'raises major concerns about its ethical and legal practices'. The survey found that 29 per cent of respondents 'cited visa restrictions as the reason they could not find alternative work'. The Centre for Future Work said this may mean those workers 'do not have permission to work in Australia', or that they are 'international students who wish to work more than the 40 hours per fortnight they have traditionally been limited under normal student visas'.
In another part of the Accenture report, it states that 77 per cent of Uber Eats workers 'could not qualify for government income support during the COVID‑19 pandemic', with 65 per cent of those citing 'visa status as the reason'. The Centre for Future Work submitted this suggests that 'a much higher proportion (perhaps half) of Uber Eats' workforce may actually be ineligible to work (or work that many hours) in Australia'.
A survey of food delivery platforms
Uber Eats launched in 2016 and now operates across 36 cities. It partners with thousands of restaurants around Australia, from local small businesses to large international chains. In 2019, delivery platforms were estimated to have added 80 million deliveries to the restaurant economy, while also improving awareness of independent food providers.
Prior to the COVID-19 pandemic, food delivery coordinated via online platforms, such as Uber Eats, accounted for approximately 5.6 per cent, or $2.6 billion, of restaurant trade. Uber submitted that, in the absence of online platforms, 70 per cent of this spend would not have otherwise been spent in restaurants.
Uber Eats offers its restaurant partners three service delivery options:
click and collect in‑store;
the utilisation of the partner's existing delivery staff; and
the utilisation of Uber Eats delivery workers.
Workforce model and worker earnings
For food delivery workers operating on the Uber Eats platform, fare amounts include a base amount, a surge or promotion amount, if applicable, and, in some circumstances, a trip supplement. The base amount reflects estimated delivery time, distance, and whether the trip has multiple pick‑up and drop‑off points. The supplement amount may apply when there are higher than usual estimated traffic conditions and wait times at the pick‑up location, as well as areas with limited availability of delivery workers or unusual delivery demand.
Uber indicated that research undertaken by Accenture, based on data from 6.9 million deliveries in Sydney, found delivery people earned an average of $21.55 per hour after costs over peak meal times from Uber earnings.
The TWU submitted that, based on survey data, food delivery workers reported average gross earnings of $17.11 per hour before taxes and other deductions—less than the national minimum wage for casual workers of $24.80. Similar to its evidence for rideshare workers, the TWU highlighted that after taking expenses into account the effective hourly rate was substantially lower. It concluded that food delivery drivers are amongst the lowest paid workers in the country, effectively earning, on average, only $10.42 per hour.
Analysis by the Centre for Future Work of data provided in Accenture's report on Uber Eats suggests:
… that Uber Eats workers, in general, are terribly underutilised when they are on the job. The report does not reveal how many delivery jobs are assigned to a typical worker, but this can be imputed from various other statistics in the study. Sharing 6.9 million deliveries among 9,389 drivers over a 22-week period implies an average rate of assigned delivery of under 34 deliveries per worker per week. Based on the distribution of hours of work data also contained in the report (p. 11), this implies an average of just 1.7 deliveries per hour per worker. Uber Eats does not divulge its schedule of payments to delivery workers: they are paid a set fee per delivery, topped up by additional revenue tied to distance travelled and other factors. It is common for fees to equal $6-8 per delivery.
The Centre for Future Work submitted that 'the incidence of people working full-time hours [on the Uber Eats platform] is in fact much higher' than Uber has suggested:
Only 21% of its workers in Sydney during the period covered by the data worked 31 or more hours per week (the company’s definition of full-time). But those workers accounted for about half of all Uber Eats deliveries in that period.
The Centre for Future Work also provided detailed analysis of Uber's calculations around delivery partner expenses and concluded that:
Uber Eats' description of the revenue and expenses associated with its food delivery work is inconsistent with accepted accounting and tax practices, and should be discounted. Correcting for more accurate measures of expenses, and considering the full range of hours worked (not just those in the busiest city at the busiest times), there is no doubt that Uber Eats' workers earn far less than [statutory minimum wages].
Deliveroo was founded in the United Kingdom in 2013 and launched in the Australian market in November 2015. It currently has over 8000 workers across Australia and partners with more than 13 000 food vendors across 15 cities, including capital cities such as Melbourne; Sydney; and Brisbane, as well as regional cities such as Newcastle; Ballarat; and Cairns. Deliveroo noted that its restaurant partners range from small restaurants and cafes, to catering businesses, franchises, and chains.
Deliveroo claimed that, in 2018, it underpinned the creation of $313 million in additional revenue for the Australian restaurant market and supported the generation of $452 million in revenue for the Australian economy.
In his evidence to the committee, the Chief Executive Officer of Deliveroo in Australia, Mr Ed McManus, stated that the chosen modes of delivery by its workers results in an approximate 50/50 split between motorcycles and cars, with only a small percentage using bicycles.
Workforce model and worker earnings
Deliveroo highlighted for the committee a number of key features which it believes it provides its workers:
There are no obligations to work at certain times, or for a set number of hours, or at all.
There is no obligation for workers to undertake the work personally, and they can appoint delegates at their discretion.
There is no restriction on working for multiple companies across multiple platforms, even on a concurrent basis.
There are no fixed work arrangements; that is, workers pick their own times to go online and be available for delivery.
Workers are free to accept or reject orders offered to them, and can also revoke a prior acceptance of an order at any time.
Workers choose where they work, what vehicle they use to perform their work, the routes they take to complete their deliveries, and what clothes and safety equipment they wear.
Deliveroo stated that it currently provides its workers with accident insurance, and that this protection provides similar coverage to the various state-based WorkCover schemes.
Although Deliveroo does not have visibility of the payments received by its workers when they utilise other platforms, Mr McManus stated to the committee that, during March 2021, the average earnings of its workers across all times, that is not only peak times, was $23.40 per hour pre‑costs. During peak times, Mr McManus submitted that the figure was 'well over $30'.
Menulog was founded in Sydney in 2006 to primarily provide delivery services to restaurants. In 2018 the business launched its own delivery service, and currently connects more than 2.7 million active customers with almost 20 000 local restaurants via its application and website.
Workforce model and worker earnings
Menulog's workers are currently engaged as independent contractors; however, Menulog has expressed its desire to move to an employment model in Australia and has announced its intention to launch a trial in Sydney this calendar year. This is further discussion in Chapter 6.
Like other delivery platforms, Menulog currently pays its Australian workers by the order and not by the hour. In reaching an estimation of the hourly rate of remuneration, Menulog stated that, based on its European operations where employees are exclusively employed, workers fulfil approximately two orders per hour. Combined with an average pay per order of $11 to $12 in Australia, Menulog estimated that the average pay ranges from $22 to $24 per hour.
Overview of platform-based parcel delivery services
On-demand work in the transport sector has, until recently, mainly been limited to food delivery and passenger transport; however, this changed in February 2020 when Amazon introduced its 'last-mile' parcel delivery service in Australia: Amazon Flex.
Prior to the introduction of Amazon Flex in Australia, Amazon commonly outsourced its last-mile delivery work to established transport operators, such as Australia Post; CEVA; Toll; and Fastway.
The TWU noted that, although Amazon Flex is relatively new in Australia, it has been operating in the United States since 2015. It submitted that these United States operations have been 'the centre of much scrutiny over poor working conditions for drivers and [their] broader effects on the transport sector'.
Overview of Amazon Flex
Amazon Flex forms part of Amazon's delivery network, and allows individual drivers to deliver Amazon packages. Amazon described its Amazon Flex offering as follows:
Amazon Flex is designed to provide individuals with supplementary earning opportunities and the flexibility to determine their own schedule by choosing blocks based on their availability … the majority of our delivery partners tell us that their motivation for joining Amazon Flex is the flexibility to choose their own schedule, as well as a desire to supplement their primary income.
While difficult to determine the precise number of people working through Amazon Flex, Amazon stated that, 'over the last three months [March to May 2021] the weekly average number of delivery partners who completed a block was 1 600'. Many more signed up to Amazon Flex but were not 'active users' of the platform.
Amazon submitted that drivers can select the date; time; and location of a 'delivery block', and then collect the associated Amazon packages from a delivery station. Amazon stated that workers are paid per delivery block, rather than per hour or per delivery.
Amazon noted that, although it estimates the time a delivery block will take to complete, it leaves it up to the individual driver to determine the route they will use. It also submitted that delivery workers are free to accept delivery blocks at times that suit them, and that workers know the minimum amount they will be paid, and the length of the delivery block, prior to accepting the work.
Amazon stated that it has 'stringent safety policies in place to ensure the safety of Amazon Flex delivery partners, customers and the community'. In support of this, it submitted that it sets limits on weight and package dimensions, and that workers are able to decline a package when they feel that it would compromise their safety. Amazon highlighted in its submission that it also implemented additional health and safety procedures during COVID‑19, such as social distancing at delivery stations; contactless deliveries for customers; and the provision of masks and hand sanitizer.
In contrast to the above, the TWU claimed in its submission that Amazon Flex has dangerously undermined safety standards, and indicated that numerous drivers have reported:
regularly overloading vehicles (commonly personal cars) to a point where driving vision is dangerously obstructed;
delivering packages which require two or more people to carry and transport;
feeling pressured to engage in dangerous road practices in order to complete an unrealistic number of deliveries in short windows; and
failing to provide sufficient training to workers, with all training limited to a short two minute training video covering safety, manual handling, and use of the Amazon Flex application prior to the commencement of work.
Workforce model and worker earnings
The TWU noted that Amazon Flex engages its drivers as independent contractors and, hence, they are not afforded the legal protections provided to other couriers in the transport sector. The TWU also submitted that, under this arrangement, these workers do not have access to penalty rates, sick leave, minimum rates of pay, superannuation, and various other working rights and protections.
The TWU claimed that since the introduction of Amazon Flex in Australia, Amazon has engaged in the underpayment of workers below national minimum standards. It stated that drivers have reported earning between $10 and $15 per hour, on average, after costs—below the minimum wage. It highlighted that this was similar to Amazon's United States operations where analyst figures indicated that, in 2018, the average Amazon Flex driver earned $5 to $11 USD per hour, after on the job expenses were deducted—also below the minimum wage.
At a public hearing, Amazon confirmed that drivers provide their own vehicles and must hold their own insurance policies, including third-party insurance and public liability insurance, 'in order to deliver on behalf of Amazon Flex'. However, Mr Michael Cooley, Director of Public Policy Australia and New Zealand, said Amazon also has insurance policies 'which match the cover that they have': 'So, to the extent that there is an accident or they are driving on behalf of Amazon Flex, they claim under our policies'.
Asked what workers' compensation coverage a driver would have if injured delivering parcels for Amazon Flex, Mr Cooley said:
They're not workers; they're independent contractors. As I mentioned, they have their insurance policy. So if they have a comprehensive insurance policy then we will also have the same matching policy, and they would claim under our policy to cover injury.
In relation to earnings for drivers delivering for Amazon Flex, Mr Cooley said the rates paid by Amazon in NSW and Victoria per 'delivery block' were set according to the 'owner-driver regulations'. Mr Cooley said, 'we comply with those regulations':
There's a minimum pay of $108 per delivery block; we pay in blocks. The average block duration is four hours so it's $108 for a four-hour block, which is slightly above the rates in the owner-driver regulations.
Amazon does not pay delivery partners for their travel time to and from the delivery centre, though it does pay for the time to return any undelivered parcels.
Mr Cooley also said that Amazon provides a mechanism for drivers to 'identify' issues that have occurred that have prevented them delivering parcels within the allocated time, and Amazon will review the claim and may compensate the driver:
Occasionally, however, they may struggle to find a particular address or a business may be closed, and that can take up some extra time, or there's been road congestion or an accident et cetera. So from time to time people do go over the block, even though they were trying to complete the delivery of the parcels in as short a period of time as possible. .. Where it's pretty clear that there was traffic or an accident or unforeseen circumstances then we will in fact compensate the driver for the additional time they took to deliver that route.
Mr Cooley was asked how much the drivers earn per hour and said Amazon does not pay by the hour, as it is 'entirely a matter for the driver as to how they actually undertake the deliveries on behalf of Amazon Flex':
For instance, if the driver were to go out in the morning to a delivery station, which is where they go to pick up parcels, they load the vehicle and, say they turned up at the delivery station at 9 am, they have until 10 pm that night to complete the deliveries. ... What we find in practice is that 90 per cent of drivers will complete the delivery in under the delivery block times.
In practice, Mr Cooley said, because of 'surge pricing' Amazon actually pays 'on average $120 for a four-hour block', which Mr Cooley said would equate to an hourly rate of $29.84, if you divide it by four.
It was put to Mr Cooley that this rate does not include any superannuation, sick leave or other leave, and that drivers must pay for their own insurances and the upkeep of their vehicles with these earnings, and that when you factor those things in, the rate is under the minimum wage. Mr Cooley responded:
As I mentioned, we do provide insurance and drivers can claim under our insurance policies if there is a problem. We do also factor into our calculations things like the insurance that they pay, vehicle cost, vehicle depreciation, repairs and servicing, the cost of a driver's licence, rego, mobile phones and data costs. We factor those costs in as part of the calculation of our rates which, I'm assuming, the owner-driver regulations—which we comply with—also do. On that basis we are paying well above the rates which you have referred to, and we are paying well above the minimum wage per hour.
National Secretary of the TWU, Mr Michael Kaine said:
The minimum casual wage in this country is something a bit beyond $24 an hour. That means that these workers are being paid something less than $3 an hour to maintain their vehicles, get their insurances, pay their superannuation and take care of their annual leave. That demonstrates that this is an unfair contract. An unfair contract is against the law in Australia.
Amazon was asked to comment on reports that officials from the Transport Workers Union had been met by police, called by Amazon staff, when visiting an Amazon Flex distribution centre in Minchinbury, in Sydney, in May 2020, despite providing 'prior notice and bringing right-of-entry cards to gain access to the site'.
Mr Cooley said he was 'not aware' of the incident, and that Amazon respects the right of its employees 'to join or not to join unions without fear of retaliation, intimidation or harassment':
We also have an open-door policy that encourages our staff to bring their comments, questions and concerns directly to their management team. Unions are welcome to enter our sites in accordance with their legal entitlements in Australia, which they exercise on a regular basis. In the last 12 months, we have had dozens of unions lawfully visit our sites, and they are welcome to do so when they do so in accordance with their legal entitlements.
The TWU told the committee it had asked a number of Amazon Flex delivery drivers to come and speak give evidence before the committee, but they were not prepared to do so, because 'they fear that their livelihoods will be cut and stripped away with no recourse'.
Mr Kaine said that, after the TWU's visit to Amazon Flex's 'new distribution centre in Minchinbury' in 2020 'to inspect conditions', Amazon 'indiscriminately' terminated 'dozens of the Flex workers at its distribution centre':
People received a notification in the morning saying they didn't have a job anymore. It wasn't lost on those drivers that those sackings took place only days after many had spoken with the TWU.
Overview of platform-based disability care and aged care services
There are currently almost one million ageing Australians who require domestic care and support to allow them to continue living independently in their own home, and this number is expected to continue to grow in the future. Further, it is expected that the National Disability Insurance Scheme (NDIS), once fully rolled out, will support 530 000 people living with disability through individualised funding packages.
With the aim of improving outcomes, the Australian Government has implemented a number of reforms across both the disability care and aged care sectors in the last seven years which have shifted funding, choice, and control from large care providers to consumers.
These reforms, in conjunction with advances in technology, are disrupting the industry and creating challenges for incumbent organisations which are being forced to shift their approach from competing for grant funding provided by the government, to compete for each consumer on the basis of choice, flexibility, quality, and value.
Demand across the care sector is driven by individuals who receive funding through the NDIS and via home care packages, and workers providing services within the sector include aged and disability support workers, nurses, personal care workers, and allied health practitioners.
The need for personal care services is expected to grow as the population ages and more people choose to live independently and receive care in their own homes. Given this, the aged and disability support sector is expected to grow to 245 000 workers by 2023, an increase of almost 40 per cent, or 69 200 workers, since 2018.
Disability care and the National Disability Insurance Scheme
The NDIS commenced in 2013 following an inquiry undertaken by the Productivity Commission which found that families and individuals are unable to adequately prepare for the risks and financial impacts of significant disability. It also examined the existing system and found that it was unfair, underfunded, fragmented, and inefficient, and gave people little choice and no certainty of support.
Under the NDIS, the Australian Government provides financial support via funded support packages provided to individual participants in the scheme based on their needs. This approach allows these individuals to directly engage and manage their own disability support services. Alternatively, they can engage an intermediary to manage their budget and find service providers on their behalf, or have the National Disability Insurance Agency pay the provider directly in accordance with the participant's plan.
Aged care and home care packages
The Australian Government utilises home care packages in the aged care sector to allow for consumer‑directed care. Depending on the level of home care package a recipient receives, they are provided with assistance across a range of services which aim to keep them healthy and independent; safe in their own home; and connected to their community.
These packages may be used to fund personal care, such as showering and grooming; nursing; therapy services; meal preparation; home maintenance and modifications; and other domestic assistance. Home care package recipients work with their chosen service provider to identify their care needs and decide how to best utilise their package funding.
Emergence of platforms
In recent years, specialised platforms have emerged, such as Mable and Hireup, which have enabled care recipients to directly engage service providers. Through these platforms, care recipients can negotiate the type, quantity, and schedule of support services they require.
In her evidence to the committee, the Secretary of the Australian Services Union, Ms Natalie Lang, noted the rise of platform‑based providers and the workforce models they utilise. Specifically she said:
We have seen the rise of platform based providers in the NDIS. Between them they also have a difference in employment models. Some organisations use the contractor model, where the workers on those platforms are deemed to be self-employed by the organisation they go on.
There are also platform models which use an employment model. Again, though, we are seeing there a significantly casual employment model that is being used, not a permanent model …
The Victorian inquiry highlighted that there were 'legitimate concerns' about the impact of platforms on the care services sector, particularly in relation to health and safety, insurance, unpaid work, and the training needs of the workforce.
Mable and Hireup provided the committee with contrasting perspectives on the best workforce approach for the sector, and highlighted the key differences between employment‑based versus contractor‑based models. In its submission to the inquiry, Hireup was highly critical of the contractor‑based model, and stated the following:
… critically, growing alongside the NDIS are two versions of this disruption playing out in the disability workforce. There is one version in which support workers are employees with guarantees of wages, entitlements, conditions, and protection from liability. And there’s a second version in which workers are set up as individual business entities: independent contractors to perform the same work as the first version but without the same guarantee of wages, entitlements, conditions or protection from liability.
In support of the above, Hireup highlighted the key advantages, to both workers and governments, of the employment model. These benefits are shown in Figure 3.1 below.
Figure 3.1: Independent contractor compared to employee
Source: Hireup, Submission 23, p. 16.
Care worker demographics and trends
Inquiry participants highlighted to the committee that authoritative and reliable data about the disability support workforce is difficult to obtain, and that what is currently available is generally of low quality or based on self‑selected surveys, which may be unrepresentative of the broader population. Hireup submitted that:
… [a]s a result, there are challenges to clearly demonstrating the changing dynamics of the disability workforce. That, in itself, is a risk that governments should address urgently.
Notwithstanding this lack of clarity around the workforce, Hireup argued that there has been a rapid rise in the number of contractor platforms and contracted support workers undertaking work through them. In support of this, it noted that the number of contracted workers at one large platform more than doubled from August 2019 to August 2020, and that at a smaller platform the number of contracted workers increased by nearly 50 per cent over a seven month period from February 2020. These large increases are also reflected in the number of contractor platforms in operation, which has increased from one in 2014 to approximately eight currently.
Data prepared by the Australian Bureau of Statistics also indicated that between 2014 and 2018, the number of independent contractors in the category of healthcare and social assistance increased by 29 per cent, from 70 700 to 91 700, compared to an increase of only 19 per cent in the overall sectoral workforce.
Hireup concluded that this indicated the likelihood of a much faster rate of growth already occurring in work being conducted through contracting platforms than through care services provided by employer organisations. It submitted that this rapid change to the nature of the engagement of support workers could present a number of risks to the disability sector, including:
Changing the nature of the workforce away from organised, supervised, employment-based systems, to a more fragmented, unregulated workforce where individuals accept liabilities with few external safeguards.
Potential for lower wages for support workers operating without minimum award wage guarantees, and from a position of bargaining weakness.
Growing liabilities on people with disability engaging their own workers, including the potential to be deemed as a worker’s direct employer.
Reduced safety and quality compliance requirements.
Development of a two-tier NDIS, where one group of organisations incurs the costs of employment and compliance with a range of safety and quality standards, and another operates largely without these costs and provides fewer protections for workers and clients.
A survey of disability and aged care platforms
Overview of Mable
Mable is a peer-to-peer online platform which aims to connect those who are ageing, or living with disability, with 'independent care and support providers, nurses and therapists, in local communities around Australia'.
Mable was originally launched in 2014 under the trading name 'Better Caring', before being rebranded in 2018. In his evidence to the committee, the Chief Executive Officer of Mable, Mr Peter Scutt, articulated the purpose of the firm's online platform:
Mable is an online marketplace that's connecting older Australians and people with a disability with independent service providers in their local community. They could be providing social support and domestic assistance, personal care, nursing services, allied health services or other services that respond to an individual's needs. It is a model that reflects the unique needs of aged care at home and disability support where people are looking for solutions that are person centred and respond to their individual needs, preferences, abilities and interests where choice and flexibility are critically important, where relationships really underpin people's ability to live independently and to overcome sort of loneliness and disconnection.
Mable claimed that utilisation of its platform reduces the usual overhead costs incurred by larger providers, allowing consumers to access up to double the hours of care and support they receive from their funding packages. Mable stated that this has positively impacted the lives of those who utilise its platform, increasing their quality of life and the likelihood that they can remain in their homes for longer.
Workforce model and earnings
In its submission to the inquiry, Mable emphasised that its platform offering does not fit the 'on‑demand' or 'gig economy' model because it does not facilitate the provision of tasked‑based or on‑demand work. Rather Mable contended that its platform 'facilitates ongoing relationships of mutual choice'.
Mable stated that service providers on its platform can:
disclose their level of skills, experience, and qualifications;
define the geographic locations that they are prepared to travel to;
set the days of the week, and hours of the day, that they are available for; and
set their rate, or rates, that they are prepared to provide their services at.
Service providers are required to sign up and build their own profiles on the platform, which are then reviewed by Mable prior to publication. Individuals seeking services are able to view published profiles, and can utilise the platform's search functionality and post jobs. Once a potential match is found, the individuals involved can engage via audio or video chat, or meet up in person, to determine whether to proceed.
Mr Scutt emphasised the agnostic nature of the platform, noting that the particular arrangements through which people engage via its platform are determined by those individuals involved. Specifically he said:
How people engage via the platform is agnostic. In many cases, they engage as an independent contractor relationship, but we also facilitate the parties' engagement in an employment relationship.
Furthermore, Mable stated that it:
does not set the market for services;
does not oblige service providers to adjust their rates to meet the rates offered by other service providers;
does not penalise service providers in circumstances of non-availability;
does not require exclusivity from service providers and, hence, allows them to make their services available across multiple platforms; and
allows employment relationships with employers in circumstances where the provision of services via Mable's platform does not conflict with any obligation under a contract of employment.
Mable advised the Victorian inquiry that the average hourly rate, after service fees were paid, was between $32 and $33 per hour. Although noting that hourly wages vary materially with qualification levels, it submitted that the lowest wage payable for work mediated through its platform was $23.50 per hour.
Since that time, Mable has raised the minimum rate a service provider can offer their services for on the Mable platform to $25.00 an hour 'for active hours'. Mable submitted that this is 'designed to afford a layer of protection for independent workers to ensure they do not earn less than minimum wage after platform fees and superannuation'.
Notwithstanding the above, the Health and Community Services Union (HACSU) submitted to the Victorian inquiry that Mable’s minimum rate was below the legal minimum wage in the sector of $26.22 per hour for a level one casual home care worker. The HACSU also indicated that, after incorporating its service fee and accounting for the absence of superannuation and casual loadings, the average wage was below award rates applicable to nursing or personal carers.
On notice Mable provided further information about how its model and its minimum rate work in practice, saying:
Mable does not set rates. Mable does not attempt to restrict when the services are available and how they might be structured (eg. hourly or fixed rates, delivery of certain services etc). These are matters for the Service Provider. … It is up to the small business Service Provider to determine whether they want to charge a higher amount for work outside of Monday to Friday. … It is the Service Providers that determine how they wish to present to the market and the terms and conditions upon which they are prepared to provide their services and the price… not Mable.
Mable submitted that it relies 'upon each and every Service Provider' to individually assess 'the amount and/or hourly rate or fixed price that they need to charge customers or clients'. Mable argued that the service providers engaged through its platform are 'sophisticated and commercially-minded individuals who understand their level of expenses and, as part of that assessment, they also have complete transparency on the amounts that are charged by Mable'.
The Health Services Union expressed a different view, saying:
… the minimum rate allowed by Mable on its platform (less the 10% service fee) undercuts the legal minimum wage for a casual employee receiving the 9.5% superannuation guarantee by $4.66 per hour or 1/5th of the legal minimum wage. Whilst on-demand platforms such as Mable would argue it is the responsibility of individual workers to negotiate a rate with a service user that reflects their own perceived value, HACSU would submit Mable exerts a significant degree of control over support workers using its platform and that they ought to be classified as employees rather than independent contractors.
Professor Paula McDonald, from the Queensland University of Technology Business School, reported on findings of research that that suggests, while care workers engaged through platforms like Mable are generally 'self-employed', 'the way they're self-employed is very precarious', and lacks autonomy. Professor McDonald said these care workers are 'very much beholden to the platform itself and its technological functions in order to be able to access work, and the work that is done, especially on aged-care platforms, is very fragmented'.
In relation to earnings, Professor McDonald said:
They don't get paid for the time in which to travel between their stints of two- or three-hour work. They don't get paid to go and meet a prospective employer to find out whether that arrangement is suitable. There's all of this downtime which is unpaid. They don't get paid to keep their profile up to date or to respond to potential jobs when they pop up on the app.
Overview of Hireup
Hireup is an online platform provider of disability support services. It operates nationally across Australia and is a registered provider with the NDIS. Through its online platform, Hireup aims to provide people with disability the tools to find, hire, and manage support workers who fit their needs and share their interests.
Hireup began delivering its services in 2015 and employs its workforce on a casual basis under the Social Community, Home Care and Disability Services Award 2010 (SCHADS). The submission of the Australian Services Union noted that Hireup's casual support workers are classified under the lower-paid home care stream of the SCHADS Award, rather than being properly classified under the Social and Community Services Stream, which would see Hireup's workers earn a higher rate of pay.
Hireup argued that it is not a 'gig economy' business, and that the services it offers are 'ongoing, relationship-based engagements between [its] workers and people with disability'. More generally, it considers that disability support work is not well-suited to the classification of 'gig economy', which implies brief, one‑off, engagements for a specific task.
Hireup's Chief Executive Officer, Mr Jordan O'Reilly, stated that the typical relationship through his firm lasts for nine months or longer, and that a person is commonly engaging multiple times a week for many months at a time.
Workforce model and earnings
Hireup stated that it employs all its support workers, and that the majority of people who work for it are disability support workers who provide their services within, or from, private homes. Given this employment relationship, Hireup noted in its submission that it takes responsibility for ensuring its workers have access to 'healthy working conditions and employee benefits'.
Evidence provided by Hireup to the Victorian inquiry indicated that its onboarding process involved referee checks; qualifications checks; police checks; working with children and vulnerable people checks; and a review of an online application form detailing a worker’s prior experience.
As an online platform operating within the digital economy, Hireup believes that its employment model is unique, and highlighted that the key distinction between itself and its competitors is that it is a platform provider and not a platform marketplace; that is, its workforce is engaged on an employment basis as opposed to competitor platforms that engage their workforces as independent contractors.
Hireup currently has more than 6000 support workers engaged in working support shifts and, since 2015, has provided more than seven million hours of support to its clients. Reflecting on its workforce model, Mr O'Reilly stated that:
… we [Hireup] have set up a platform that engages workers as employees, as casual employees to begin with, to provide those services to people with disabilities and their families. We pay by an award, which we're really proud of. We pay superannuation and we pay tax. We provide all of the entitlements and protections that any employee in any other organisation can expect.
The services are directed by the client. It's paid by the hour. We think this has all the hallmarks of traditional employment.
In her evidence to the committee, the Senior Director of Service at Hireup, Ms Jessica Timmins, stated that Hireup has one classification for all its employees and that, for weekday shifts, the starting rate of pay is $31.52 an hour. Ms Timmins advised that the organisation pays superannuation and penalty rates in addition to this base rate.
Notwithstanding this base rate, Mr O'Reilly noted that, although the starting rate is $31.52, the average rate paid to the firm's employees, taking into account evening, weekend, and public holiday shifts, and superannuation payments, is approximately $41 per hour.
This chapter provided an introduction to the major platforms; their workforce models; and worker earnings, with a particular focus on those platforms operating within the rideshare, food delivery, parcel delivery, and care services sectors.
The chapter also discussed the different approaches that platforms take to engage their workers, and highlighted the contested viewpoints on which model is most appropriate. It also provided information on worker earnings and indicated that this is also a contested area between the platform providers, unions, and workers.
The next chapter discusses the impacts of on‑demand and platform work in Australia, with a focus on the pros and cons for workers and businesses; the effects on individuals, families, and communities; and the broader economic effects.
The committee's views on the merits of various workforce models, the implications of the platforms' contract provisions, and earnings for platform workers, are canvassed in the following chapters.