This post is a short version of an article written for Jacobin Magazine by Simon Archer and Joshua Mandryk. This version has been updated since the tabling of Bill 88, Working for Workers Act, 2022. The original article is available here. We gratefully acknowledge Jacobin’s permission to post here.
Uber is the best-known name in precarious employment world-wide. It has a business model that is predicated on externalizing the costs of its business on to precarious workers. It also knows precarious workers lack access to benefits, like health and dental, and want them. So Uber has proposed the creation of pooled benefit programs for its drivers as part of what it has dubbed Flexible Work+. In exchange, Uber wants to create special laws for its workers that treat drivers as second class workers, seeking to deprive them of the basic rights all employees enjoy in Canada. This bait and switch is central to Uber’s portable benefits proposal. In February 2022, the Ontario Government took the bait, and announced the creation of an advisory panel to research options for delivering these benefits. The labour movement is notably absent from the advisory panel’s recently appointed members.
On February 28, 2022 the Ontario Government introduced Bill 88. That Bill is now headed to committee. If passed, Bill 88 would enact the Digital Platform Workers’ Rights Act, 2022 that would apply to “workers”, which it defines to mean “subject to the regulations, an individual who performs digital platform work and includes a person who was a worker.” The Digital Platform Workers’ Rights Act, 2022 provides these “workers” with protections that are lower than those employees are entitled to under the Employment Standards Act, 2000 (the “ESA”). In particular, the Digital Platform Workers’ Rights Act, 2022 provides for a minimum wage that only applies “for each work assignment performed by a worker”, and does not contain many other basic monetary protections found in the ESA. However, Bill 88 does not exempt platform workers from the ESA – and so platform workers can still assert their rights under the ESA and get the protections to which all employees are entitled.
There are many good critiques of the new gig workers’ bill, but that is not the focus of this post. The rest of this post considers Uber’s proposed portable benefits program.
In principle, a sectoral or portable benefits program for precarious workers is a good idea. Many Canadian workers already participate in them – for example in the construction industry, where building trades unions have bargained union-administered multi-employer pension and benefit plans designed to follow workers from employer to employer. Importantly, these benefits have only been made possible by significant union bargaining power and strong underlying legislative supports for broader-based bargaining. The same underlying conditions are not present in today’s platform-based gig economy, and we should not expect a scheme established at the behest of Uber to mirror the generous multi-employer benefits achieved in the unionized construction industry.
What are Flexible Work+ benefits?
We still have very little detail by which to evaluate Flexible Work+, but what we do know has the hallmarks of low-value individual account benefit schemes.
Its basic mechanism is to require contributions to a centralized fund by each worker, with a contribution by all eligible platform employers. When hours worked or contributions made reach a certain threshold (Uber proposes 20 hours of “engaged time”, which means perhaps up to 40 hours of actual work time) a worker becomes eligible to receive benefits. Workers can direct the credit in their account toward different benefit options, such as dental or vision benefits, an individual retirement savings account, or life insurance, or other benefits.
So, the first observation is that there is no “defined benefit” promised to workers in this scheme, there are only forced savings. Workers can decide on how these savings are allocated by choosing what benefits they wish to channel their funds into. The “flexibility” of the program is, presumably, the privilege that workers enjoy to make this choice. And yet everything depends on the level of contributions, the price of the benefits, and so forth. When you have no benefits, even small benefits are an improvement. But giving up your right to minimum wage, or vacation pay, or termination pay, or real benefits is a steep price to pay for it.
Second, the thresholds proposed by Uber essentially mean that only those putting in near full time hours will ever get access to benefits. In its own survey of Vancouver drivers during 2020-2021, Uber maintains that about half of Uber drivers work 15 hours or less a week, a further third 15-35 hours, and a final 20% of drivers work more than 35 hours a week. So, on its own numbers, more than half – perhaps as much as two thirds – of Uber drivers are not likely to qualify for benefits.
(The same report claims drivers earn $25-$35 per hour net of all costs. Other sources suggest that the average gross earnings vary significantly by location and time period and are almost always lower than Uber’s own glowing self-report suggest.)
This brings us back to the portable benefits plan. Assume a full-time driver earns $800 a week. If, say, 2.5% of weekly earnings are deducted for the benefits program, that driver would contribute $20 a week. That’s $1040 annually (at 52 weeks and no vacation). If Uber matched that (not at all certain), we might see a total account value of $2080 per year.
That might sound good, especially if you currently have no benefits. But that’s a maximum benefit amount, assuming 2.5% matched contributions by Uber, and full time hours worked.
And what is given up in exchange for this benefit? If Uber has its way, these would include minimum wage protection for all hours of work (not just “engaged time”), overtime protection, vacation and public holiday pay, reimbursement of work-related expenses to ensure real wages exceed these minimums, and termination pay protection.
How to put a value on all that? We can make educated guesses. In a recent case, a pizza franchise driver – a job similar to an Uber courier – asked to be classified as an employee and was fired. The employment standards officer determined that the driver was an employee. The minimum standards that were not paid to the driver were overtime pay, minimum wage, public holiday pay, vacation pay, and termination pay. When the cost of these items were tallied up, the total owed to the driver was $25,812 over about two years.
In another recent employment standards complaint involving an Uber Eats Courier, the Employment Standards Officer found that the courier was an employee and was owed $919.37 by Uber. Importantly, the Employment Standards Officer concluded that the courier was entitled to be paid for all of their hours logged on to the app. The Employment Standards Officer also found that the worker was entitled to vacation pay as part of their claim, although the vacation pay earned had not yet come due and so was not included in the $919.37 ordered to be paid. These amounts also do not include the amounts of employment insurance and Canada Pension Plan contributions that Uber would be required to make for the employee if they were found to be an employee for the purposes of those benefits. The difference between the value of these protections and the (admittedly hypothetical) Flexible Work+ account is obvious.
Uber itself pegs its cost of Flexible Work+ at about $40 million in Canada, for roughly 100,000 drivers. If Uber were to make required contributions to only the Canada Pension Plan and Employment Insurance, the cost is estimated by some at about $80 million per year.
So you can see Uber’s financial incentive in the portable benefit plan: it is less than half the cost of only some of the existing benefits all employees have a right to, and, if coupled with the legislative exemptions it seeks, it will help save Uber from paying basic compensation to drivers that significantly outstrip the cost of Flexible Work+.
The path forward
Just days following the tabling of Bill 88, leaks from the Ministry of Labour have emerged indicating that the Minister is considering “full employee status” for gig workers under the ESA.
Whatever becomes of Bill 88, it will not be the last word on the rights of platform-based gig workers in Ontario since it sidesteps the issue of employment status entirely.
For its part, we anticipate that Uber will continue to use the prospect of portable benefits as part of its package of proposed reforms to carve gig workers of these basic employment rights. A better approach, as advocated by gig workers and their allies in the labour movement, must involve full and equal protections under the ESA, Canada Pension Plan, and Employment Insurance Act. Further benefits for gig workers should be bargained on top of this floor of statutory protections, not used as a carrot to trade them away forever.
Bait and switch, Trojan horse, poison pill — whatever you call it, Uber’s proposal is a bad deal for workers.