Vector showing global city Person carrying boxes
Section 2

Platform work and social protection

Chapter Sections

  • Still small, but with huge disruptive potential
  • Accelerating age-old challenges
  • New implications

Platform work and social protection

Where does the platform economy fit into this already diverse picture?

The answer is complicated. There is no common definition, the terminology varies – to some, it is the gig economy; to others, the sharing economy – and different data sources have different ways of measuring it. Individuals doing this type of work may already appear within the formal employment data discussed above, including as temporary employees, part-time employees, agency workers or the self-employed. Or they may not – for example, if they have an employment contract and use platform work to top up their incomes.

Still small, but with huge disruptive potential

Although good data are rare, and definitions vary, a recent study commissioned by the European Parliament found that between 1% and 5% of the European adult population has engaged in at least one paid job through an online platform, and that in the US it was likely to be at least the lower figure.2 And a joint Institute for Labour Studies (IZA) and Centre for European Policy Studies (CEPS) report has used a literature review and its own analysis to put the figure between 0.05% and 6%.2

“If you look at the real figures, it’s still a marginal phenomenon,” says Professor Schoukens of the University of Leuven. “But it has the potential to grow.” Indeed, the CEPS-IZA study finds that the platform workforce in Europe has already been increasing faster than the overall labour force.3 That growth raises pressing questions about what modern social protection should look like.

Accelerating age-old challenges

According to the ILO’s Christina Behrendt, “a lot of the issues which appear as new [because of the platform economy] were already there but not as visible.”

Individuals working in the platform economy generally fall into one of the labour classifications for diverse forms of work, which already face longstanding social protection challenges. And debates about the employment status of platform workers, and therefore their access to different rights and social protections, are similar to those outside the platform economy. For example, one case that is frequently cited in relation to EU law surrounding platform workers involves a window salesman who worked on commission for a single firm between 1999 and 2012 – with no digital platform mediation.4

And history and existing frameworks could hold the key to addressing the challenges of platform work. The World Employment Confederation’s Denis Pennel believes that as the labour market sees more digital intermediation, with customer, employer, and intermediary platform all located in different places, the way that agency employment, for instance, develops social protection mechanisms will become increasingly relevant.

New implications

However, platform work does add some new complications for social protection. Matthew Taylor agrees that, while much of the substance is the same, “platforms change the scale and speed at which new business models can emerge and grow”. This will accelerate any shifts that are negative for social protection.

Professor Schoukens says that many social protection issues arising from the platform economy could be helped by “fine-tuning the existing rules”. He also says, however, that platform working demands answers to an important new question: with social protection under the remit of national governments, how should they assess appropriate contributions when worker, platform and client are in different countries?

A recent study of data from the freelancing platform Upwork and one of its predecessors oDesk finds that the vast majority of contracts between 2003 and 2014 were cross-border, with most originating in wealthier countries and carried out by workers in less developed ones. During those years, through that one site, US employers sent nearly $1 billion abroad, and Australian, British and Canadian employers more than $300 million in aggregate. Meanwhile, Indian workers earned $340 million and Filipinos $287 million.5 The numbers are significant, but whether this work has bolstered social protection arrangements for those involved remains to be seen.

In practice, however, these challenges add to an already difficult bundle of issues rather than creating a new field of concern. If the workers are self-employed, as is often assumed, then they would have the responsibility to arrange their own protection and insurances. “The platform economy is something new,” says Professor Mark Stuart, Professor of Human Resource Management and Employment Relations at the University of Leeds. “It’s something interesting. There is something happening, so it’s focusing people’s minds. But there is a bigger debate [to be had about social protection].”