Trade Unions, don’t get steamed up by the platform economy.

FNV, the largest trade union of the Netherlands, published the Dutch report titled ‘Riders deserve more – The food delivery sector in the Netherlands’. This report purposes to estimate, based on their own research, the amount delivery platforms extract from society and couriers by choosing a freelance model and avoiding compliance to Collective Labor Agreements (CLA).

Reading the report carefully, and seeing through the creative juggling with CLA standards, the FNV is inadvertently advertising these platforms. The results show that differences aren’t too big and that, especially youngsters, now have ways of earning substantially more than used to be possible in the traditional market.

 The essence of the juggling is in the choice of CLAs used in their calculations. Calculations by the FNV based on what riders do earn or should earn are centered around TLN-COA, a CLA for Transport and Logistics. This claim is based on the fact that couriers are delivering goods of third parties. An interesting exemption are the UberEats couriers who are legally exempted from this, though I won’t elaborate on this here. According to the mentioned TLN-CLA, the gross minimum wage of a 22 year old, the age used by the FNV in their calculations, is €14.99. None of the platforms concerned meets this standard.

Although most of the work executed through platforms isn’t new, the way in which the transactions are handled is different from before. Hence, I was interested in reviewing the way non-platform deliverers are being paid. If UberEats and Deliveroo would pay their deliverers less than international pizza chain Domino’s (the company listing a turnover of 2.59 billion and a profit of 136,2 million last year), this would indeed mean a deterioration of the market. I discovered that Domino’s’ deliverers in the Netherlands aren’t paid according the TLN-CLA, but rather according to the so-called ‘Horeca CAO’ (CLA Hotel & Catering Industry). They don’t transport third party merchandise, but the products of restaurants. And the respective CLA is much less interesting, especially for younger couriers. Up until 1,976 hours of experience with the same employer within the food service industry, a deliverer is entitled for the Legal Minimum Wage, with a gross hourly renumeration from €2.99 (!!) (for a 15 y/o) up to a maximum of €9.94 (for someone at least 21 years of age).

You may conclude that riders working through a platform earn more on average than the average rider in the industry. This regardless of the surely extremely important discussion about insurances. Both Uber as well as Deliveroo offer an insurance, although I have no proper insight in these matters to draw up a comparison here, neither the time to gain such insight. Reading through some messages about Domino’s on online forums regarding the level of satisfaction with their insurances and the way they deal with illness shows that a comparison of platforms with an ideal honest world isn’t fair either.

The accumulation of pension funds starts at the age of 21 only within the food service industry. Besides that, taking into account that most riders are young, have a low average amount of working hours and are entitled to tax credit, they will usually hardly pay any taxes.

Don’t get all steamed up

The calculations above show that a critical take on the message and discernment of the sender is needed at all times, as well as the purpose of the sender in the particular message. In this piece the FNV is clearly taking a stand, but by pushing it exaggeratingly (including other assumptions being presented as facts in this report), they are totally missing the mark in my opinion. Which is a shame, because the underlying questions addressed by the FNV in this article surely are important, even though some aren’t exactly platform oriented.

 Deliveroo showcases in turn, with their own calculations, that deliverers earn substantially more than the specified amounts in the FNV reports. Two researches on the impact of the company have been executed on their behalf as well. Backed by a research carried out by Capital Economics, Deliveroo shows that their contribution towards the economic growth in the Netherlands amounts 26.8 million euro (measured in terms of gross domestic product). The platform also claims to realize 2,100 new jobs within the food service industry.

In short, too many contradicting messages, and hence high time for a mature discussion as well as independent facts.

What should Deliveroo do?

Many of these discussions end in a ‘tis – ‘tisn’t argument. FNV says the algorithm offers couriers less gigs when they refuse many assignments. Deliveroo says it isn’t true. FNV states that couriers are dissatisfied, and that Deliveroo is exploiting the freelance construction. Deliveroo contradicts this. We’re not getting anywhere. Personally, I think it would be constructive to see Deliveroo present facts (and figures) in the near future, and if possible to show proof by the use of a ‘trusted 3rd party’. In fact, I don’t understand that the judge of the first court case went ahead with the existent unclarity. It really was unnecessary.

What should the FNV do?

It would grace the FNV if they would bury the hatchet they have been swinging somewhat too enthusiastically. The issues the FNV is concerned about are relevant in most cases, but the veil of activism surrounding the message only leads astray. It’s a shame, because these two trends seem to be discoverable in the FNV’s messages:

1. The dissatisfaction of the FNV with freelancers that shouldn’t be freelancers in their opinion;
2. The concerns about platform specific dangers for the vulnerable individual.

The first issue isn’t a platform specific discussion. Legislation on freelancers is unclear in many countries and regulation is lacking. This constitutes a battle to be fought at a different level. If the FNV is allowing this discussion to overshadow the platform debate in respect of trade unions, a great chance is lost.

This great chance is in regard of point 2, the platform specific questions. They do exist by the likes of:

1. The influence of working at piece rates on behavior (and safety) of food deliverers;
2. The influence of algorithmic management on food deliverers and road safety. From results of research 1 and 2 should become clear whether, and under which circumstances, piece rates are a sound idea or not;
3. The unique chance platforms offer to achieve real time transparency of decision making processes of the algorithmic management by means of an algorithm accountant. Something impossible in offline matchmaking. So, there are chances at hand;
4. The possibility to support initiatives in which suppliers become and remain the owners of their own data. (Something that needs to be researched first in order to understand whether it would be of value at all. This topic has my curiosity.)

Constructive discussion

It appears necessary to me that food delivery platforms and trade unions should take a constructive approach on these queries in cooperation with research partners –if it works for me behind closed doors at the workshops I organize, it might work as well in the openness. All parties are still hunting the golden egg and seem to be a (long) way from finding it. Experimenting and learning together to see what works best isn’t a bad idea at all. Even when, according to the media, opinions diverge greatly, all stakeholders have smart and willing people employed that are ready to move forward, which is exactly all that is needed in this debate.

This article was originally published in Dutch on ZiPconomy. 

This post is also available in: Dutch