A food delivery cycle courier places an insulated bag of food into the back of his bicycle as he prepares to deliver an order from Deliveroo, operated by Roofoods Ltd., in London, U.K., on Thursday, Dec. 22, 2016. The food delivery business model has proven attractive to venture capitalists, who last year poured $5.5 billion into food-delivery companies globally, according to research firm CB Insights. Photographer: Simon Dawson/Bloomberg
Meals on wheels deals: Deliveroo’s riders have a new benefits package © Bloomberg

Gig workers pay a price for the flexibility bestowed by the sector’s business model, in which platforms connect them with customers without taking responsibility for them as employees. As well as being excluded from the kind of employee benefits that offer a financial safety net — such as paid sick and holiday leave — they tend to miss out on other perks afforded to those on traditional contracts, such as subsidised gym membership.

At the same time, research shows gig workers are more likely to suffer from stress. As part of the “precariat”, they lack income and job security.

Recent high-profile legal cases suggest businesses are the biggest winners from the gig economy, and examples of perceived exploitation have dented the sector’s reputation.

Some businesses operating in the gig economy, however, are turning their attention to worker wellbeing.

In December, takeaway food delivery company Deliveroo, which faced demands in 2017 from some of its self-employed riders for union recognition and workers’ rights, made income cover available in the UK through specialist insurer Bikmo. For a small weekly sum, 15,000 riders can claim 75 per cent of their average weekly income for up to 26 weeks if they cannot work due to illness or injury. Its cyclists can now also take up public liability insurance.

Deliveroo worked with third-party employee benefits platform Perkbox to make the insurance cover and a wider range of benefits available.

UK law, in which workers are classed as “employee”, “worker” or “self-employed”, has forced businesses to find arm’s-length ways to look after workers without straying into territory in which they might be deemed an “employer”.

Dan Warne, managing director at Deliveroo in the UK, argues that employment rules should be updated to be “fit for the 21st century”, so the company can offer benefits directly in a way that does not stop riders being treated legally as self-employed.

In response to the 2017 Taylor review on modern work practices commissioned by the UK government, whose recommendations included “portable benefits”, prime minister Theresa May last week announced a series of consultations aimed at bolstering gig workers’ rights.

About a quarter of the working-age population in Europe and the US, 162m, are believed to be engaged in some type of independent work each year, according to a 2016 report by McKinsey Global Institute.

Anne-Marie Malley, UK human capital leader at consultancy Deloitte, points out that the gig model provides a way for businesses to engage skilled workers in competitive sectors. “Incentives and benefits are an important part of this as they are a powerful tool for attracting the best gig economy talent,” she says, hinting that the balance of power may not remain so heavily with the gig economy businesses.

In Poland, gig work is labelled “junk contracts”, says Bart Turczynski, content editor at Uptowork.com, a career advice website based in Warsaw that uses consultants, writers and programmers on a gig basis.

The start-up has tried to improve the business-worker relationship, he says. “If we organise an event everyone’s always invited. Plus giggers are always welcome to drop by and work from our office, see what’s up, and enjoy coffee or fruit.” Tangible benefits such as vouchers and performance-based bonuses are also useful rewards, he says. “A good start is to provide them with discounts for the company’s products.”

Businesses can develop rewards packages for gig workers through various types of third-party agents, without affecting those workers’ employment status. The Work Crowd, a UK platform for PR and marketing freelancers, uses its bargaining power to secure perks for users such as discounts on gym membership, co-working space, shopping and software. Its founder Alice Weightman says such deals help attract the best people: “We are already seeing a ‘war for talent’ situation, which might become worse with Brexit.”

In New York, the Black Car Fund is a benefits scheme for taxi and limousine drivers. Set up in 1999, it has added to its insurance offering and includes safety and wellness training for drivers. The state-endorsed scheme is funded via a 2.5 per cent passenger surcharge.

“Creative solutions to providing workers with benefits . . . will need to take centre stage,” says Jason Fromberg, a spokesman for the Black Car Fund. “Our surcharge model can be applied to any sector of industry where there is a labourer and paying client.”

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