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'Welfare state free riders': gig economy report slams firms

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The government must close loopholes allowing "bogus" self-employment practices, the work and pensions committee has urged in its May day report.


Frank Field MP, Chair of the Committee, said: "Companies in the gig economy are free-riding on the welfare state, avoiding all their responsibilities to profit from this bogus "self-employed" designation while ordinary tax-payers pick up the tab.”

He said that offering "worker" status to drivers as the default option would be a ‘much fairer reflection of the work they undertake’

“It would also protect them from some of the appalling practices that have been reported to the Committee in this inquiry,” he said.

“Flexibility is not the preserve of poorly paid, unstable contractors, nor does the brand of “flexibility” on offer from these gig economy companies seem reciprocal. It is clearly profit and profit only that is the motive for designating workers as self-employed. The companies get all the benefits, while workers take on all the risks and the state will be expected to pick up the tab, with little contribution from the companies involved.

It is up to Government to close the loopholes that are currently being exploited by these companies, as part of a necessary and wide ranging reform to the regulation of corporate behaviour."

In an inquiry that had to be curtailed because of the election, the Committee heard from "gig economy" companies like Uber, Amazon, Hermes and Deliveroo, and from drivers who work with them.

Evidence published in the report on 1 May shows how many feel they have been duped into ‘flexible working’ and finding nothing of the sort. One courier said: “I have no flexibility or choice over my working hours/times. I regularly work from 6am to 5pm 5 days a week and even more at Christmas when I also have to employ an approved driver and provide an additional van all at my own cost.

It is my responsibility to provide cover otherwise I am heavily penalised and charged for cover. I dread anything happening to my elderly parents if I was called home due to ill health as I always need to be [at work].”

Matthew Taylor’s independent report for the government into the issue is also anticipated after the election. The Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA), which he heads up has also released its new report, Good gigs, estimating the current size of the gig workforce at 1.1 million people – the same as the NHS – and set to grow further.

RSA senior researcher Brhmie Balaram, said: "Our survey – the biggest ever of its type – shows the potential for the gig economy to grow at great speed over the coming years. In the short term, this means we must tackle the debate about the employment status of gig workers and clarify the law."

She said that ultimately a 'good working' charter between the companies and the government was needed to ensure fulfilling working lives for people.

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