Not too long ago, Canada’s Northwest Passage was effectively unnavigable. The ice was simply too thick for sailing ships to make it through during the too-short summers.
And while Netflix’ excellent miniseries The Terror brings an additional supernatural element to the horrors of being icebound on the Royal Navy’s Arctic expeditions of the mid-1800s, the reality was awful enough.
It took more modern icebreakers, and global warming, to make the route more viable.
And for one part of the global regulatory pack-ice, it took Uber.
Imagine, if you will, a heavily armoured icebreaking cargo ship designed to plough through the Northwest Passage. Once the path through the ice is cut, other ships can follow more easily. The icebreaker will get its cargo through first but at a much higher cost per container than the ships that follow in its wake. The armour and the fuel to push through the ice do not come for free.
Over the past decade, Uber has been breaking a lot of regulatory ice.
Most here will remember Uber’s 2016 Parliamentary hearings. Uber’s Richard Menzies had to explain to a Parliamentary committee, some members of whom may have gotten just a little too accustomed to chauffeured services, that there was no risk of someone trying to flag down an Uber as though it were a taxicab. The cars could only be hired using an app on a phone.
Perhaps because our MPs so badly embarrassed themselves in those hearings, New Zealand wound up with workable regulations. It would have been hard for Parliament to recover from a second demonstration of technological incompetence.
But New Zealand is only one country in a big world. And most other countries start with far worse policy than New Zealand. Their pack-ice is thicker than ours.
Getting past regulations
Much of Uber’s first decade was spent working out how to get through morasses of existing taxicab regulation that protected incumbents and stymied entry. And many ships have followed in the cleared path. But new ice forms behind them for the return journeys.
App-based platforms, such as Uber but also many others, mediate between buyers and sellers of services. They change the nature of work for those choosing platform-based work. Rather than take set hours and wages, app contractors enjoy the flexibility of choosing their own hours and finding the arrangements that best suit their needs.
But that change stands as a challenge to existing regulatory frameworks. Legacy regulatory systems have worried a lot about employers firing their existing staff and hiring them back as “sham” contractors to undertake their old tasks, with fewer set benefits and employment protections.
That leads to long sets of criteria trying to assess whether someone is a legitimate contractor or should be treated as an employee. The more benefits a platform provides to suppliers working through their app, the more subject that provider may be to “reclassification risk.” Employment courts might decide that suppliers working through the app are really employees.
Reclassification risk of this sort easily winds up hurting the people employment legislation otherwise aims to protect. In January this year, an Uber Eats bike courier in Bordeaux, France, was killed by a truck that did not see him and reversed over him. If the company provided high-visibility safety gear to its driver-partners to improve safety, it may worry that French courts would consider those drivers to be employees because of the company-provided uniforms.
This reclassification risk extends well beyond France. Reuters reports that, as of last August, Uber had won 123 lawsuits in Brazilian courts confirming its drivers are not employees. The full tally of international legal costs are surely substantial. The costs of running the icebreaker are not small.
Shifting to consider platform-mediated workers as employees rather than self-employed contractors would break the parts of the model that many choosing that work especially value.
Were platform workers considered employees, minimum wage rules would apply – as would many other employment rules. But how should we even start thinking about applying minimum wages when drivers choose whether, when and where to turn on the app and be available for service? It is entirely reasonable to expect a driver taking rides continuously during the day should earn at least the minimum wage.
But drivers on one platform may simultaneously be providing rides on other platforms; multi-platforming is hardly uncommon. That introduces one set of complexities where, over the course of an hour, a driver may have provided rides across multiple platforms. Other drivers may stay logged in at home during the evening, in case an easy fare turns up in the local neighbourhood. Applying traditional minimum wage rules to that on-call time would seem absurd. Doing so would then require the platform to start regulating when and where drivers might log in – and the benefits of flexibility would be lost.
Principles-based regulation establishing safe harbours against reclassification risk for those providing greater benefits to contractors seems a useful path forward but the path to get there is not free and clear. It takes an icebreaker.
In other areas we talk of first-mover advantages. That is not the case when we think about icebreakers. Breaking the ice is something of a public good. It is a difficult job, and I expect the terrors of trying to make Uber’s model work in France were only slightly less terrifying than being icebound in the Northwest Passage.
But once the ice is broken, anyone can follow. In those cases, there is some merit in being a fast-follower – unless someone is willing to pay an awful lot to have their container be first through the passage. Those of us along for the ride might raise a glass from time to time to the icebreakers.