Working Conditions in Parcel Delivery

The #BIPT (NRA of Belgium) launched an insightful breakthrough public consultation on the strengthening of working conditions in the delivery of #parcels, in line with recent legislative developments in that country [1].

One of the motivators of this evolution was the fact that the government inspection services have witnessed, along with the pandemics induced #ecommerce “boom”, a generalization of “black-market” practices, non-payment of social security contributions and payment of remuneration to people who received unemployment benefit at the same time. Assumingly, the proliferation of subcontracts offers a fertile ground to these fraudulent practices.

Among other aspects related to the social and economic consequences of regulatory approaches, the public consultation seeks replies to the following questions:

·??????If a minimum percentage of own staff is imposed by law (internalization obligation), how do you think this parameter should be defined (for example, so that absenteeism is not counted, that undeclared work is not excluded from reporting and that an FTE has the same weight regardless of the number of hours worked)? Can you explain the proposed approach?

·??????When a minimum percentage of own personnel is imposed by law on the number of packages to be delivered, a ratio must be determined to convert the number of packages into a number of FTEs so that the social inspectorate can then carry out checks. How, in your opinion, should this "package/FTE" ratio be determined?

With regard to concerns about compliance with labor legislation and best practices in this area, Gans and Leigh [2] frame, for instance, #platform practices in the long decline in the working conditions of unskilled workers.

According to Akerman et al. [3], very high-speed #broadband improves income and #productivity for skilled workers but is bad news for unskilled workers with routine jobs. Among the most rapidly declining occupations, due to #automation and #robotization, are telephone operators, #postmen, #postmasters, and computer operators.

However, more recent research suggest that automation and human labor can progress into a win-win situation. For instance, Aghion et al. [4] analyzed data from the French manufacturing sector between 1995 and 2007 to conclude that automation can increase labor demand and can generate productivity gains that are broadly shared across workers, consumers and firm owners.

In addition, Aidachi et al. [5] studied the impact of industrial robots in Japan between 1978 and 2017 having concluded that the decline of robot prices increased the number of robots as well as employment, suggesting that robots and labor are complementary in the production process (an increase of one robot unit per 1,000 workers would boost the firms’ human employment by 2.2%).

Furthermore, Tuhkuri et al. [6] analyzed Finish firms and found that advanced technologies (such as welding robots and laser cutters) did not reduce employment, nor replace workers in the production line, or increase the share of highly educated workers in industrial and custom manufacturing firms. Indeed the adoption of those technologies resulted in increases in employment and did not change the skill composition.

Some say that #innovation requires a premium for the innovator (which ultimately results in growing inequality), e.g. in terms of tax privileges for start-ups, significant market power (SMP) benefits, “friendly” #antitrust, #patent rights extension or longevity.

Gans and Leigh [2] demystify these assumptions. In particular, among their recommendations to promote innovation and reduce inequality are the strengthening of working conditions for self-employed workers, the increase in income subsidies granted to poor families and an update of national statistics (very relevant if one needs information about the economics of platforms).

In this context, the legislative initiative undertaken in August 2020 by the federal state of California (USA) [7] - however suspended after a lawsuit brought by Uber and Lyft - to reclassify its drivers as employees, should also be mentioned. With a view to guaranteeing drivers the basic rights offered to any other worker, the lower court judge even stated that if Uber's arguments were valid, it would disinherit legions of workers in the technology industries of their fundamental rights. It should also be noted that, in what some see as a maneuver to keep drivers under pressure, Uber and Lyft have been publicizing a bet on the adoption of autonomously driving vehicles [8].

Still on this matter, it is worth highlighting the position of Margareth Verstager (European Commission (EC) Commissioner in charge of competition), disclosed on 12.03.2020. According to Verstager, workers on platforms such as #Uber and the like would have to wait for the results of the EC's antitrust initiative focused on Uber to clarify whether they are entitled to unionize, given that the EC fears that dentists and lawyers may make a taking advantage of this situation to create cartels [9]. Without prejudice, on 09.12.2021, the EC presented a Proposal for a Directive with a view to improving the working conditions of workers on digital platforms [10].

Under the aforementioned EC Proposal for a Directive, platform workers would be considered employees if, de minimis, two of the following five criteria are met:

·??????The platform determines or sets upper limits for the payment;

·??????The platform requires workers to follow rules regarding appearance, conduct towards customers or job performance;

·??????The platform monitors and evaluates the work performance;

·??????The platform restricts working hours, limits the possibility to accept or refuse tasks and the freedom to turn off the application;

·??????The platform requires exclusivity or non-#competition.

If the Proposal for a Directive, under discussion in the #EuropeanParliament, is approved, workers on these platforms who meet the above-mentioned condition will be entitled, for example, to a minimum wage, paid vacations and the possibility of receiving unemployment benefits.

This evolution is somehow aligned with the UK Supreme Court Decision of 2021 which ruled that Uber’s UK drivers are workers, entitled with rights to the minimum wage, holiday pay and pensions.

References

[1] BIPT (2022). Consultation à la demande de la Ministre de la Poste concernant un avant-projet de loi modifiant l’article 5 de la loi du 26 janvier 2018 relative aux services postaux pour prévoir un pourcentage de travailleurs salariés dans le secteur de la distribution de colis en Belgique. Available at:https://www.ibpt.be/file/cc73d96153bbd5448a56f19d925d05b1379c7f21/52e658151054ccd28eeb31b1ccd2e0f56772b5c8/Consultation_avantprojet_loi_modifiant_article_5_loi_26_janvier_2018_pourcentage_travailleurs_salaries_secteur_distribution_colis_Belgique.pdf.

[2] Gans, Joshua e Leigh, Andrew (2019). Innovation + Equality. The MIT Press.

[3] Akerman, Anders et al. (2015). The skill complementarity of broadband Internet. Quarterly Journal of Economics, vol. 130, no 4, pp 1781-1824.

[4] Aghion, Philippe et al. (2021). What Are the Labor and Product Market Effects of Automation??New Evidence from France?. Mimeo. Available at: https://scholar.harvard.edu/aghion/publications/what-are-labor-and-product-market-effects-automation-new-evidence-france.

[5] Adachi, Daisuke et al. (2020). Robots and Employment: Evidence from Japan, 1978-2017. Available at: https://www.rieti.go.jp/en/publications/summary/20050012.html.

[6] Tuhkuri, Joonas (2022). New Evidence on the Effect of Technology on Employment and Skill Demand. Available at: https://www.researchgate.net/publication/359402930_New_Evidence_on_the_Effect_of_Technology_on_Employment_and_Skill_Demand.

[7] The New York Times (2020). Uber and Lyft get reprieve after threatening to shut down.

[8] The Washington Post (2019). As IPO soars, can Uber and Lyft survive long enough?

[9] Mlex Insight (2020). Gig-Economy workers need to wait for antitrust clarity on unionizing, says EU’s Vestager.

[10] Available at: https://ec.europa.eu/commission/presscorner/detail/en/ip_21_6605.