Self employed people are happy—but they need more securityby Josh Lowe / December 10, 2015 / Leave a comment
Read the rest of Prospect’s big ideas of 2016 here
“Create your life’s work” intones the homepage of WeWork, an office-sharing company which caters to start-ups and the self-employed. It’s not a bad distillation of the benefits often ascribed to the “gig economy,” a voguish term for the trend towards flexible, freelance working patterns in the UK and other advanced economies.
Fans say that the gig economy affords workers the chance to build the career they want—high on creativity and low on compromise. But it comes with downsides. Comfortable places to work, the company of like-minded people and safety nets for when things go wrong are all taken for granted by office drones, but freelancers often lack them. WeWork, which gives the gig economy’s bright young things a place to lay their MacBooks and a “physical social network,” is helping to fix that. The company was recently valued at $10bn.
But such services are set to extend far beyond the capital’s hipsters. Self-employed people account for 15 per cent of the workforce—more if you factor in “micro-businesses” of fewer than nine people. Many of them are demanding greater security. Bruce Stevenson, one of Scotland’s biggest insurance brokers, last month launched a dedicated policy to cover small bed and breakfast operators, including those using the roomshare site Airbnb, who some household insurers refuse to cover. Insurers are slowly getting better at policies for the “sharing economy”—hiring out cars and rooms. The self-employed are much less likely to have a pension, and the Association of Independent Professionals and the Self Employed (IPSE) is calling on government to introduce a suitable new pensions product.
Then there are workers’ rights. At the Labour Party conference in September, the party’s deputy leader Tom Watson said “if I was setting up a union today it would be the Union of Web Workers.” The union GMB is already backing legal action launched by solicitors Leigh Day on behalf of four drivers who use the taxi app Uber.
Lawyers argue that Uber drivers are workers and should not be denied the right to the minimum wage and paid leave. Uber calls its drivers “partners,” says they enjoy enviable flexibility and claims London drivers get average payments of £16 an hour; well above the minimum wage. More cases are anticipated, and Nigel Mackay, the solicitor handling the case, says that similar “sharing economy” businesses could be open to other claims. Mackay hopes to have a decision next year. This could help set the terms of debate on this issue.
By and large, self-employed people are happy: four-fifths last year told the Resolution Foundation think tank that they prefer working for themselves. But further security and support are needed for many to make sure flexibility doesn’t turn into precariousness. “These people need a voice in our democracy,” Watson said in his conference speech. Next year could be the year they find it.