The crisis could be a new dawn for platform-based working in the Nordic Region
At the start of the pandemic, the streets of major Nordic cities were empty, with the exception of all the bike couriers with large padded backpacks delivering food to people at home. The names of platform companies such as Foodora, Wolt, and Uber Eats - specialists in food deliveries - are printed on the backpacks.
The companies grew rapidly during the lockdown period and sought more food delivery staff. At the same time, there was increasing debate around the food delivery couriers’ safety and their rights to payment in the event they fell ill.
Dynamic or risky?
The platform economy, also widely known as the gig economy, is sometimes described as an innovative and dynamic service sector offering new sources of income and opportunities for entrepreneurship and flexible working.
Yet innovation and flexibility also have their disadvantages.
“The crisis has illustrated the risks and uncertainties associated with platform-based working. Those who take on such jobs are often considered as self-employed. As a result, they do not have the same rights to sick pay, unemployment benefits, and a good work environment as employees do,” says Sigurd Oppegaard, a labour market researcher at Fafo and a doctoral scholarship student in sociology at the University of Oslo.
New report on the platform economy in the Nordic Region
Together with a Nordic research team, Sigurd has just published the report:
It looks at the evolution of platform working in the Nordic Region over the past decade and how this challenges the Nordic labour model and welfare systems.
During the pandemic, as the researchers were completing the report, they eagerly followed the international debate on platform workers’ rights.
Protection from infection for Uber drivers, cleaners, and food couriers has been in the spotlight, as has the financial security of highly educated freelance writers and translators who suddenly found themselves with dwindling work yet often no right to unemployment benefits.
Platforms match customers with services in both high- and low-skilled industries.
Triggered by the financial crisis
The first platforms appeared in the wake of the global financial crisis in 2007 and 2008. Although platforms such as Uber, Hilfr, and Foodora have been around in the Nordic Region for more than a decade, they are still a peripheral phenomenon here.
The platform economy is growing, and researchers estimate that between 0.3 percent and 2.5 percent of the working population in the Nordic Region have worked in the platform economy within the past year.
Platform economy could grow again
“High levels of employment and a well-organised labour market have hampered the growth of the platform economy. For most people, a regular permanent job is more attractive that working in the platform economy. However, a prolonged economic crisis and high levels of unemployment could be the trigger for a new dawn in platform working,” says Sigurd.
Even without knowing for sure what will happen in the future, the researchers think it is important that the Nordic countries regulate platform working so that it does not result in social dumping, non-secure employment, and tax evasion.
Employed or self-employed?
As yet, no legal cases in the Nordic Region have clarified whether platform workers are employed or self-employed, or which collective rights they have.
The platform companies usually assume that the contractors are self-employed and so take responsibility for their own holiday pay, sick pay, and pension. Contractors risk ending up in a situation with weaker rights than if they were employed.
The platform companies do not see themselves as employers with which counterparties can negotiate wages and conditions. These are determined by the logarithms of the digital platform.
Platform economy evidence of broader trends
“The Nordic authorities and the parties concerned have adopted a ‘wait and see’ approach. Although platform working is still a peripheral phenomenon in the Nordic Region, it brings together and embodies many broader labour market trends, such as digitalisation and new forms of employment. Consequently, it’s important that the authorities and trade unions respond by demanding good working conditions. Perhaps the coronavirus crisis and potential growth of the platform economy will prompt such a response,” says Sigurd.
So far, the platform economy does not appear to have posed a major threat to the Nordic model, although the researchers state that it has created further uncertainty in industries that are already characterised by low wages, poor working conditions, a higher proportion of self-employment, and a lower proportion of unionisation, such as the taxi and good transport industry, as well as the cleaning industry.
Conversely, the Nordic model appears to have both discouraged and tamed the platform companies. Despite major difficulties in integrating the platform companies into the party model, the Norwegian Foodora and Danish Hilfr have both concluded collective agreements with their food couriers and cleaners. Researchers are observing a tendency in which the platforms are putting pressure on the Nordic model, and the Nordic model is taming the platforms.
Has the Nordic Region tamed the platform economy?
The agreement with Hilfr allows cleaners to become employees after 100 hours of work with the platform, giving them the right to sick pay, holiday pay, and pension benefits.
The agreement with Foodora in Norway regulates pay increases and remuneration for work clothes and equipment.
“These agreements demonstrate that some platform companies are trying to adapt to the Nordic model. It remains to be seen whether this is a temporary brand strategy to increase the platforms’ credibility among consumers and politicians, or whether the platforms have truly been tamed,” the researchers write.
- Read more about the report in the Nordic Labour Journal: When Uber met the Nordics.
- The report will be launched in Oslo on 23 June with the seminar “Plattformarbeid i de nordiske modellene - før og etter korona” (translates as “the platform economy in the Nordic models - before and after the coronavirus”). The seminar can be followed live. A streaming link will follow later.
- “Platform work in the Nordic models: Issues, cases and responses” is an interim report of a major research project launched by the Nordic ministers for labour in 2017.
- The research project is called Future of Work: Opportunities and Challenges for the Nordic Models.
- Twenty-five researchers from seven Nordic universities are involved in the project, which is led by Fafo in Norway.
- The final report is expected in the autumn of 2020.