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Many platform economy companies violate workers' rights

A fresh think tank report claims that many firms in Finland's platform economy ignore and violate the rights of the people who work for them.

Nainen tuijottaa älypuhelintaan.
Image: Tiina Jutila / Yle
Yle News

There has been an rapid proliferation of digital platforms that provide work in fields such as food delivery, ride sharing, cleaning services and a range of online "click jobs", for example correcting texts or managing surveys.

However, ignoring and violating workers’ rights is a core element of the business model of many platform companies, according to Maija Mattila. A project researcher at the social democratic-affiliated Kalevi Sorsa Foundation, Mattila adds that these companies would not be profitable if they paid the full social benefits employees are entitled to.

Her claim is contained in a freshly published report based on surveys, interviews and statistics from Europe and the US, as well as her own research into the subject.

Work, but little security

According to Mattila, because of the wide range of jobs available in the platform economy, simply operating in the sector is not proof that a company is violating workers' rights.

Some of these platforms operate in the same way as temp agencies or staffing companies do and fulfill the regular requirements set for employers. In these cases, workers are ensured some security.

Mattila makes a distinction between platform-mediated jobs, where someone finds work through a platform, and the type of business that exercises control over the worker and the way the job is done, but makes the worker an independent contractor.

In the latter case, jobs are broken down into individual work assignments and some of the company's own risk is "outsourced" to employees.

"This is a clear problem in respect to workers' rights," states Mattila.

Dependent on platforms

Many platform companies market themselves to potential workers as providing the freedom of flexible working hours and the opportunity to earn extra money.

However, Mattila points out that the ability to choose working times is limited if someone has to work all the time in order to make enough income to survive.

She adds that in Europe about one-quarter of people employed by platform companies are dependent on the income they provide. The personal and household incomes of this group are lower than of people who work for these platforms on an occasional basis.

"Extending job security to platform company workers would enable access to social guarantees such as standard contract wages, paid sick leave, holidays and sufficient social benefits," Mattila suggests.

Hard on freelancers

The platform economy may provide freelancers with new opportunities, but Mattila does not see the online job market as a goldmine.

"The position of freelancers is hard in the platform economy because competition is global."

In this global market, it is close to impossible for anyone living in Finland to compete with the workforce in low-cost and low-income countries. The best recipe for success is to find a niche that requires for rare special talent.

In Mattila's view, the single most important means to improve the lot of freelancers would be the opportunity of organising for collective bargaining, without barriers being raised by legislation on competition.

As a key conclusion of her research, Mattila stresses the challenge of maintaining funding for welfare societies in the age of the platform economy. A basic income, she says, would be an ideal solution on the individual level, but on this could have a negative impact if it reduces the motivation to organise to demand a living wage.

"I think it is not the job of society to provide companies with profits. A growth in productivity should be seen in employee wages and freelancer fees. In this way, there will be enough revenues to support the welfare state," says Mattila.

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