Contents
Digital platforms will provide employment to 15 million of our countries by 2030. But it is not clear how to regulate this segment and protect the rights of workers. According to experts, fundamentally new formats are needed here.
How many people work on the platforms
Over the past ten years, the number of platforms connecting customers and contractors or customers and businesses has grown several times. In 2020, the International Labor Organization counted 777 such sites, according to the study “Platform Employment: Definition and Regulation”, prepared by experts from the National Research University Higher School of Economics. The most striking example in this segment is the well-known Uber. There are also many similar sites in our country, including Yandex.Taxi, Ozon, YouDo, Profi.ru and SkyEng.
But it is almost impossible to determine how many people platform employment is now embracing. Most of the estimates are incomplete, and besides, the figures vary greatly depending on the calculation method, explains Oksana Sinyavskaya, deputy director of the Institute for Social Policy at the Higher School of Economics, the author of the report.
For example, in the countries of Europe and North America, according to various sources, from 0,3% to 22% of the adult population is included in platform employment. Among the world leaders in this indicator is China, where the share of people employed on platforms supposedly reaches 15% of the entire workforce.
As a rule, such platforms serve as a source of additional income for performers. The share of those for whom this is the main or only income is estimated at 1-4% of the total number of employees.
To get a better idea of the situation, the HSE conducted in-depth interviews with representatives of the leadership of Russian platforms and government agencies. According to one of the state stakeholders, in our country about 2 million people work in the legal sector of platform employment, and about 5 million more do it unofficially.
Due to the uncertainty of estimates, the future dynamics of this segment is difficult to predict. Projections range from 6–8 million to 15 million people by 2030. Experts expect platform employment to grow in e-commerce, courier delivery, personal services and IT.
But the main problem is not that these workers cannot be counted, but their social vulnerability. Those employed on the platforms usually do not have vacations and sick days, and in order to maintain the required level of income, they are sometimes forced to work, including on weekends and holidays. All this has a bad effect on the workers themselves, and on the economy as a whole.
At the same time, society’s demand for “independence” is quite high. According to VTsIOM (May 2021), 51% believe that the self-employed should be given the right to choose whether or not to pay contributions to state social funds. Most of all supporters of this point of view are among the potential target audience of this form of employment: this idea is supported by 69% of students and specialists with higher education from the commercial sector
Advantages and disadvantages of platforms
For employees
Pros:
- autonomy, freedom in choosing a schedule and scope of work
- low entry barriers
- unlimited geography
Cons:
- irregular and irregular schedule, overtime, lack of work and rest
- no mechanisms for protecting labor rights
- no social security
For the economy as a whole
Pros:
- the possibility of increasing employment and incomes of the population, including for vulnerable groups (youth, the elderly, the disabled, women with small children)
- reducing unemployment during crises, including against the backdrop of a pandemic
- legalization and “whitewashing” of economic activity
- increasing the availability of certain types of services
Cons:
- compression of the segment of traditional employment, which serves as a source of social insurance contributions
- risk of tax shortfall
- increased risks of poverty at low prices for services
- loss in human capital
- an increase in demand for social assistance programs due to the lack of labor guarantees and social insurance
For platform
Pros:
- the number of performers can be adjusted depending on demand
- tax savings
Cons:
- erosion of the labor force
- low employee loyalty
- negative selection of performers
How the segment is regulated in the world
According to Oksana Sinyavskaya from the Higher School of Economics, in most countries, people who are provided with jobs by platforms are recognized as self-employed. But the approaches to regulation are still quite different. They depend primarily on the ratio of pluses and minuses that platform employment brings to a particular economy.
In those countries where the official segment is developed with good social guarantees and high loyalty to the payment of taxes and contributions, they look at the new format with caution and try to fit it into the traditional system of labor relations. This approach is typical primarily for European countries. Many of them are trying either to equate the new type of employment with work for hire, or to extend all the basic social guarantees to this category of self-employed.
If the country is reluctant to pay taxes and contributions, social programs are not very developed, and the share of informal employment is large, then the platforms bring more benefits than costs. Therefore, the authorities tend to try to develop special solutions for platform employment.
But so far, almost no one has succeeded in creating more or less intelligible rules of the game. “In all countries, the practice of regulation has its own characteristics, often national or historical aspects leave their mark. It is heterogeneous and ambiguous. Practically no specific applied solutions have been adopted anywhere, and employees are integrated into the current system, in fact, choosing between self-employment and employment for hire, ”explains Associate Professor of the Basic Department of the Chamber of Commerce and Industry of the Russian Federation of the Russian Economic University named after G.V. Plekhanov “Development of human capital” Ludmila Ivanova-Shvets.
At the same time, judicial practice is ambiguous, and decisions of instances, even within the same country, often contradict each other. So, in a court in Beijing, when considering a dispute between drivers and the EDJand platform, it came to the conclusion that the driver is an independent contractor and must himself be responsible for the accident. And in Shanghai, in a similar process, the opposite decision was made: the drivers were recognized as employees of EDJand, and the companies were ordered to pay damages to third parties caused during the accident.
HSE researchers note that cases often end up with platform workers recognizing the basic rights inherent in wage employment. “However, this should not be regarded as a movement towards equalizing platform employment with wage labor. The main reason for this practice is the regulatory vacuum,” the report emphasizes.
In Austria, Sweden, Luxembourg, the self-employed and those employed on platforms are covered by all forms of social protection, except for unemployment insurance. However, in these countries, payments for self-employed and employees are initially very similar.
In France, Switzerland, the Netherlands, Finland and Slovakia, the self-employed have all the basic social guarantees, with the exception of accident insurance.
In some countries, such as Croatia, Hungary and Germany, the self-employed can choose the amount of contributions, which determines the amount of guarantees.
How to approach regulation in our country
The authors of the study are sure that platform employment does not fit into the format of traditional employment relationships. And if we follow this path, then our country will not be able to fit into the economy of the new technological order. Such an economy cannot be built on the labor principles of the early XNUMXth century, emphasizes the deputy director of the Institute for Social Policy at the Higher School of Economics.
Representatives of platforms and government agencies in our country generally agree with this point of view, the results of in-depth interviews conducted as part of the study show. So, one of the officials noted that it was not about hiring, but about the “dispatcher relationship”, which helps to find a contractor for a particular service. According to another respondent, platforms are “an independent form of employment” and should not be “immersed in some other form.”
Platform employment itself is highly differentiated, the report emphasizes. The main difference is between web-based platforms (freelancing and outsourcing in the form of remote work) and location-based platforms that bring the client and business together for the personal provision of services. This difference must be taken into account when developing the rules of the game, Sinyavskaya points out.
As for how to regulate the new format of work, the opinions of the respondents are somewhat different. According to Sinyavskaya, some respondents believe that it is worth offering “quasi-voluntary” solutions and, to the extent possible, involve those employed on the platforms in social and pension insurance. Others are sure that everything should happen exclusively on a voluntary basis.
However, everyone agrees that any attempts to dramatically extend the entire package of social guarantees to platform employment in our country will most likely kill this segment and undermine the positive effects that platforms bring. Therefore, regulation must be introduced carefully and step by step.
What tools are needed
New formats of work can be consolidated within the framework of the current Labor Code, says Natalya Loktyukhina, professor at the Academy of Labor and Social Relations. But since platform employment is very diverse, most likely, it will be regulated not only by the Labor Code, but also by other legislative acts.
The expert also notes that the category of the self-employed (and they actively work on the platforms) in our country is still not sufficiently regulated. For example, they are entitled to voluntary contributions to the Pension Fund, but they do not make them very actively. And it is not clear what these people will live on at retirement age.
According to Oksana Sinyavskaya from the Higher School of Economics, one of the tools for future regulation could be economic incentives for platforms that create mechanisms for social protection of workers. For example, they voluntarily include them in risk insurance and qualification growth programs.
Such instruments should be voluntary, Dmitry Zhuravlev, CEO of the Institute for Regional Problems, is convinced:
“Incentive options may be different. Somewhere it is necessary to support business and platform initiatives, especially if these are good initiatives. And somewhere – to legislatively carry out additional adjustment or regulation of the industry.
From the point of view of the state, it is important not to overdo it in this direction, experts emphasize. “Excessive regulation or incentives can backfire. But the minimum must be provided for the employee, regardless of the type of employment or type of taxation, ”concludes Lyudmila Ivanova-Shvets from the Russian University of Economics. Plekhanov.