A Nordic model for fair platform economies

“The rose-tinted view of the platform economy has faded somewhat over the past year. We have seen the reality of it, which reminds us more of the emperor’s new clothes than some future utopia. After all, it is not particularly innovative to have employment models reminiscent of those that existed a hundred years ago,” says Fredrik Söderqvist, who has specialised in the digitised economy and served as an expert on the Swedish government’s digitisation commission.

He closely follows everything happening within the platform economy, which is a term he uses instead of the more commonly used sharing economy. The idea is that digitised technology can create platforms or applications which make it easier for different stakeholders to meet.

They have often been praised for opening up for non-commercial meetings, for instance car pools, tool sharing or giving away items to people who really need them. But the digital platforms are also being used for purely commercial meetings between customers and providers. That is when the service, like Uber for instance, becomes dependent on someone delivering the service which has been promised. And when that happens, employment-like relationships form.

“There is often focus on the platforms’ flexibility, but we see that when one group of people become dependent on these revenues, things become difficult. The hardworking platform workers often end up being squeezed,” he complains.

Apps in control at all times

He mentions several examples, like the online publication Breakit’s story about the food delivery service Uber Eats. The company delivers food from Stockholm’s restaurants to homes and workplaces, using bicycle couriers. The couriers have to provide their own bikes, and they are paid according to how many deliveries they carry out. Erik Wisterberg describes the rain and cold, the long shifts and hopelessly looking for new assignments. He talks about other couriers he meets, who can barely speak Swedish and who are completely dependent on the money they can make.

He managed to achieve an hourly wage of 39 kronor (€4), but met colleagues who were available on their bikes for an entire evening yet securing no assignments. As a result they made no money. Erik Wisterberg also tried working for Foodora, a similar food delivery company. The money was better than with competitor Uber Eats, but it was also more stressful. You had to ride fast, because the company can monitor how fast and efficient the courier is via the app.

So who is responsible if a courier for instance gets injured in this relatively new type of employment? The Swedish Work Environment Authority recently carried out an inspection at Foodora, and pointed out a range of working environment breaches. One of the most serious was that the company waited for almost a year before reporting that one of their employees had been hit by a car. The couriers are told to follow traffic regulations, but what is the impact on safety and the willingness to follow the rules when the speed of delivery is a constant focus?

Important to pin down employment responsibility

“In this instance reality caught up with the company, and it could no longer escape its responsibility as an employer,” says Fredrik Söderqvist.

Unionen is working hard to establish that a company which organises and distributes work through digital platforms does have an employer’s responsibility. 

“For us it is crucial that they must live up to the role as employers in the same way that others working with other business models do,” he says.

The big question is how today’s regulations covering the relationship between employers and employees can be adapted to fit the rapidly developing platforms. How do you adapt the labour market’s regulations to the digital environment? How do you help the employers who want to do the right thing?

“The party which holds the most information about a transaction is the one with the responsibility. How can they adapt the algorithms controlling the platform so that they can become a good employer? One way to do this would be to make existing labour market agreements more accessible to those who create the algorithms,” says Fredrik Söderqvist.

Would like to see Nordic cooperation

He imagines that companies will be able to integrate into their platforms regulations that concern employers. This could be legislation, regulations, directives and collective agreements, and it basically means these regulations become more ‘digitalised’ – like getting real-time information from the tax authorities, or integrate control functions from authorities into the app.

Fredrik Söderqvist is convinced that it is possible to begin developing this kind of adaptation of regulations within the tripartite model, as this is quicker and more efficient than having to pass new legislation. If all the interested parties cooperate, different interests can be taken into account and platforms which suit everyone can be developed.

“It would be a great advantage to get Nordic cooperation on this. We are small individually, but if we join forces we are big and can have more impact when offering systems which make it easier for platforms to prove themselves. There is interest in this, even though we are still only presenting ideas. I see this when we are out and about to ‘spread the word’,” says Fredrik Söderqvist, who is regularly invited to give talks on the issue in the Nordic countries.

How much time do you have when the technological development moves so quickly?

Fredrik Söderqvist believes the interest for finding new solutions accelerates as more and more problems arise in the wake of the platform economy. But the interest and engagement varies between different trade unions. He praises Transport, The Swedish Transport Workers’ Union, which is forging ahead with their work on digitised platforms within the transport sector. 

“But many do not see the risk of applying business models which do not work at all well in countries that offer less secure conditions for workers. Here, in the Nordic countries, there is an expectation that everyone should have good working conditions, and we also have a tradition within the trade union movement of being positive to structural change. So the big question is how we can contribute and be proactive in the implementation of the new technology,” says Fredrik Söderqvist.