More than a quarantine gig: Laboring in the digital market
By Atty. Amabelle C. Asuncion
October 14, 2020
In music and theater circles, “gig” is a hip term that refers to a show or performance by a musician, a band, or an actor. Nowadays, however, show business no longer has a monopoly of “gig work,” which has evolved to perhaps less glamorous but increasingly popular services provided through online platforms. This global trend has given rise to a “gig economy” where workers provide services on-demand to clients via online platform apps. The most familiar are the drivers providing transportation services, food delivery, and courier services. Other emerging gig jobs include running errands, house cleaning, clerical work, etc. A gig worker gets a gig through the digital platform, which matches him/her to a customer but has no employment relationship with the platform or the customer.
Before the Covid-19 pandemic, the gig economy was populated with individuals deliberately making a choice to take on a gig for additional income or to shift fully from regular employment to gig-app work to have flexible work hours and potentially higher returns. With the pandemic forcing downsizing and lay-offs, however, these gig jobs are becoming the main means of livelihood for more and more people. The quarantine restrictions on movement have also multiplied gig-apps over the last six months. There are now more platforms providing similar services, some providing more than one type of service. If you want food delivered, you have several options: use the delivery services of the restaurant you are ordering from; use a food delivery platform which caters to the restaurant you are ordering from; order from the restaurant and book your own delivery service that will pick up the food from the restaurant and deliver to your doorstep; or use a platform that purchases your order for you on reimbursement with mark-up basis and deliver to you.
In this sense, the existence of a gig economy at a time of crisis is a fortunate happenstance as it provides a means for earning a living while fulfilling a demand heightened by the health situation. However, this also exposes gig workers, because of the nature of their engagement, to undue exercise of any market power that online platforms may possess. The curious question is, can competition law come to their rescue?
A quick travel back to pre-pandemic times reveals that the PCC was confronted with this kind of question when it investigated the Grab-Uber merger. The ride sharing services platform is two-sided: drivers on one side and riders on the other side. Both sides stood to be harmed by the 2 to 1 merger, although their respective interests were not necessarily aligned. While the investigation focused more on the harm to the riders, it also recognized the harms to the drivers who were left with only one platform to subscribe to if they wished to continue providing ride sharing services. With Grab being the lone platform, drivers would have sufficiently diminished bargaining power in terms of commission rate, incentives, and other conditions of work. Grab was a monopsonist—it was the only intermediator of ride sharing services—and enjoyed such market power that gave it ability and incentive to lower commission rates, reduce incentives, and impose conditions favorable to it (e.g. exclusivity).
The same issues are likely to surface for gig workers today, especially with the oversupply of available labor and contraction of demand. Although there are several platforms that gig workers can choose from and switch between, human factors such as instability and desperation can negate any semblance of choice or bargaining leverage against the platforms. It should also not be forgotten that the essence of platforms is their network effects, that is, the benefit of using the platform lies in having more users. Thus, a gig worker would gravitate toward a platform that enjoys extensive network effects. Such a platform could then exercise monopsony power. This could come in the form of lower commissions and incentives, imposition of non-compete clauses, unfair labor practices, and predatory hiring.
Unfortunately, the legal status of gig workers is more akin to an independent contractor under our Labor Laws. As such, they do not enjoy the same rights and protection given to employees. As independent contractors, they will also be considered “entities” under the Philippine Competition Act and treated just like any other commercial enterprise. This means that they cannot try to strengthen their bargaining power by banding together with other gig workers to negotiate for better terms. Unlike labor unions that are exempt from the coverage of the Philippine Competition Act when they engage in collective bargaining agreement regarding conditions of employment, gig workers as independent contractors can run afoul of cartel violations if they combine and negotiate together. Yet, in the context of present-day gig workers, it is easy to see that they are as in need of protection as regular employees. In fact, it can even be argued that their need is greater during these uncertain times.
Commentators have suggested that competition law treat gig workers like employees where their relationship with the platform bears strong resemblance to the basic characteristics of an employer-employee relationship, i.e. the platform exercises such degree of control or decisive influence over the conditions under which the services are provided. This may well be a good starting point toward protecting this rising category of workers. To be sure, there may be quick regulatory solutions. Yet, it may also be an opportune time for competition policy to heed the now unmuted call of the labor market for relevant, even lasting, intervention, because definitely, labor in the digital market has become more than just a quarantine gig.
Before her appointment to the Philippine Competition Commission, Commissioner Amabelle C. Asuncion was engaged in corporate practice and served as chief legal counsel of a top company and a partner of a law firm. She was also previously involved in legislative, law and policy reform, advocacy, and adjudication work. Commissioner Asuncion has a master of laws degree (with distinction) in international legal studies from Georgetown University Law Center in Washington, D.C., and is admitted to the New York bar.
(Originally published on Business Mirror’s Competition Matters column on October 14, 2020 here.)