Gig economy tech giants are 'free riding' on the welfare state, say MPs

Calls for UK.gov to close the loopholes allowing 'bogus' self-employment status

MPs have slammed the "bogus" self-employment practices of so-called gig economy companies – accusing the likes of Uber, Amazon and Deliveroo of passing the buck on to the welfare state.

In a report published on Monday, Parliament's Work and Pensions Committee urged the British government to close loopholes exploited by gig economy companies.

The committee heard from firms including Uber, Amazon, Hermes and Deliveroo, and the drivers who work with them. The evidence painted starkly contrasting pictures of the effect and impact of "self-employment" by these companies.

Frank Field MP, committee chairman, accused the gig economy of "free-riding" on the welfare state and "avoiding all their responsibilities to profit from this bogus 'self-employed' designation while ordinary taxpayers pick up the tab."

He added: "This inquiry has convinced me of the need to offer 'worker' status to the drivers who work with those companies as the default option. This status would be a much fairer reflection of the work they undertake, which seems to fall between what most of us would think of as 'self-employed' or 'employed'. It would also protect them from some of the appalling practices that have been reported to the committee in this inquiry."

He said Uber's recent announcement that it will soon charge its drivers for sickness cover is just another way of pushing costs on to the workforce.

"It is clearly profit and profit only that is the motive for designating workers as self-employed. The companies get all the benefits, while workers take on all the risks and the state will be expected to pick up the tab, with little contribution from the companies involved," he said.

The committee previously found many gig economy contracts to be "unintelligible" and contain questionable clauses such as agreeing not to challenge their self-employed status in court.

The report recommended that the incoming government sets out a roadmap for equalising employed and self-employed National Insurance contributions.

"it is up to government to close the loopholes that are currently being exploited by these companies, as part of a necessary and wide-ranging reform to the regulation of corporate behaviour," it said. ®