The Changing Employment Landscape
On the 9th of December, the European Commission formally proposed legislation that is intended to result in sweeping changes for the gig-economy and in particular the last-mile delivery sector.
The hope is that these changes will improve the status of millions of workers. It is anticipated that despite Brexit, this legislation will have a significant impact on the UK.
Notably, the proposed directive sets out a presumption of employment for workers on digital labour platforms, as opposed to relying on the contractual determination.
Specifically, there are five criteria upon which it states that European gig workers should be assessed. These are:
(a) whether platforms effectively determine or set upper limits for remuneration
(b) if the platform sets binding rules with regard to appearance and conduct towards customers
(c) where platforms electronically supervise the performance of work or verify the quality of the work
(d) when a worker’s freedom to choose work hours, accept jobs or use subcontractors is restricted
(e) when the possibility to build a client base or to perform work third parties is restricted
Where two of these five criteria are met, it is suggested that a “worker” classification is more appropriate than “independent contractor.”
In the UK we have already seen the courts tackling this contentious issue with a number of high profile companies including Uber, Deliveroo and City Sprint arguing their cases.
The Court of Appeal determined that Deliveroo riders were indeed independent contractors, whilst the Supreme Court decided that Uber drivers were in fact workers.
What is clear from all this is:
- Gig workers are increasingly demanding constructive changes to their working conditions and employment status
- Platforms must find commercially viable ways to operate in a manner that is compatible with the workforces upon which they rely
At Ryde we have built innovative technology and combined this with flexible employment solutions by which both parties can be satisfied. We are a leading force of change in the last-mile.
Our Unique Model - Choice!
With all the debate around employment status we thought it was important to stay true to our vision and build our business model considering “riders first.”
That’s why Ryde has become the first last-mile business in the UK to develop a unique ‘blended choice platform.’
Here’s how we’re different:
Everyone else - with every other company you can be engaged as either a worker OR a contractor.
In most cases the organisation dictates the employment status to the individual by way of contract. There are pros and cons of each status. For example as a contractor I benefit from maximum flexibility but I lose minimum wage protection. As a worker I receive minimum wage protection but lose some flexibility in how I work.
Ryde - with Ryde I can be engaged as a worker AND a contractor.
Our platform establishes the employment status at the individual assignment level and not at the onboarding stage. This means an individual on Ryde has maximum flexibility on a job-by-job basis to determine whether he or she wishes to engage on that assignment as a worker or as a contractor. Clearly, this allows them to tailor the work status to their exact preferences on a daily basis.
Empowering our workforce to work in a manner that they feel is actually best for them sounds obvious.
Sadly, we have seen far too often in the gig economy that there has been a misalignment between company profitability and workforce happiness. At Ryde we’re fixing this so that everyone wins!
Why Our Model is Commercially Good for Customers
We believe that when we create optimal conditions for our workforce, our customers also get the maximum benefit.
Broadly our customers fall into 3 categories - shift customers, on-demand customers and shift+on-demand customers. Below we define each and how the third type (shift+on-demand) can be a game changer for businesses:
Customers that book shift work - Customers that book shifts (hourly) rely on ensuring a pool of workers are available exclusively to them. They are engaged across a minimum 4 hour period. These customers can use our SaaS product in addition to outsourcing.
Typically these customers require some or all of the following:
- That workers cannot substitute themselves
- That workers wear specified uniform and use specified kit and vehicles
- That workers are under direct supervision
- That workers must accept jobs they are offered
- That workers cannot work for other parties
For this structure, the individual should be classified as a “worker.”
Customers that send us on-demand work - Customers that send us on-demand jobs can do so either directly via their portal dashboard or via API integration.
On-demand work includes both instant and scheduled bookings. Unlike shift work, in this case the workforce are ‘live’ on the road and picking up orders as they come in.
These workers do not require specific uniforms, kit or vehicles. They are free to come and go as they please. There is no supervision nor any expectation they fulfil any number of jobs.
For this structure, the individual should be classified as an “independent contractor.”
Customers that need a blend of shift and on-demand work - This third type of customer is, in our opinion, most likely to build a commercially viable business in the long term supported by Ryde. Here is why:
- Since the arrival of rapid grocery delivery, the percentage of shift jobs available to couriers has exponentially increased. These jobs give guaranteed hours and pay. They are far more enticing than on-demand jobs.
- Because of this, the percentage of riders accepting on-demand jobs is rapidly decreasing.
- Most last-mile businesses can predict 70-80% of their demand fluctuations. But it is in the final 20-30% where they are either overspending (too many shift bookings) or under resourcing (not enough riders available).
- It is for this reason we see that making the last-mile commercially viable has been so difficult.
Utilising the Ryde technology and employment model, we encourage our customers to:
- Book shifts for 70-80% of your work
- Push on-demand jobs through the platform for the unexpected fluctuations
- Blend shift (workers) and on-demand (contractors) seamlessly
- Maximise delivery efficiency, fulfilment and profitability
When a customer can seamlessly blend shift work with on-demand work and workers with contractors both internal and external, they have the best chance of making the last-mile a success.
Why Should My Business White Label?
That’s a simple one…to survive!
When a company has built a strong brand, significant market presence and customer loyalty we think it’s crazy to give that away to large commission based platform businesses.
- They charge high fees to deliver your customers back to you.
- They retain your customer data…and…most importantly…
- They are using that data to build businesses and products to take your customers.
Furthermore, these businesses usually rely on on-demand workforces. They are struggling to fulfil volumes and increasingly looking to platforms like Ryde to support them.
The more time and money an established company spends on short term solutions like these, the faster they destroy their own viability. Transitioning to self-managed/branded solutions is the only way to protect against this.
Ryde is at the forefront of enabling better last-mile delivery.
At Ryde we’re really excited to be a fast growing start-up participating in the nascent hyper-local/rapid delivery movement. This industry will see change come at a lightning pace and the consolidation or demise of many businesses is inevitable. Those that survive and thrive, will do so because they embrace both the newest technological solutions and the most ‘worker friendly’ models. Ryde is proudly leading the way on both.
Ryde is a people and planet first business. We exist to ensure that the following things hold true:
- That someone looks out for the underdog- we're passionately rider first as a business. We’re the industry leader in ensuring that gig economy workforces are treated respectfully, paid fairly and supported appropriately. We are their champion. We are working hard every day to bring new and exciting benefits to our valuable team.
- That competition is democratised - we aim to ensure that every business big or small has an equal opportunity to compete, to sell, to deliver products rapidly in a dynamic environment. Not just Amazon!
- That we help the planet not hurt it - we’re a green last-mile delivery platform. We work closely with amazing partners to ensure that we keep delivery local and clean.
To read more last-mile industry insights like this, click through to our blog articles here. To book a chat with a member of our team click here.