The government's jobs and employment tsar has warned MPs that handing Uber drivers and Deliveroo riders minimum wage guarantees would bring the gig economy to an end.
Matthew Taylor, the man behind an independent review into modern working practices, told a parliamentary committee today that the type of flexible work found in the gig economy would effectively be wiped out if existing rules on minimum wage were applied to such workers.
"If Uber drivers, Deliveroo couriers, on-demand workers, are classified as workers and get the minimum wage, we will probably have to end on-demand work," he told the business, energy and industrial strategy, and work and pensions committees.
Taylor has proposed that worker status should be adapted to include a "dependent contractor" category which would build upon piece rate legislation. Companies would have to make their data completely transparent and show that the average person doing average work would earn 1.2 times the national minimum wage and could still work flexibly.
Gig economy workers exist in a grey area, with legal disputes currently ongoing over whether they are considered self-employed or employed.
Prime Minister Theresa May tasked Taylor, a former policy adviser to Tony Blair and now head of the RSA, to address such challenges and put forward suggestions for a new framework on employment rights.
He told MPs that a new "dependent contractor" within worker status was the compromise that had been identified between ensuring good pay but also the flexibility those in the gig economy valued, during his investigations.
"What would happen in a world where they would be classified as workers, as I believe they probably ought to be? You have a real conundrum there," he said, adding that it "could lead to a situation in which thousands of people log on in the middle of the night when there isn’t much work, but are guaranteed minimum wage".
"And so the companies argue that were they to have to pay minimum wage, they would then have to move to a shift system.... it’s clear that most Uber drivers and Deliveroo couriers don’t want to work shifts, they want the on-demand situation," he said.
However, work and pensions committee chair Frank Field said the government was not prepared to consider exceptions to the national minimum wage legislation, and that neither committees, both of which are investigating the gig economy and Taylor's proposals, "were unlikely to suggest those reforms".
Taylor responded, saying: “We tried to find a way round it, if you think the risk is too great I understand that, but the consequence would be the end of on-demand work."