John McDonnell: We must stop 'Uberisation' of the workplace

A new network of banks should fund “co-operatively owned Ubers and Airbnbs” to take on the giants of the gig economy and stop the “Uberisation” of the workplace, the shadow chancellor, John McDonnell, has said.

McDonnell said a Labour government would provide incentives to co-operatively owned startups via a new national investment bank and a network of regional development banks.

He said the banks would have a remit to loan funds explicitly to co-operative enterprises, especially tech companies seeking to reduce the costs of transport, accommodation and culture for the average citizen.

In a speech to the Open 2017 conference at Goldsmiths, University of London, on Friday, McDonnell argued that companies such as Uber posed an “age-old threat” to workers’ rights.

He said Labour must tackle a pattern whereby employment contracts and benefits are replaced by insecure self-employment in the name of flexibility.

“The discussion of the challenges for the modern world of work posed by the so-called gig economy are nothing new,” he said. “They represent an age-old threat to diminish the hard-won workplace rights, terms and conditions offered by full-time employment.”

The shadow chancellor said old arguments on the importance of workers’ rights had to adapt to the “new world of work” created by technology.

“Rather than running away from innovation and technological advances, we need to see where we can use them to adapt to the challenges they may present to full-time work,” he said.

“The power that these changes in technology give us all is the ability to pool our collective talents and skills and produce wealth not just for the benefit of a tiny handful at the top, but for all of us. It can help us mitigate the potential growth in the ‘Uberisation’ of the workplace.”

“Digital technology means there is no longer a convincing reason to allow the wealth of society to be taken by a tiny elite, instead of shared for the many,” he said. “The old rules about the supposed efficiency of the free market and the private firm are being rewritten right in front of us.”

Last week, Uber drivers told the Commons work and pensions select committee that some had been forced to work more than 60 hours a week just to pay Uber’s commission, insurance and the costs of their vehicle.

Syed Khalil, who drives for Uber in London, said it was usual practice for drivers to work 100 hours a week and said, after paying about £500 a month on insurance and towards the purchase of his car, he was on such a low income that he needed to claim housing benefit.

A former driver for delivery firm Hermes also told the committee he did not earn the equivalent of the national living wage and had “no sick benefit, no holiday entitlement”.

Labour MP Frank Field, chairman of the committee, has called for the government to guarantee the minimum wage for self-employed workers for companies such as Uber and Hermes.

Field’s submission to the government’s labour market review led by Matthew Taylor, a former adviser to Tony Blair, said his committee had found there were 900,000 more self-employed positions in the UK workforce than in 2010.