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B.C.’s gig workers brace for bumpy ride in 2023

Slowing economy expected to reduce the demand for contractor-freelancer work
An Uber driver picks up passengers at Vancouver International Airport

Like a cook twisting an oven knob to boost the heat, Sung Hong spent much of 2022 getting progressively keyed up thinking about paying off his home amid ongoing Bank of Canada rate hikes.

“Recently the [rate decisions] have increased my mortgage payments by several hundred dollars more a month,” said the 42-year-old father of two who has worked for a courier service full time the last 12 years.

A few months back, Hong left a part-time job at a sushi restaurant to drive for Uber Technologies Inc. (NYSE:UBER), taking people between Vancouver International Airport and his home in Surrey.

He typically puts in more hours on the app than the average Metro Vancouver driver – 20 to 30 hours a week by his estimates.

That’s compared with the 46 per cent who spend 15 hours or less on the app each week, according to a 2021 report conducted by business services firm Accenture plc on behalf of Uber. Twenty per cent of local drivers log 35 hours or more each week on the app.

Despite enjoying the flexibility, Hong said he wouldn’t consider driving full-time hours for Uber.

“I already have a full-time job, and [I] have benefits over there,” he said.

Because Uber drivers are considered to be contractors, full-time hours on the app would mean giving up the full-time job that provides benefits.

“If people are working in this industry full-time hours, whether it’s for one platform or multiple platforms, if they were working in the private sector as employees, they would have certain rights,” Adam Walker, B.C. parliamentary secretary for the new economy, told BIV late last year. “And as they’re working in this [gig economy] as independent contractors, there’s certain rights that they are not afforded.”

The economy is widely expected to slow this year and Statistics Canada data shows consumer spending already taking a hit. As consumers face pressure to cut down on ordering meals from an app or booking rides after an evening out, gig workers face increasing uncertainty in 2023.

The provincial government embarked on a series of roundtables in November to hear from both gig workers and the tech platform companies that consider such workers to be independent contractors.

The provincewide roundtables came after the BC NDP pledged two years ago to develop a “precarious worker and gig economy strategy.”

“The idea with this is to identify the key challenges that workers are facing and map all potential solutions in partnership with platforms that can maintain the flexibility that workers enjoy in this industry while guaranteeing minimum standards for them,” Walker said.

“There’s a lot of cracks in the system, and when people fall through them, often they don’t have the wherewithal to address some of these issues themselves, and they’re really being disadvantaged.”

These gig workers are considered contractors not only by the platforms they work for but also by provincial legislation.

Walker wouldn’t say definitively whether the province would be making changes to legislation.

“All options are on the table,” he said.

Consumer spending in 2022’s third quarter fell 0.3 per cent– the first decline since 2021’s second quarter, according to Statistics Canada. Most of that was attributed to a drop in spending on goods, but growth in services spending went from 4.2 per cent in the second quarter to 0.9 per cent in the third quarter.

Meanwhile, the province’s Economic Forecast Council sees growth slowing significantly in B.C., from 2.9 per cent in 2022 to 0.4 per cent in 2023.

TD Bank (TSX:TD) economist Rishi Sondhi said in a note B.C. and Ontario can expect inflation to be “more persistent” compared with other provinces in 2023 as they continue to deal with high housing costs.

It all adds up to an economy in which British Columbians are likely going to be more spend-conscious at the same time as employment begins taking some hits after remarkably high labour demand over the past two years.

“When economies contract, they [gig workers] can be among the first victims,” said Stephen Herrington, a partner at Deloitte Canada who leads the business services firm’s future work advisory.

“I find sometimes we make a little too much out of these disadvantages in this particular type of employment contract … versus focusing on what can be positive.”

Harrington said the gig economy can offer work to people often kept out of traditional jobs, such as immigrants or those with disabilities.

“But there’s almost no discussion about those who might have a preference [for gig work], nor much of a discussion about the fact that this is a tech trend that’s disrupting work,” he said. “It’s happening despite the fact that employers – and especially big legacy employers – are barely participating in the [gig economy] market.”

Harrington said businesses should embrace tapping gig workers more frequently. But at the same time, he would like jurisdictions to develop policy frameworks to ensure gig workers benefit from a fair and positive employment market.

“I’m a firm believer that employers should start thinking not about attract-and-retain models, which was the sort of 20th century idea,” Harrington said. “[What] we are trying to get employers to think about instead is, how do we access talent and how do we engage them?”

An Uber Canada spokeswoman noted that in January 2022 the company gave the United Food and Commercial Workers Union Canada the right to represent 100,000 drivers in disputes related to the job. The two organizations also agreed to press provincial governments to deliver reforms to provide new benefits.

But an August 2022 Globe and Mail story revealed through freedom-of-information requests that the two organizations urged the Ontario government not to classify gig workers as employees. Classifying them as such would have entitled those workers to benefits and minimum wage.

“I do see companies pushing back on entitlements for gig workers and characterizing them as employees,” said Supriya Routh, an associate law professor at the University of British Columbia’s Allard School of Law who specializes in labour and employment law. “A company benefits right, left and centre if they treat gig workers as independent contractors.”

Employment insurance, parental leave and vacation days would not be incurring additional costs for these companies if the workers they depend on are not considered to be employees, Routh said.

“If the B.C. government comes up with a robust set of rights and entitlements for gig workers, there will be pushback from corporations – especially big ones.”

Routh added that he does not deny many of these workers appreciate the flexibility that comes with the gig economy.

“I don’t think the flexibility is so overwhelmingly important that these workers’ other entitlements, such as paid holidays, minimum wage, pensions and so on, should be sacrificed.”

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