Illusory freedom of physical platform workers: Insights from Uber Eats in Japan

Abstract

Platform work is often advocated as offering freedom of work to labour. Contesting this claim, this article undertakes a comparative analysis of the pros and cons of food delivery platform work prior to and during the COVID-19 pandemic, and argues that the freedom of food delivery platform workers is essentially an ‘illusory freedom’. In reality, platform work has only changed mechanisms through which companies can exercise control over labour and evade their employer obligations. As a case, the article examines the illusory freedom of food delivery platform workers associated to Uber Eats in Japan. The collective bargaining efforts of food delivery workers against the excessive control of Uber Eats and the extent of success of these efforts are also examined. The article concludes by discussing the possible factors that have undermined the effectiveness of the collective bargaining efforts of the labour union.

JEL Codes: J52; J81

Keywords

COVID-19 food delivery Japan platform work Uber Eats unions

Introduction

The Japanese labour market holds a unique position in the global labour market because of its unique employment structure. Unlike most of the developed economies driven by the dominant forces of capitalism, lifelong employment, benefits linked to employment tenure and frequent bonuses generally dependent on the profitability¹ of firms have traditionally governed the Japanese labour market (Kato, 2016; Shibata, 2016, 2020). However, the stable employment system in Japan has faced sustainability problems because of rising domestic and global economic challenges as well as low fertility rate combined with non-liberal migration policies, leading to a shortage of labour², forcing many firms to offer flexible employment contracts in order to cut down costs and attract women and elderly people who are seen as interested in only non-regular work (Japan Institute for Labor Policy and Training, 2016; Shibata, 2017, 2020). As a consequence, the Japanese economy is going through a transformation leading to heightened economic liberalism. An important component of this economic transformation like other developed economies is an increasing role of non-regular workforces engaged in platform or gig work (Shibata, 2017, 2020; Yun, 2016).

The platform or gig economy can be categorised as an online platform that enables workers to perform paid tasks for a client, thus diminishing their reliance on traditional employees for work opportunities (Collier et al., 2017; Degryse, 2016; Shibata, 2020: 536; Valenduc and Vendramin, 2016). The platform work is divided into two broad categories; computer-based work (also known as online labour market or OLMs), and physical platform work that involves physical service delivery (also known as mobile labour markets or MLMs) (Organisation for Economic Cooperation and Development, 2019). Even though computer-based and physical platform work have several identical mechanisms, they both have instructive contrasts as well. The evident distinct aspects of physical platform work stem from its work nature that often requires commuting (even in unfavourable weather); direct physical interaction with sellers and buyers poses higher health and safety risks to platform workers, especially during the ongoing COVID-19 pandemic.

A significant amount of research already exists on the critical evaluation of computer-based platform work, its contribution to inequality (e.g. Artero et al., 2020; Pfeiffer and Kawalec, 2020; Shan and Zhang, 2020), and recommendations for regulating its labour standards (e.g. Easton et al., 2020; Minter, 2017; Stewart and Stanford, 2017). However, the amount of research surrounding equally pressing physical platform work is relatively scarce specifically in the Japanese context. The dynamics of physical platform work in Japan, particularly related to the food delivery business, are interesting to examine because on the one hand, Japan (like other developed economies) possesses relevant pre-requisites necessary for the successful functioning of a platform economy; on the other hand, insufficient benefits offered to physical platform workers have resulted in unionised bargaining for better working conditions (Japan Today, 2020; Matsui, 2019; Murata, 2020; Shibata, 2020). Even though existing literature exploring online platform work in Japan is extensive (e.g. Méndez, 2020; Rosenbluth and Thies, 2010; Shibata, 2016, 2017, 2019, 2020; Steinberg, 2019), relative to other advanced nations, there is not enough literature on physical gig work, specifically related to food delivery work in Japan. Also, numerous studies focusing on the developed economies have already examined the efforts of platform workers against the increasing control of platform companies (e.g. Aloisi, 2016; Dubal, 2017; Graham, 2017; Lobel, 2017; Oei, 2018; Poon, 2019; Scholz, 2016; Tronsor, 2018; Vandaele, 2018; Zwick, 2018); however, studies in the context of Japan are almost non-existent because physical platform work is relatively nascent in Japan.³ Furthermore, the importance of physical platform workers during the pandemic and their contribution towards the welfare of the society have increased manifold; consequently, they have been termed ‘essential heroes’ (Kelly, 2020). However, the challenges faced by physical platform workers during the COVID-19 pandemic are less well documented, systematically different from those faced in the pre-pandemic phase, and hence demanding of a deeper understanding of implications of these challenges on interactions between platform workers and platform companies. This article tries to narrow the aforementioned gaps in the existing literature and makes following novel contributions to the analysis of physical platform work in the context of Japan. First, the article examines how mechanisms that grant control to platform companies are often portrayed as a source of ‘illusory freedom’ for physical platform workers, specifically food delivery workers. Second, it explores how food delivery platform workers formed a labour union to collectively bargain with Uber Eats for improved working conditions. Third, the paper reports a comparison, prior to and during the COVID-19 pandemic, of efforts of the Uber Eats labour union for improved work conditions, and offers fresh insights on how the pandemic has shaped the difficulties and demands of physical platform workers. Finally, the article evaluates the extent of success of the labour union in achieving improved working conditions, discusses the possible factors undermining the effectiveness of the union, and briefly analyses implications of the current study in a broader perspective for other economies.

The rest of the article proceeds as follows. It begins by discussing the advantages and disadvantages of physical platform work and the notion of fictitious freedom. Next, the article provides an overview of the food delivery market and advent of Uber Eats in Japan. Third, it examines both the pre- and during the pandemic challenges and organised efforts of food delivery workers to mitigate these challenges. Finally, the conclusion provides possible reasons for the limited success of the Uber Eats labour union.

The dichotomy of platform work: A case of fictitious freedom

The dichotomy of platform work is interesting to examine from an institutional point of view. It is often argued that platform work offers new, wider and equal employment opportunities, provides flexibility and freedom to choose location and duration of work, eliminates tedious hiring processes, and removes work pressure from seniors (Baiyere et al., 2019; Kuek et al., 2015; Mäntymäki et al., 2019; Shibata, 2020; Taylor et al., 2017). It is also interesting to see how most firms and governments in the advanced economies have supported gig work (Shibata, 2020). For example, the consulting firm McKinsey finds that in the USA, platform workers by choice report higher happiness compared to the traditional 9–5 workstyle (Gillespie, 2017; Shibata, 2020) while the World Bank reports wider and global earning opportunities, and the possibility to learn new skills for gig workers (Kuek et al., 2015). Similarly, British Prime Minister Theresa May also expressed support for gig work and new forms of business models (Odell, 2017).

Despite the benefits of platform work and its evident support by numerous firms and governments, various factors raise concerns regarding the nature of platform work (Kaine and Josserand, 2019; Moore and Robinson, 2015; Shibata, 2020). Platform work is linked to weakened individual and collective bargaining power of workers, often forcing them to work under tougher conditions and at reduced wages. It also enhances work uncertainty in the labour market, stimulates income instability, and a consistent demand for uniform tasks triggers de-skilling in the labour market and a downfall in wages (Bellace, 2018; Burgess and Connell, 2020; Flanagan, 2019; Howe, 2006; Huws et al., 2018; Kenney and Zysman, 2016; Moore, 2017; Shibata, 2020; Srnicek, 2017). Also, the demand for homogeneous tasks leads to an interchangeable and invisible form of labour that ultimately increases competition among platform workers, and allows platform companies to benefit from this increased competition by offering ‘zero hour’ employment contracts and evade their obligations towards workers (Holtgrewe, 2014; Shibata, 2020: 538). Resultantly, platform work, as put by Valenduc and Vendramin (2016: 34) is ‘a continuous employment relationship without continuous work’. As a consequence of non-continuous work opportunities, platform workers often need to make themselves continuously available; hence, boundaries between work and private life become blurred (Shibata, 2020; Valenduc and Vendramin, 2016). From a legal perspective, platform workers are contractors rather than employees and are therefore ineligible for benefits such as overtime payments, paid vacations, and on-job accident insurance (Shibata, 2020; Srnicek, 2017).

The precarious nature of physical platform work, especially food delivery work, has significantly intensified during the COVID-19 pandemic because delivery workers are constantly exposed to a heightened risk of virus contraction through contact with restaurant workers and end customers. The workers also need to take extra precautionary measures to minimise chances of virus contraction; if, unfortunately, they contract it, in most cases they are themselves responsible for their medical treatment (The Mainichi, 2020b). This insecurity about virus contraction and possible financial burden of medical treatment can also cause mental stress and expose workers to profound psychological health problems. Also, owing to the nature of the job, delivery workers often face social discrimination and rage from society (Graham, 2017; Holmes et al., 2020). The aforementioned factors indicate that physical platform work represents a new form of labour control, from traditional, visible, on-the-spot, and direct, to a more nuanced one through mechanisms that render platform workers invisible and exchangeable, and hence allow platform companies to suppress wages and offer compromised working conditions (Shibata, 2020: 538). Hence, the employment mechanisms of physical platform work, frequently portrayed by prevalent pro-gig work discourse as a source of ‘worker’s freedom’ and ‘sovereign employment’ are questionable. The pro-gig work discourse builds upon the autonomous opportunities of employment while neglecting constraints that tend to limit the purported employment autonomy, which according to Polanyi’s economic philosophy is an ‘illusory freedom’ driven by a heightened control by platform companies, based on material prosperity and devoid of social values, just practices and self-realisation (Filip, 2012; Polanyi, 1977: 77). The measures taken by platform companies under the guise of modern capitalism are in reality confining the freedom of platform workers (Filip, 2012). The application of Polanyi’s notion of ‘illusory freedom’ to the platform economy is similar to the idea of ‘fictitious freedom’ of platform workers recently discussed in the gig economy literature (Klein, 2017; Shibata, 2020). The pro-gig notion is also similar to Lukes’ third dimension of power – platform workers are either unaware of their interests or in many cases, unable to express and bargain for those interests because they are contractors rather than employees (Lorenzi, 2006; Lukes, 2004). The existing control of platform companies if left unchecked can initiate unrest in the platform labour market and can lead to organised efforts and government intervention to put limits on the negative influence of platform companies on platform workers’ freedom (Filip, 2012; Polanyi, 1977). The subsequent sections examine the struggle of physical platform workers against their ‘illusory freedom’ in Japan and its relevance to other countries.

Japanese food delivery market and Uber Eats

The Japanese food delivery market grew significantly in the last decade because of increased demand from elderly people, working households and families with children (Yano Research Institute, 2017). Moreover, an increase in the consumption tax (from 8% to 10%) on food enjoyed inside restaurants, while exempting takeout orders from this tax hike, also caused a surge in the demand for online food delivery services (The Mainichi, 2019). Overall, the Japanese food delivery market in 2019 stood at 2 trillion dollars and expects 20% growth this year (Kawana et al., 2019). In all, 52% share of the food delivery market is occupied by Co-op’s deliveries primarily composed of groceries (Yano Research Institute, 2017). The food delivery employees of Co-op however fall in the traditional labour market. The deli delivery segment occupies the second largest share (14%) of the food delivery market with Damae-Can and Uber Eats occupying 15% and 10% of its share, respectively (Statista, 2020; Yano Research Institute, 2017). Damae-Can is not examined in this article because its delivery drivers do not fall under the classification of platform workers. Uber Eats is discussed here because it occupies a large share of the platform food delivery segment in the Japanese market. Uber Eats started its operations in Japan in the last quarter of 2016 with over 150 restaurants on board (Rothenberg, 2016). The company witnessed a slow growth and took almost 4 years to reach a portfolio of 17,000 restaurants in February 2020. However, the number of restaurants increased by 3000 only in March this year due to the pandemic’s effects (Kyodo News, 2020b). Currently, Uber Eats is operating in 27 Japanese cities with over 15,000 delivery workers⁴ (Nippon News, 2019; Uber Eats, 2020).

The pandemic has constricted social interactions, increased telework,⁵ and forced the public to use online shopping platforms, especially for ordering restaurant food (Matsunaga et al., 2020). As a result, in Japan, there has been a surge in the number of orders made through Uber Eats and an increase in the number of restaurants⁶ registering with Uber Eats (Kyodo News, 2020b). In a rare case, Uber Eats also gained support from the Hyogo prefecture’s government for connecting the eateries to its service (Nippon News, 2020). The pandemic has also cast negative repercussions on the labour force in the form of reduced working hours and decreased earnings. In extreme cases, laborers have lost their jobs temporarily (furloughed workers are three times higher in April 2020 compared to April 2019) or permanently as the unemployment rate increased to 2.9% in May compared to the pre-pandemic rate of 2.2% (The Asahi Shimbun, 2020; Statistics Bureau of Japan, 2020). In an attempt to make up for the loss in earnings at a time when formal employment opportunities have dwindled significantly, an increasing number of people in Japan are turning to earning prospects offered by Uber Eats (O’Donoghue, 2020; The Asahi Shimbun, 2020; The Mainichi, 2020a). Hence, increased online food orders are equally matched by an increased supply of delivery workers, creating an ideal growth scenario for Uber Eats in Japan.

Efforts to organise by food delivery workers

Pre-pandemic delivery workers’ concerns

Uber Eats like many other platform companies treats food delivery workers as contractors rather than employees; therefore, delivery workers were not entitled to essential employee benefits including complete accident insurance and paid holidays when Uber Eats started its operations in Japan (The Asahi Shimbun, 2019). As a result, numerous food delivery workers frequently raised concerns with Uber Eats regarding working conditions prior to the pandemic. These concerns were primarily related to (1) The degree of accuracy and effectiveness of distance-based metrics used for the calculation of wages (Kyodo News, 2019a; The Asahi Shimbun, 2019) and its possible drawbacks for workers reflected in the form of reduced wages; (2) The arbitrary suspension of Uber driver accounts leading to loss of work and income for the delivery drivers, hence creating both heightened work and income uncertainty; and (3) An urgent demand for the provision of complete on-job accident insurance (The Asahi Shimbun, 2019). The non-provision of accident insurance perhaps posed the greatest concern because: (1) food delivery workers spend significant amounts of time on the road and hence are exposed to a relatively higher accident probability; (2) if unfortunately, the delivery workers get involved in an accident due to their own mistake and require medical treatment, the hospital expenditures without complete accident insurance in Japan can be a huge monetary burden⁷; and (3) if the accident occurs due to the mistake of the delivery driver, it is the driver’s responsibility to pay for the injury or damage caused to the other party (Shinjuku City, 2020). Depending on the kind of accident and injuries, the compensatory payments can be very high.

Labour union and collective bargaining

Despite recurring individual efforts of food delivery workers, their concerns did not receive the desired response from Uber Eats. In an attempt to ensure better working conditions, on 3 October 2019, 17 food delivery workers in Tokyo formed a labour union⁸ for collective bargaining with Uber Eats (The Asahi Shimbun, 2019). Since its formation, the labour union has facilitated the demands of the delivery workers through the following channels:

The direct benefit has been an improved and effective negotiating power of the delivery workers via collective bargaining and provision of a formal platform for food delivery workers to effectively express their concerns

An indirect benefit has been a realisation by the labour ministry of Japan of the need to initiate discussions on relevant protection measures for physical platform workers, especially those in the food delivery segment (The Asahi Shimbun, 2019). In 2020, the Japanese government also planned to present a bill to the Diet that was expected to provide sufficient benefits to freelancers (Kyodo News, 2019a). Even though the exact contents of the bill were not finalised at the time of writing, if approved, the bill could possibly push platform companies to improve working conditions of their workers

Apart from the aforementioned benefits, through its coverage in news and other media outlets, the labour union has increased awareness about the lack of essential benefits for food delivery workers, and therefore intensified pressure on Uber Eats to meet the necessary demands of the union. Though local, these efforts of food delivery workers in Japan have also had the tendency to stir a global movement by creating awareness among international food delivery workers and by providing them a blueprint for an effective collective bargaining model in the form of an organised labour union.

The labour union since its formation has tried to negotiate several work-related concerns with Uber Eats. The most important and urgent ones have been the demand for full accident insurance coverage in case of job-related accidents, and a better wage mechanism. The response from Uber Eats to these demands has been a mixed one so far. Prior to the union’s formation, Uber Eats provided incomplete accident insurance covering medical treatment expenses (maximum capped at 250,000 yen), compensation for disability, a recompense in case of death (10 million yen), and daily benefits in case of an on-job accident (The Asahi Shimbun, 2019; Uber Eats, 2019). The on-job accident insurance duration, however, is constricted: it starts when a delivery driver accepts a request, and ends when the delivery is complete or when the customer cancels the order (Uber Eats, 2019). Even though insurance does not cover full treatment expenses (only up to 250,000 yen), it still offers significant protection and monetary incentives to the delivery drivers. The labour union’s demand to revisit the payment mechanism was not accepted. In fact, Uber Eats lowered the base wage for delivery drivers by 22% (793 yen decreased to 621 yen or USD5.7) for a 5 kilometre delivery in November, 2019 (Kyodo News, 2019b). Following unsuccessful attempts to negotiate with Uber Eats, the union filed a petition with the labour disputes arbitration section of the Tokyo Metropolitan Government and awaits the results (Japan Today, 2020). Overall, the pre-pandemic efforts of the labour union did not bring significant success.

Pandemic driven labour challenges and the union’s efforts

The COVID-19 pandemic has placed food delivery workers in a situation that risks their health while delivering food to people who are unable to go out because of the pandemic. The food delivery workers are also exposed to the constant risk of virus contraction and require necessary preventive measures to minimise the risks posed to their health. As a result, most demands of food delivery workers during the pandemic are different from those prior to the pandemic, and represent a direct outcome of the risk and challenges posed by the pandemic. The demands of the labour union during the pandemic are summarised below:

The delivery workers through the labour union demanded necessary protective equipment to ensure workers are able to take optimal preventive measures during the pandemic (Kyodo News, 2020a). Even though the general public in Japan is spending on preventive measures, the frequency and extent of these measures (such as face masks, use of hand sanitiser, gloves) is higher for food delivery workers because of the nature of their job. As a result, relative to labour either telecommuting or working in-office, the cost of ‘working securely’ has increased for food delivery workers and requires financial support from Uber Eats to ensure these workers do not risk their health.

The labour union demanded a hazard compensation of 300 yen (approximately USD2.76) per delivery made during the pandemic (Kyodo News, 2020a). The demand for hazard compensation, on one hand, is a monetary benefit to the delivery drivers for their valuable services provided in a risky working environment, while on the other hand, it also serves as a token of appreciation encouraging delivery workers during the difficult pandemic time.

Due to an increased demand for food delivery during the pandemic, the number of food delivery workers on the road – and hence their accidents – increased; for several of these accidents, the compensation provided by Uber Eats fell short of completely covering the medical costs (Japan Today, 2020). Also, between January and March this year, 20% of delivery workers involved in on-job accidents were forced to stay home due to their injuries and deal with possible income loss (Kyodo News, 2020c). Resultantly, the labour union called for comprehensive accident insurance coverage, specifically during the pandemic, and for provision of sufficient benefits in case workers are confined at home due to the injuries incurred as a result of on-job accidents (Japan Today, 2020; Kyodo News, 2020c).

The labour union’s efforts during the pandemic remained unsuccessful; at the time of writing this article, Uber Eats did not accept any of their aforementioned requests. The union has not given up on its efforts, and from time to time it has used media platforms to initiate negotiations with Uber Eats. Recently, the union has also sought legal help from the Tokyo government (Kyodo News, 2020c). However, the outcome of this legal interaction is uncertain and a result in the near future is unlikely because the government is busy in its efforts aimed at containing the rapid resurgence of COVID-19 cases in Japan.

Conclusion and discussion

The advocates of physical platform work argue that it provides an autonomous and flexible working environment to workers and enables marginalised people to find work. The opponents of physical platform work argue that it weakens the collective bargaining power of workers, forcing them to work in difficult conditions and at reduced wages. Also, during the COVID-19 pandemic, the demand for physical platform work, specifically food delivery work, has increased significantly. However, the nature of food delivery work has created health, psychological and social challenges for delivery workers. Even though platform work is projected as an employment form that grants workers freedom, an informed and careful analysis dependent on the challenges and risks associated with physical platform work reveals this freedom is an ‘illusory’ one. In fact, the mechanisms of physical platform work have granted more control to platform companies. The article has discussed how physical platform workers, specifically food delivery workers in Japan, formed a labour union to collectively bargain against the excessive control of Uber Eats, and examined the extent of the union’s success. Pre-pandemic, the labour union unsuccessfully bargained for the provision of complete accident insurance and better working conditions. To compensate delivery workers for their valuable efforts during the pandemic, the labour union demanded protective equipment, hazard pay and a comprehensive on-job accident insurance from Uber Eats. Despite a significant boom in business due to the pandemic, Uber Eats did not accept any of the union’s demands. Therefore, the success of the labour union’s efforts during the pandemic remains meagre as well.

The unconcerned attitude of Uber Eats, especially during the pandemic, reveals the immense power exercised by platform companies over its contract workers. It also reinforces the notion that the independence of physical platform workers in essence is an ‘illusory freedom’. In the absence of proper labour laws, platform companies like Uber Eats will keep on thriving, while the socio-economic challenges and health risks faced by their contract workers, particularly during the pandemic, might intensify. Although Japan’s labour ministry has initiated discussions to formulate policies for the protection of platform workers, the outcome of these discussions and the structure of policies, if approved, remains uncertain. In the absence of relevant labour laws, to ensure better working conditions throughout the pandemic, a large number of delivery drivers in Japan have to offer united support to the union and actively participate in its activities. At present, a weak participation of delivery workers (as of 11 April, the union had only 30 members) is a major factor undermining efforts of the union and weakening its collective bargaining power (The Japan Times, 2020a). While the currently weak participation rate is partially a consequence of the ongoing COVID-19 pandemic, to a large extent it is dependent on the kind of people and their motives for working as food delivery drivers. For many, the food delivery job is a part-time work to supplement their earnings or to support their living expenditures and obtain regular exercise by cycling (Tarrant and Sakai, 2020). Hence, the motivation and value of participation in the union activities is not strong enough for these kinds of workers. Also, worker participation in unions in Japan has constantly decreased since 1975; it currently stands around 17% for regular workers, and around 6% for non-regular workers (Ministry of Health, Labour and Welfare, 2013). The weak unionisation of non-regular workers is also reflected in the Uber Eats labour union. Unless a significant proportion of delivery workers offer their united support to the union, improved and friendly working conditions during and after the pandemic might not be achieved.

From a policy perspective, it is interesting to note that the dynamics of ‘illusory freedom’ of platform workers and their efforts in Japan are very similar to current events in other developed countries, including a recent unsuccessful referendum against the evasion of employer responsibilities by Uber Eats in California and concerns against lack of compensation for recent on-job deaths of five food delivery gig workers in Australia (Conger, 2020; Lane, 2020; Zhou, 2020). Therefore, evidence from Japan further strengthens the notion that challenges posed by physical platform work are to a large extent common across several developed economies and similar problems might arise in the developing economies. As a result, it is important for countries to formulate policies to limit the power of platform companies and help in institutionalising the freedom of platform workers, decreasing economic inequalities and protecting society (Polanyi, 1977).

Footnotes

Acknowledgements

I express my gratitude to Doctor Saori Shibata (University Lecturer Economy of Modern Japan) at Leiden University for her valuable feedback and suggestions. I also thank the editor and two anonymous referees for their valued comments and recommendations.

Declaration of conflicting Interests

The author(s) declared no potential conﬂicts of interest with respect to the research, authorship and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Hamza Umer

Notes

Author biography

Hamza Umer is International Research Fellow of the Japan Society for the Promotion of Science (JSPS) as well as visiting researcher at the Institute of Economic Research (IER), Hitotsubashi University, Japan. His current research interests include the Japanese labour market, new technology, behavioural economics, laboratory and field experiments.

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