People who work for the gig economy want better workers compensation and treatment from tech companies, an inquiry in NSW has heard.

The NSW select committee on the impact of technology on the future of work heard from rideshare drivers and food delivery workers who shared their experiences of working via apps in the gig economy on Monday.

Delivery worker Diego Franco said food delivery companies had taken advantage of COVID-19 to cut their pay without discussion, the Guardian reported.

“During this pandemic crisis, there was an increase in demand,” Franco said. “And they know there should be more drivers, as people lost their jobs in other industries, like waiters.

“What do they do? They make more money, and they pay less for us, because there are too many people willing to work. They are earning on both sides.”

Instead of being employees, gig workers in Australia tend to be classed as ‘independent contractors’ – something Unions NSW said offers tech companies “a loophole” to avoid offering the same legal working conditions as an employee would have.

“This status also narrows avenues available for workers to pursue disputes and seek remedies such as for unfair dismissal, workers compensation and wage theft,” Unions NSW said in its submission to the inquiry.

“In most cases, these ‘independent contractors’ do not have the sufficient control over their work location, hours, uniforms or pricing that would demonstrate they are true contractors and the platform exercises at least the same, if not more, control than an employer.”

The issue of workers compensation was outlined in the tragic testimony of Lihong Wei, the widow of Xiaojun Chen, a delivery worker who was killed in an accident while working for Hungry Panda.

Chen was the sole provider for his family living in China while he worked in Sydney. His status as an independent contractor meant Hungry Panda was not obligated to provide compensation for Chen’s death at work.

“How can our family survive?” Wei asked when she appeared in front of the inquiry on Monday.

“My parents are both in their 60s. My father in law is in his 70s and my two children are underage. I am the only one they can rely on.

“According to my current physical and mental status, I cannot take on any job [at the moment].”

Hungry Panda paid for Wei to fly to Australia to collect her husband’s ashes but she does not know what to do when she returns home next week.

“My children pretty much rely on me for their daily life and study,” Wei said. “I don’t know how we are going to live our life.”

Are changes coming?

Chair of the select committee Labor MP Daniel Mookhey said he wants to see a “future-focused reform agenda” come out of the ongoing inquiry.

“More people are turning to the gig economy for work,” Mookhey said.

“They are trying to survive the sharpest economic downturn in NSW in living memory."

“These people deserve the same rights as every Australian worker: a decent wage, proper entitlements, and protection from unsafe and dangerous work.”

The NSW Department of Premier and Cabinet (DPC) does not share Mookhey’s optimism, however, noting that the relevant legislation, the Independent Contractors Act 2006, are Commonwealth law.

“Consequently, any State laws seeking to regulate workplace arrangements for independent contractors, and by inference gig economy workers, would be vulnerable to constitutional challenge,” the DPC said in its submission.

“The NSW Government notes that any change to the current legislative framework is not solely a matter for the NSW Government and as such would require extensive consultation with the Commonwealth.”

A similar problem was identified by the Victorian government’s inquiry into the on-demand workforce which handed down its findings in July.

The Victorian inquiry, while recommending better clarification of work status for independent contractors among other reforms, recognised the importance of the federal government in creating meaningful changes for gig workers.

“It was the universal view of those participating in the Inquiry that any change should be led nationally,” the Victorian report said.

“Reforms confined to a single state risk creating yet more complexity and inconsistency, and could impose an unnecessary regulatory burden on national businesses.”

In the US, Californians last week voted in favour of a proposition that allowed companies like Uber and Lyft to keep classifying their workers as independent contractors, thus making them exempt from a state law requiring the companies to pay for benefits like healthcare and insurance.

Uber and Lyft’s share prices each rose by more than 10 per cent on the day of the vote.