With nearly 5 million people in the UK now self-employed, we need to find new ways to ensure today’s workers have rights and representation. In the US a model is emerging where unions are coming together with co-ops of self-employed workers to give them control over their work.

The gig economy

The ‘gig economy’ has become ubiquitous. Casual work, temping, zero-hour contracts and diverse forms of self-employment are characteristic of an expanding marketplace of atypical, precarious and increasingly unprotected work.

Under EU regulations temporary and agency staff are entitled as ‘workers’ to sickness and holiday pay, but this is not the case for self-employed freelancers. In the UK today, 4.6 million people are self-employed (15% of the workforce) and they have generated two-thirds of new jobs since 2008.

While a proportion of the self-employed do well financially, they are today the exception. Indeed the stereotype of the self-employed as small businesses is less true than ever before. 83% of the UK self-employed work alone and 70% are living in poverty. Their median annual income has plummeted by a third from £15,000 in 2008 to about £10,000 today (or €12,000). This is below the level when income tax is payable. Low pay however is only part of the picture — an absence of worker rights, as GMB’s recent case against Uber showed, and a lack of support services aggravates hardship and makes matters far worse. Without a regular salary, housing access is limited and rents are often extortionate.

By 2018 more people in the UK will be in self-employment than in public sector jobs. Labour market expert Ursula Huws estimates that up to 5 million people in the UK are currently being paid for work through online platforms. This is rapidly transforming the future of work.

Digital corporations operate to extract value at commission rates of 20% or more via a ‘black box’ system that blocks any direct relationships between producers and consumers. Decision making in respect to pricing and policies are not co-determined and profits are exclusively generated for the platform owners. Command and control is the old name of this new money making game.

The trades impacted are online and off. Alongside Uber, there is a plethora of online labour-sourcing corporations: Deliveroo for takeaway food delivery, Taskrabbit for small jobs, Handy for residential cleaning, Clickworker for “surveys, data management, etc”, MyBuilder for household repairs and improvements, Helpling for domestic help on demand, Axiom for tech-assisted legal services, SuperCarer for social care and Upwork for higher skilled freelancers.

So how can self-employed workers collectively overcome lop-sided risks, heavy overhead costs and secure fair trade terms and protective conditions? This is the question I have been investigating in Not Alone, a piece of research I have co-led for Co-operatives UK and the Wales Co-operative Centre.

A democratic economy

Trade union services for self-employed workers in Europe are both limited and patchy. Organising has been most successful in areas of the digital economy and particularly in the media, the arts and creative industries. This is the case in the UK, Denmark, the Netherlands and Germany. A typical package of trade union services for freelancer workers includes advice, advocacy, legal guidance on contracts, insurance provision, help with debt collection and training.

The Federation of Entertainment Unions is the UK network of trade unions in media and covering journalists, film technicians, actors, musicians, writers, etc. A common union strategy is to secure ‘worker status’ for freelance members and then to negotiate worker rights.

If backed by a trade union, co-operatively owned employment agencies can provide the operational means to achieve this. One example is music supply teachers who, facing rising agency fees in England, formed worker co-ops to market to schools, to handle negotiations and to provide other collective services. The Musicians Union and Co-operatives UK jointly promoted this successful strategy through an organisers’ handbook and more worker co-ops are forming.

Swindon Music Co-operative: a co-op of 50 self-employed teachers creating security for themselves by working together. Image courtesy of Co-operatives UK.

Union co-ops

Crucially, we are seeing union co-ops beating the opposition at its own game. Green Taxis co-op in Denver has expanded its membership in partnership with the Communication Workers of America. This union co-op strategy has led to the development of a highly efficient mobile app. Through the partnership Green Taxis has grown to 800 members, secured 37% of the market in Denver and has rapidly become the largest taxi co-op in the US.

Before Green Taxis was founded as a worker co-op in 2012, most drivers were working for private taxi corporations and paying leasing and other fees to the company of $800 to $1,200 a week. With the help of the trade union, Green Taxi members have co-financed their mobile app and now pay just $80 a week for back office and dispatch services. This represents a 90% plus savings of economic rent otherwise payable to a private corporation.

The success of Green Taxis highlights how worker-owned platforms can be replicated in other cities and for other trades. It is early days but similar union co-op apps for childcare are being jointly developed in Chicago by the ICA Group and Service Employees International Union. A new union co-op app for NursesCan, a home health care service, was launched in south Los Angeles this year.

There is a strategic opportunity to advance the potential for a breakaway play by co-developing union co-op solutions. The ‘cousins’ of the labour movement — trade unions and co-operatives — need to unite their efforts across Europe to unleash economic democracy innovation.

Originally published at Open Democracy.