This is the real reason Just Eat and Uber are suddenly so keen on better perks for their workers

Regardless of the suspect motives of big companies on both sides of the Atlantic, says Hamish McRae, we urgently need to adapt labour legislation to the reality of changing work practices

Uber faces successive challenges from California to London that its drivers are really employees and should get full employment rights (PA)

One of the many unfair elements of the blow that coronavirus has done to our economies has been the impact on gig workers. For some (those delivering meals to homes, for example) there has been a boom in demand. But for most, from taxi drivers in the big cities to the vast swathe of people working in the entertainment and hospitality industries, it has been a catastrophe. The slow struggle back to the new normality will leave many behind.

But it is also an opportunity to rethink the job contract, and in particular to break down the barriers between full-time salaried employment and part-time self-employed work – making each fairer as a result.

Two examples from different sides of the Atlantic in the past few days show some new thinking as to how this might be done. In the US, Dara Khosrowshahi, the chief executive of Uber, has argued that gig economy firms should be required to create benefits funds to give workers cash they can use for perks they want, such as health insurance. In the UK, Jitse Groen, who heads Just Eat Takeaway, has gone further. He wants to bring the group’s gig workers in Europe on as staff over the next couple of years, and will then look at the position of workers in Grubhub, the US business that they have just taken over.

Those of us who have reported on business for many years know that when the bosses say they need to treat workers better you should look for the story behind those words.

In the case of Uber, it is, in my view, glaringly obvious. The company is under attack across the world, with successive challenges from California to London that its drivers are really employees and should get full employment rights. Khosrowshahi has warned that Uber may have to shut down for several months in California if the current court ruling that its drivers are employees is not overturned. The case brought by Transport for London against Uber goes to the Supreme Court next month. It is over safety, but the court is expected to rule on whether its drivers should still be classified as contractors or whether their contracts are more akin to employment.

As far as I’m concerned, it’s hard not to see Uber’s chief executive as trying to head off these challenges to its business model, rather than discovering a sudden need to offer drivers a better deal.

In the case of Just Eat, the motivation appears to be rather different. Jitse Groen is a Dutch billionaire who has assembled the largest food delivery service outside China. Among other deals, his company Takeaway bought its German rival Delivery Hero two years ago, as well as the UK group Just Eat earlier this year, and in June the US Grubhub.

It is an astounding achievement. But if you are the dominant player, one of the ways you compete is by making it hard for smaller rivals to match your terms.

Remember how Henry Ford suddenly doubled his workers’ pay to $5 a day in 1914, famously saying that he wanted them to earn enough to buy his cars? Doubtless, he did, but actually he wanted both to cut staff turnover, which had been very high, and lure away the best workers from his weaker rivals, thereby forcing them to increase their wages too. Oh, and by the way, that $5 a day was half pay and half bonus. To get the bonus, workers and their families had to submit to various conditions – for example, if their wives worked outside the home, they didn’t get it.

I’m sure Groen is genuine in wanting to extend worker rights to his gig staff, but the flip side of the employment contract is the requirement to fit in with the employer’s terms. This is fine for many people, but for others, the freedom to work when you want to and in the way you want offsets the advantages of the monthly salary. And self-employment in the UK is growing steadily. At the end of last year, there were more than 5 million self-employed, more than 15 per cent of the workforce, up from 3.2 million in 2000. Not everyone wants to be self-employed but it seems a clear majority do.

So the aim of legislation should not be to force Uber drivers or Just Eat couriers to become employees if they don’t want to. If the companies they work for want to improve the terms and conditions that is fine. Nor should disguised employment be permitted, where people are in reality employed but are legally freelancers. That is an abuse of power. Rather we should, on both sides of the Atlantic, adapt labour legislation to the reality of changing work practices and changing choice.

The entire developed world is in the middle of a huge experiment: how do you restructure everything when many of your people are working from home? The obvious direction will be for many people to move towards a hybrid model, halfway between full-time employment and complete self-employment. It will need decency and discipline on both sides to make it work.