May 2018

The Gig Economy: the good, the bad and the downright unregulated

Authors: Adam Cutri & Claire Limbach

“This is Airtasker. Just post your task you need help with, choose the right person for the job and wait for the task to be done.” But what happens when the task isn’t done, what happens when you no longer feel ‘Like a Boss’ and start to feel ‘at a loss’ because what you had contracted for was not what was received?

This is the first of a two part series focussing on the gig economy and its key stakeholders; the job poster or person requesting the services and the service provider.

For those of you not familiar with the term gig economy, the gig economy is an environment where people or organisations promote a specific task, often short in duration to the market and allow individual freelancers or service providers to accept that one off task. The most common platforms for the gig economy are those such as Airtasker, Oneflare, ServiceSeeking and hipages.

For most of the platforms users provide a description of a task they wish to have completed and an amount they would be willing to pay. This is then published on the various platforms and service providers can then elect to accept the offer to undertake the work or seek to negotiate the services and the remuneration. If the parties agree, an agreement is formed between them for the provision of the services.

From a legal point of view, there is nothing uncommon in this process and the principles of contract law would apply. There is an offer made by the job poster, acceptance by the service provider and there is consideration in the form of the money payable by the job poster following completion of the works by the service provider.

Reading the brief overview above, one might think, what can possibly go wrong? You can finally get someone else to do all those chores that your better half has been hounding you to do weekend after weekend that you keep putting off. But as a job poster, what happens when your plumber who turns up to fix your leaking toilet, is not licenced and something goes wrong? What is your recourse? What is your protection under the terms and conditions of the platform service? What is your protection under the Australian Consumer Law?

Faulty Workmanship

Most of the platforms contain terms and conditions which explicitly state that they do not provide any warranties for services provided by the service providers. They require the service provider to warrant that they are suitably qualified, or if required, suitably licenced. With that in mind, when something does go wrong, the only recourse the job poster is often left with is to bring a claim against the service provider personally and not against the platform.

This means in order to recover your loss, you would make a claim for a breach of one of the statutory warranties under the Australian Consumer Law. Most likely you would make a claim for a failure to comply with the guarantee as to due care and skill and fitness for a particular purpose. Both of these provisions, sound in damages and would allow you to recover the difference over and above the amount paid for the service.

The difficulty with this course of action is that in order to commence those proceedings to recover the loss, the job poster must have specific information about the service provider. They need to know their full name and address for service of any process, something which is not always provided through the service platform.

Again most of the platforms seek to import into their terms and conditions an attempt to limit the liability for any consequential losses in their entirety and further seeks to set a limit for a claim to the amount it cost for the service to be undertaken. Now, the cost of getting that plumber to connect the dishwasher might have been nominal and the damages astronomical.

Breaches of confidentiality

Lawyers practising within Australia are firstly; licenced and secondly; have specific obligations to their client to act in their best interest and to maintain their confidentiality. In Australia these specific obligations are governed by the Uniform Legal Profession Regulations.

In circumstances where the platforms do not themselves provide any warranty that the service provider on the other side of the screen is licenced, how do you know that those obligations will be complied with? The short answer is, you don’t.

We recently had a situation where a client of ours received a letter of demand purporting to be from a solicitor. Upon responding to that demand, we were advised that the legal representative was not a solicitor, but a university student and that he did not have any further instructions as he merely responded to a job poster’s request for a letter of demand.

So far, so good right? That was until about two weeks later, when that service provider sent a further email to our firm indicating that:

  1. A dispute had arisen in respect of his payment;

  2. He no longer wished to assist the job poster; and

  3. The job poster had no evidence to support her claim against our client; and

  4. He was willing to provide evidence in support of our client’s defence. Such evidence included information which was provided in confidence for the purposes of issuing the letter of demand to our client. 

Needless to say, the job poster’s claim was materally prejudiced by the receipt of this information by our client.

With all of the above issues in mind, as a job poster, you need to be aware that sometimes the gig economy can be good. For example, it can be good for picking up a sofa and having it delivered or good for getting your lawn mowed. But you must always keep in mind given the unregulated nature that it can also be bad. Bad when the work that you're contracting out is normally work completed by someone who has a specific form of training and is licenced to undertake that work and more importantly, are generally insured for damages arising our of their work.

Stay tuned for part two of this series focussing on the service provider, whether they are actually an employee of the platform and their potential liability when things go wrong.