Food and on-demand delivery drivers in the gig economy will now have a legally enforced minimum wage of $31.30 per hour, after the Fair Work Commission approved a landmark safety net for hundreds of thousands of workers.
After more than four years of negotiations between the Transport Workers Union (TWU), Uber Eats and DoorDash, the minimum standards order proposed by the three organisations was approved by the commission late on Tuesday. It’s set to come into effect from Monday, August 17.
The $31.30-per-hour rate is higher than Australia’s national minimum hourly wage of $26.44. Drivers and riders can earn more than that, depending on which platform they work for and how many deliveries they make during a shift. The lack of penalty rates, super contributions, paid leave, workers compensation, as well as petrol or charging costs and vehicle wear and tear are all reasons the union says justify a safety net above the economy-wide minimum wage.
Crucially though, the minimum hourly rate only covers times when a worker has been assigned or accepted a job and is either on their way to collect the food, wait for cooking or preparation, or drop it off a delivery. Downtime in between jobs is not covered.
Platforms will be responsible for providing personal accident insurance for drivers and riders, with the laws covering both those using cars and bikes to deliver. Workers, meanwhile, will be responsible for taking out third-party insurance in the event of a collision, which damages another vehicle.
The years-long negotiations have led to concessions from both sides, sources with knowledge of the situation said. Uber and other gig economy platforms have long sought to avoid any deals that could disrupt their business model, which treats their drivers as independent contractors rather than employees.
Meanwhile, worker advocates such as the TWU have sought legal recognition that gig economy workers should receive the same rights as employees, something the food delivery firms had been opposed to due to the added expense of obliging with employee rights and conditions.
In a joint statement, the TWU, Uber and DoorDash said the agreed minimum pay order “establishes robust, minimum standards for on-demand delivery people […] without capping how much they can earn”.
The agreement also provides benefits such as personal accident insurance and a clearer dispute resolution process, they said.
“Importantly, while it provides an industry-wide standard and safety net, it preserves the independent, flexible nature of platform work that on-demand delivery workers value most,” the statement said.
TWU national secretary Michael Kaine praised the deal, saying “gig workers in Australia were left outside of our workplace systems for far too long”.
“The world is looking on as gig workers in Australia win new rights and protections that will change their lives, after years of campaigning for a better industry,” he said.
Uber Eats boss Ed Kitchen said the agreement was a “modern reform for a modern way of work that proves fair standards and flexibility can co-exist”.
For DoorDash’s head of policy Maggie Lloyd, the deal “marks a defining moment for Australia’s on-demand economy and for the thousands of workers who deliver for Australian families and businesses every day”.
Employment minister Amanda Rishworth said the minimum standards order had been made possible by the Albanese government’s 2023 Closing Loopholes reforms, which paved the way for the commission to set such standards for the gig economy.
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Elias Visontay is a National Consumer Affairs Reporter at The Sydney Morning Herald and The Age.Connect via email.From our partners
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