What does Uber have in common with sports governing bodies?
A term that’s been crunched recently by lawyers and economists in Europe and throughout the world is the Uberisation of work. This refers to the phenomenon in the modern economy where members of various professions don’t work for employers as such but provide services to clients as independent contractors via a range of online platforms. The term takes its name from the well-known ride-hailing app, but similar platforms function in other industries.
Uberisation has pluses and minuses. On one hand it releases workers from the “authority” of employers. It makes them independent participants in commerce who are to some extent their own ship, rudder and sailor. They direct and manage their own fate.
These advantages should not be overlooked. It’s not just an economic process. As Milton Friedman wrote, economic freedom precedes political freedom. If people are given greater economic liberty and it makes them free participants in commerce, responsible for their own fate, they typically soon become aware and responsible citizens. Thus the emancipation of work resulting from Uberisation may greatly strengthen the tissue of the civil society.
On the other hand, Uberisation of work carries serious dangers. The micro entrepreneurs who are its product are essentially economic plankton. They can become food for economic whales—first and foremost for the platforms that are essential for operating their micro businesses. These platforms often act in relation to them from a position of economic superiority (but not necessarily a dominant position in the traditional antitrust sense).
Protection of dependent self-employed as workers in the broader sense
There is a lot of talk about the need to protect “Uberised workers,” i.e. self-employed persons operating under conditions of economic dependence on one strong partner.
Some argue that although such persons conduct commercial activity in the form of self-employment, they should also be recognised as workers (persons performing gainful work) in the broader sense, and that at least some of the guarantees enjoyed by employees should be extended to them. Hence, for example, recent changes in law such as the amendment of the Trade Unions Act pursuant to a ruling by Poland’s Constitutional Tribunal. Various initiatives are arising at the European level. An example is the European citizen initiative #NewRightsNow, which aims at winning the right to minimum fair pay for “Uberised workers,” as well as the recently adopted proposal for a Directive on transparent and predictable working conditions in the European Union (2017/0355(COD)).
Protection of dependent self-employed as businesses
Meanwhile, work is also underway on regulations that would protect Uberised workers as businesses, guaranteeing fair rules for operation of the platform-based economy and protecting the rights of businesses from the weaker side of this sector. Thus a proposal for a Regulation promoting fairness and transparency for business users of online intermediation services has been drafted at the EU level.
This proposal would require online platforms to comply with standards for fair and transparent dealing with businesses using their services to carry out commercial activity. The drafters observe that the owners of platforms often have the power to decide on the fate of businesses seeking to offer products or services via the platform. They de facto control the market for such goods and services and can impact conditions of competition on the market as well as arbitrarily admit or exclude new players, favour some at the expense of others, or impose on them unfair conditions for cooperation.
Thus the draft regulation establishes principles of good governance for digital platforms. It would require platforms to establish clear and non-discriminatory conditions on which undertakings could use their services to pursue their own business. It would require platforms to quickly, efficiently and transparently resolve complaints of denial of access. It would also establish a duty for platforms to appoint and pay for permanent mediators to assist in resolving access disputes, and require platforms to attempt to resolve such disputes in good-faith mediation. It also provides for and stresses the importance of the right of business users of platforms to organise and collectively enforce their rights through professional organisations.
New line of conflict
A social conflict is playing out before our very eyes similar to what occurred at the turn of the 20th century between workers and industrialists. This time the aim is not to protect the rights of workers, but to protect the rights of independent professionals against abuses by partners controlling the infrastructure essential for free exercise of their profession. The legal regime that will be used to resolve this conflict is only now being forged. The concepts for regulating the social relations in the platform economy range from laissez-faire solutions to truly revolutionary ideas, for example for the state to promote digital platforms operating as cooperatives created by Uberised workers themselves.
But similar tensions and conflicts have simmered for years in some traditional sectors of the economy. Sports are an excellent example.
Sports federations as platforms
A sports federation or other institution organising athletic competitions (e.g. a professional league) is a typical example of a platform business, like Uber or Airbnb. Its role is to create the conditions for the actual service providers—players—to perform their service and for the consumers—fans—to use the service. A sports association and the member clubs create a market for sports services performed by athletes and coaches. These groups provide the infrastructure, establish the rules of play, and control access. They organise competitions bringing service providers (athletes and coaches) together with service recipients (spectators).
Like business users of digital platforms, professional athletes are not ordinary workers. They are independent professionals, who independently direct their own careers, pursuing a risky activity requiring significant, long-range and uncertain investments, based on intense competition. Professional athletes are typical freelancers and the masters of their own economic fate. This is true in both individual and team sports.
Nonetheless, like users of digital platforms, they pursue their profession under conditions of strong economic dependence on institutions controlling the essential infrastructure—sports clubs and federations—and require protection against abuses by them. They are equally exposed to abuses on the part of these institutions.
Professionals need protection
On highly developed sports markets, solutions have evolved for protecting the rights of players, i.e. representatives of the fragmented side of the market, which could be carried over nearly unchanged to the world of digital platforms. In the US, where sports are organised differently than in Europe, in a market-driven model, the fight over players’ rights broke out many years ago. Players’ associations won for themselves the position of an equal partner in dealings with federations and leagues—mainly thanks to collective bargaining and activities that could be regarded as “cooperative” (e.g. joint commercialisation of rights to players’ images and the like).
The European sports model is less market-driven. In this model, the rights of players theoretically lie within the domain of sports federations, which should pursue a social function and not a purely economic function. In practice this does not work out so well, as demonstrated by recent notorious scandals and conflicts in the world of sport, bankruptcies of sports clubs, infringement of players’ fundamental rights, and the widespread squandering of the economic potential in certain disciplines, to the detriment of players and providers of various sports-related services. For this reason, in Europe as well, players’ associations are beginning to play an increasingly important role in the sports market. Local examples include the Polish Footballers’ Association and the recently formed Ice Hockey Players’ Association. Internationally, there is the World Players Association, operating under the auspices of UNI Global Union. The Universal Declaration of Player Rights, adopted by WPA, could with slight rewording serve as a Universal Declaration of Freelancers’ Rights or Uberised Workers’ Rights.
In sport, as in the sector of digital platforms, regulations are also being developed imposing duties of good governance on entities creating and controlling the infrastructure necessary for professionals to practise their professions. An example of the first steps in this direction is the Code of Good Governance for Polish Sports Governing Bodies, drafted by the Ministry of Sport and Tourism. Development of this code is a result of the broader EU policy aimed at promoting good governance in sport.
In Poland and many other European countries, the battle for collective rights of players is only beginning as specific disciplines become professionalised. There will be disputes surrounding the integrity and transparency of operations of sports federations and clubs. Fair rules for accessing the sports market will be one front, along with fair rules for competing on the market. On the other hand, there will be disputes over the pay athletes should receive for their work, and combating exploitation. This conflict will bear a striking similarity to the tension arising in the platform economy and gig economy, where the norm is not full-time employment but work from one project to the next.
Stanisław Drozd, adwokat, Dispute Resolution & Arbitration practice, Wardyński & Partners