[Rider Economy] Despite Promoting the 'Four Protection Laws'... Both Riders and Industry Express Dissatisfaction

Ruling Party and Government Push 'Four Laws to Protect Platform Workers'... Proposed by Jang Cheol-min and Yang Gi-dae
Riders Oppose Due to Unresolved Worker Status... "Insufficient Subordinate Laws"
Platforms 'Concerned' Over Repeated Regulations... "Innovation Business Shrinks"

[Image source=Yonhap News]

[Asia Economy Reporter Junhyung Lee] As the labor structure is reorganized around platforms, laws to protect platform workers such as delivery riders are being introduced one after another. However, the reactions from both riders and platform companies are negative. Riders point out that the laws fail to resolve the core issue of ‘worker status’ surrounding platform workers, while companies worry about a slowdown in growth.

The Ministry of Employment and Labor is promoting the ‘Four Laws for the Protection of Platform Workers’ in the form of parliamentary legislation. This is due to the rise of platform labor as another pillar of our economy, with an estimated 1.8 million platform workers nationwide. The ministry chose parliamentary legislation because it generally leads to faster processing and implementation than government legislation. The ‘Platform Workers Protection Act’ and the ‘Employment Security Act Amendment’ proposed by Democratic Party lawmaker Jang Cheol-min in March served as the starting signal. Two more bills, the ‘Basic Employment Policy Act Amendment’ and the ‘Basic Labor Welfare Act Amendment’ proposed by Democratic Party lawmaker Yang Ki-dae last month, followed. A Ministry of Employment and Labor official stated, "(The four laws) could be submitted to the National Assembly plenary session as early as this month."

The core is the Platform Workers Protection Act. This bill contains provisions that directly protect platform workers. Although the Employment Security Act Amendment mandates prior notification of fees, it only goes as far as creating a fair contract environment. Yang Ki-dae’s bill serves as a foundation for policies related to platform workers. According to the Platform Workers Protection Act, platforms must provide workers with a written contract specifying fees and other details. Reasons for contract termination must also be notified in writing at least 15 days in advance. Additionally, companies must inform workers about the allocation of tasks, compensation, evaluation methods, and criteria, and negotiate these if requested by the workers.

On the 2nd, a delivery worker recruitment notice was posted at a local center of a delivery agency in downtown Seoul. As the novel coronavirus disease (COVID-19) resurges, the volume of delivery orders has surged, causing ongoing difficulties in securing delivery workers. According to Baedal Minjok, the total number of orders during the last week of August, from the 24th to the 30th, when COVID-19 spread was severe, increased by 26.5% compared to the last week of July (20th to 26th). Photo by Kim Hyun-min kimhyun81@

Riders Themselves Oppose... "Fails to Resolve Worker Status"

Riders, who are the intended beneficiaries, are opposing the bills. The labor sector has been negative since the government announced the blueprint for related laws at the end of last year. This is because the bills do not mention the worker status of riders. Worker status is directly linked to criteria such as exclusivity for industrial accident insurance (the degree to which labor is provided to a single employer), which can determine riders’ treatment, according to industry explanations. The chairman of the Great Rider Union Coupang Council said, "(The Platform Workers Protection Act) faced opposition from the Korean Confederation of Trade Unions and others from the moment the bill was introduced," adding, "If the worker status issue is not addressed, it will ultimately be a superficial measure."

This is why some complain, "Isn’t this a second Labor Standards Act?" Shin In-soo, head of the Korean Confederation of Trade Unions Legal Office, explained, "(The four laws) are insufficient subordinate laws based on the premise that platform workers cannot be considered workers under the Labor Standards Act," adding, "They define platform work as simple mediation, which raises concerns that employer responsibilities for employment and industrial accidents may be exempted." Shin explained that creating a special law exclusively for platform workers already pushes riders and others into a ‘third category’ that is neither self-employed nor workers.

There are also criticisms that the bill’s scope is too broad, targeting ‘broad platform workers,’ which reduces specificity. According to the Korea Labor Institute, ‘broad platform workers’ number about 1.79 million. This includes not only riders but also freelancers and special employment workers such as webtoon artists who find work on platforms. ‘Narrow platform workers,’ who receive tasks directly from platforms, number about 220,000. Considering that riders are estimated to be around 200,000, most narrow platform workers are riders. Park Jung-hoon, chairman of the Rider Union, said, "It is concerning to be included in a comprehensive bill whose specific details are unknown," adding, "If broad platform workers are grouped under one law, it will be difficult to properly protect riders."

Platform Companies Also ‘Concerned’... "Trade Secret Infringement"

Platform companies are struggling to prepare countermeasures. If regulations are introduced one after another, costs will increase and business uncertainty will inevitably grow. It is also expected that capital-deficient startups will be pushed out of the market, solidifying the dominance of large platforms. An industry insider explained, "The more regulations there are, the more innovative business models will be suppressed," adding, "If regulations are uniformly applied regardless of company size, small startups will be cut off before they can even gain competitiveness."

One of the provisions the industry fears most is Article 8 of the Platform Workers Protection Act. According to this article, platforms must disclose major factors affecting fees and evaluation criteria upon workers’ request. However, disclosure obligations are exempted if it is recognized that disclosure would significantly harm the business operator’s interests. The industry argues that the term ‘significantly’ is vague, which could limit the trade secrets exempted from disclosure obligations. It is explained that such terms tend to be narrowly interpreted legally. Kwon Se-hwa, head of policy at the Korea Internet Corporations Association, said, "There will practically be almost no information exempted from disclosure obligations," adding, "It is natural not to disclose trade secrets or matters that cause management issues."

Experts emphasize that a differentiated approach considering platform characteristics is inevitable. Professor Park Ji-soon of Korea University Law School said, "Applying the same laws as traditional labor methods to new labor provision methods based on platforms is unreasonable," adding, "However, establishing a social safety net that guarantees basic rights as ‘professionals’ working is an urgent task."