The Gig Economy Exemption: Why Food Delivery Riders Aren't Employees
By Direct Democracy
The Riders Delivering Your Dinner Don't Have Basic Rights
Next time a DoorDash or Uber Eats rider pulls up to your door, consider this: the person who just navigated peak-hour traffic on a bicycle or scooter to bring you dinner is almost certainly not entitled to minimum wage, paid sick leave, superannuation contributions, or workers' compensation if they're injured on the way.
They are classified as independent contractors - small business owners, in the eyes of the law - despite the fact that they can't set their own rates, can't negotiate their terms, can be deactivated from the platform at any time without explanation, and depend on algorithmic management for every aspect of their work.
This is one of the most consequential and least-discussed labour policy failures in modern Australia.
What the Law Actually Says
Under Australian law, workers are either employees (covered by the Fair Work Act, entitled to the National Employment Standards, award wages, super, and so on) or independent contractors (essentially running their own business, responsible for their own tax, insurance, and expenses).
Gig economy platforms - Uber Eats, DoorDash, Menulog, Deliveroo - have structured their business models around contractor classification. Because riders are technically free to log on and off when they choose, the platforms argue there is no "obligation to work," which has historically been a key test of employment.
The Fair Work Commission and courts have, in several cases, upheld this classification. In 2021, the Full Federal Court found that Deliveroo rider Diego Franco was not an employee, despite working almost exclusively for the platform. The decision turned on technical contractual language rather than the reality of his working life.
The Albanese Labor government passed the Fair Work Legislation Amendment (Closing Loopholes) Act in 2024, which created a new pathway for gig workers to access minimum standards. But here's the catch: it doesn't automatically reclassify anyone as an employee. Riders must still be covered by a "road transport" industry standard, and enforcement depends on the Fair Work Commission setting minimum rates - a process that is slow, complex, and easily challenged.
The Human Cost
The stakes here are not abstract. Since 2017, at least 12 food delivery riders have been killed on Australian roads, with many more seriously injured. A 2020 report by the Transport Workers' Union found that some Sydney riders were earning as little as $10–$11 per hour after expenses - well below the then-minimum wage of $19.84 (now $24.10 per hour as of July 2024).
Because they are contractors, riders must cover:
- Their own bike or scooter purchase and maintenance
- Their own insurance (most personal policies don't cover commercial delivery use)
- Their own income protection if injured
- Their own superannuation (the 11.5% employer contribution simply doesn't exist for them)
A rider earning $25 per active hour might actually net closer to $15 once these costs are factored in - and that assumes consistent work, which the algorithm does not guarantee.
Who Benefits From Keeping Things This Way?
Let's be direct about the incentives here.
| Stakeholder | What they gain from contractor classification |
|---|---|
| Gig platforms | No super, no leave loading, no unfair dismissal liability - massively lower labour costs |
| Institutional investors | Higher profit margins and faster growth metrics |
| Major political donors | Uber, DoorDash, and Deliveroo all lobby actively in Canberra |
| Consumers (short-term) | Artificially low delivery fees subsidised by worker exploitation |
The platforms have spent millions on lobbying and public relations to resist reclassification. They routinely argue that flexibility would disappear if riders became employees - a claim that evidence from other countries does not support. The UK Supreme Court ruled in 2021 that Uber drivers are workers entitled to minimum wage and holiday pay, and Uber has continued to operate profitably there.
Both the Coalition and Labor have been slow to act. The Howard and Abbott-era governments actively expanded contractor exemptions. The Rudd and Gillard governments reformed some elements of the Fair Work Act but did not anticipate the platform economy. Even the current Labor reforms, while an improvement, were substantially watered down after industry lobbying - the original bill included stronger protections that were removed before passage.
Why This Policy Persists Despite Being Unpopular
Polling consistently shows that most Australians believe gig workers should have access to basic employment protections. A 2023 Australia Institute survey found that over 70% of respondents supported minimum pay standards for delivery riders.
So why hasn't policy caught up with public sentiment?
Because the people who benefit most from the status quo have disproportionate access to the political process. Platform companies have professional lobbyists, donated to party campaign funds, and can afford lengthy legal battles. Individual riders - often recently arrived migrants, international students on visa conditions, or workers with limited English - have almost no comparable political influence.
This is the fundamental problem with representative democracy as currently practised: the voices that reach elected officials are not a fair reflection of the Australian public.
What Would Happen If Voters Decided Directly?
If Australians were asked directly - through genuine participatory mechanisms - whether delivery riders should earn at least minimum wage and have access to basic protections, the answer would almost certainly be yes. The public already believes this. The gap is between what people want and what the political system delivers.
Direct Democracy exists precisely to close that gap. When members vote on policy directly, and elected representatives are bound to act on those votes, donor influence and backroom lobbying lose their power. The question becomes not "what did the industry ask for?" but "what do the people actually want?"
The gig economy exemption is a case study in how a policy that serves a narrow corporate interest can persist for years - not because it's popular, not because the evidence supports it, but because the people harmed by it don't have a seat at the table.
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