In recent years, the growth of the gig economy has led to the emergence of app-based transport services like Uber and Bolt. The advent of these apps on the shores of Africa has brought several gains and misfortunes. These platforms have not only revolutionized the transportation sector by offering affordable, efficient, and convenient services to millions of people across the country but have also brought a myriad of problems ranging from its exploitative practices, occupational hazards, lack of job security and government exploitation.
Workers in the informal sector, such as app-based drivers, are frequently excluded from the right to collective bargaining and the freedom to organize unions, despite these rights being legally protected. In response, some app-based transport workers in Nigeria started to unionise in a bid to demand better working conditions, pay, and benefits. In this article, we will analyse the impact of the unionisation of app-based transport workers in Nigeria.
Unionisation in the gig economy is a relatively new phenomenon, however, it is gaining momentum around the world. In January 2023, it was announced by the Federal Ministry of Labour & Employment that it has recognised the Amalgamated Union of App-Based Transport Workers in Nigeria (AUATWON) as a trade union. The recognition of AUATWON endows it with the ability to play an influential role in negotiating the terms and conditions of drivers working for Uber, Bolt and other app-based transportation companies in the country. This also covers drivers who transport food and passengers or engage in other services, while also giving it all rights and privileges applicable to Trade Unions in the Trade Unions Act. With this approval, AUATWON becomes the first government-approved trade union for e-hailing drivers in Africa, bringing into existence the rally and call for an app-based transportation union since 2016.
The need to unionise app-based drivers started in 2016 when Uber reduced the income of drivers by 40% without consulting them or even informing them about it. App-based transport workers have since 2017, taken steps towards creating a Union, with the formation of the Professional E-hailing Drivers and Private Owners Association of Nigeria (PEDPAN), National Coalition of Ride Sharing Partners (NACORP) and National Union of Professional App-based Transport Workers (NUPA-BTW). These different bodies metamorphosed into the Amalgamated Union of App-Based Transport Workers of Nigeria (AUATWON), and the reason for the merger was that the app-based companies had leveraged on the divide-and-rule methods to subjugate drivers for years. These unions aim to represent the interests of app-based transport workers and negotiate with platform companies on their behalf.
Unionisation may be effective in addressing some of the issues facing app-based transport workers, but it may not be enough to solve the underlying problem of the fragmentation of the gig economy
Issues necessitating the advocacy for the app-based transportation union in Nigeria
One of the main issues that app-based transport workers face is low wages. It is a fact that app companies usually charge up to 25% commission on trips where the set prices are without recourse to the drivers. Another important issue that drivers face is a lack of insurance and other assistance programs. As a result, the drivers and dependents are at risk of losing their source of income if the driver is involved in an accident, robbery attack or murdered while on the job, hence, some drivers advocate for job status. Other issues include job insecurity, poor working conditions and lack of collective bargaining power. A conglomerate of these issues underlies the emergence of unionization in this sector.
Benefits of the unionisation of the app-based transportation
It is believed that unionisation will help app-based transport workers to negotiate for better pay. In 2020, PEDPAN reached an agreement with Bolt Nigeria to increase fares by 50% to address the issue of low pay. The agreement also included provisions for insurance, pension, and health benefits for drivers.
There is also the benefit of giving app-based transport workers a collective voice to address other issues affecting their livelihoods. For example, some platform companies have been accused of unfair deactivations and suspensions of drivers without proper justification. Unionised workers can raise their concerns with platform companies and demand more transparency in the deactivation process. Additionally, the AUATWON has advocated for better safety measures for drivers, such as improved background checks for passengers and in-app panic buttons.
Unionisation may be effective in addressing some of the issues facing app-based transport workers, but it may not be enough to solve the underlying problem of the fragmentation of the gig economy. Platform companies operate in different cities and regions with varying regulations. This makes it difficult for unions to negotiate with platform companies on a national level. Unions may have to negotiate with each platform company separately, which can be time-consuming and resource intensive.
Legal issues on the unionization of app-based transport workers
As much as it is a landmark decision for the Federal Ministry of Labour & Employment in making a continued global journey to formalise the informal sector, the actions have raised core legal issues and did not address the issue of classification of app-based transport workers as independent contractors rather than employees.
The Trade Union Act provides that an application for the registration of a trade union shall be made to the Registrar and shall be signed by at least fifty members of the union. The Act further defined a worker to mean any employee, that is, a member of the public service of the Federation or a State or any individual (other than a member of any such public service) who has entered into or works under a contract with an employer, whether the contract is for manual labour, clerical work or otherwise, expressed or implied, oral or in writing, and whether it is a contract personally to execute any work or labour or a contract of apprenticeship.
This issue is more apparent in the term of use of the Uber platform, where the company stated in paragraph 2 of the Uber B.V Terms and Conditions that users acknowledge that Uber does not provide transportation or logistics services or function as a transportation carrier and that all transportation or logistics services are provided by independent third-party contractors who are not employed by Uber or any of its affiliates.
The law has further provided that upon the registration and recognition of trade unions under the Act, the employer is mandated to make deductions from the wages of every worker who is a member of a trade union to pay contributions to the trade union and remit such deductions to the registered office of the trade union within a reasonable period. This raises an important question of who the employer is in this case, whether it is the app-based companies or the drivers themselves who have been constantly labelled as independent contractors.
This action has also questioned the general principle of collective bargaining which constitutes an important means by which workers seek to satisfy their economic and social interests. The Nigerian labour laws have provided for automatic recognition of trade unions for collective bargaining purposes, which means that employers must recognise registered trade unions in their establishment and bargain with such unions in their bid to safeguard their economic interests in employment, this is also coterminous with the duty to negotiate with it and conclude agreements. Generally, a union cannot exist without an employer to bargain with, which begs the question of the practicability of collective bargaining in this circumstance.
Some might argue that the recognition of the union may trigger a situation of deemed employment between the app-based companies and the drivers. However, the employment relationship remains a matter of proof and is highly dependent on facts showing control. The common denominator in every contract of employment is that they all have terms and conditions which regulate the employment relationship such as terms on determination, notices, wages and more, and this is missing in this situation. To address these budding issues, it is advised that a legal framework governing the gig economy be enacted to bring app-based drivers within the purview of workers as defined by the Trade Union Act.
Notwithstanding the issues raised by the unionisation, it is recommended that app-based companies should:
1. Maintain a healthy relationship with their workforce and avoid labour disputes by engaging with the established union to understand their concerns and address them satisfactorily.
2. Review their working conditions and ensure it is fair, safe and in compliance with the labour laws. They should also offer fair wages and reduce the commission rates.
3. Provide job security by offering long-term contracts, as this will help reduce the risk of disputes and also promote a stable workforce.
4. Seek legal advice to ensure that they comply with Nigerian labour laws and regulations. This can help prevent labour disputes and promote a healthy working relationship between the company and its workers.
The unionisation of app-based transport workers in Nigeria marks a significant milestone in the fight for workers’ rights in the gig economy. It also promises the potential of a positive impact on their working conditions, pay, and benefits, as unionised workers should be able to negotiate fair working conditions and structures. App-based companies should seek to implement the recommendations stated here, particularly seeking legal advisory, as this will help them avoid labour disputes, promote a stable and productive workforce, and ensure compliance with Nigerian labour laws and regulations.
Chiemeka Ohajionu is an Associate in the Firm’s Dispute Resolution Department, while Kolajo Onasoga is an Associate in the Firm’s Transportation Sector.
Stren & Blan Partners is a full-service commercial Law Firm that provides legal services to diverse local and international Clientele. The Business Counsel is a weekly column by Stren & Blan Partners dedicated to providing thought leadership insight on business and legal matters.
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