Work and Pensions Committee 

Oral evidence: Self-employment and the gig economy, HC 847

Monday 6 February 2017

Ordered by the House of Commons to be published on 6 February 2017.

Watch the meeting

Members present: Frank Field (Chair); Ms Karen Buck; James Cartlidge; Neil Coyle; Craig Mackinlay; Steve McCabe; Royston Smith.

Questions 1-141

Witnesses

I: Graham Baines, Courier, Hermes, Steven Rowe, Partner, Uber, and Cain Jones, Rider, Deliveroo.

II: David Dunn, Partner, Uber, Syed Khali, Partner, Uber, and Marc Ramsden, former Courier, Hermes.

III: Jane Cordell, Director, Result CIC, Sara McKee, Founder and Market Innovation Director, Evermore Wellbeing, and Robert Winstanley, Entrepreneur.

Examination of witnesses

Witnesses: Graham Baines, Steven Rowe and Cain Jones.

Q1                Chair: We go through this performance of asking you to identify yourselves for the sake of the record, and then we will begin questioning with Royston. Thank you very much for coming. Graham, might you identify yourself and say who you are, and then we will go down the line?

Graham Baines: My name is Graham Baines. I work for Hermes as a part-time courier. I am also a part-time tennis coach.

Cain Jones: I am Cain Jones. I work for Deliveroo part-time and I also work for Sainsbury’s full-time as a delivery driver.

Steven Rowe: I am Steven Rowe, writer, sometime actor, social entrepreneur, entrepreneur and Uber driver partner.

Q2                Royston Smith: Can I start with you, Graham, and then go along the line? This is a standard question to get a sense of it. Why did you start working as a courier?

Graham Baines: To basically fit with my other job. I used to be a full-time tennis coach and I was finding it tough. I fancied another job to mix in with my coaching, and the Hermes courier job fits that bill. It fits in with my coaching, so I can deliver, I can do my tennis coaching, and that was basically why—for the lifestyle.

Q3                Royston Smith: You can dip in and out as and when it suits you?

Graham Baines: Yes. I can go out delivering for a couple of hours, go and do a tennis lesson, go back out and deliver, go and do another tennis lesson. It really suits my lifestyle and fits in with the coaching.

Q4                Royston Smith: The same question to you, Cain, if I may.

Cain Jones: I think it is the same reason, really. I work for Sainsbury’s as a delivery driver, using their vans, as an employee, and that is very set, so I can’t change that at all. But doing delivery means if I want to work tonight I will do some extra, or if I don’t want to I can stay at home. If I look outside and it is raining, no, I am not going to work. It gives me that freedom to do a bit more when I want to.

Q5                Royston Smith: Steven?

Steven Rowe: I needed something that gave me total flexibility and enabled me to be in control of my own time. The Uber app did that; it gave me total control. It meant I could fit the driving around what I wanted to do rather than the other way round. I have been using it for over four years now.

Q6                Royston Smith: A question to all of you again. Have you worked for other companies, or just the ones you work for currently?

Steven Rowe: I have worked for other minicab companies. The difference is not just that the other minicab companies are totally inflexible, and you have to work a shift system; it is a matter of attitude. The view of any other minicab company I have worked for is that they have one customer, the passenger in the back of the car. The great thing about Uber is it clearly sees that it has two customers. Other companies see the driver as cannon fodder, to be honest. Uber sees the driver as a customer and they are constantly doing things up, grading up and making life easier for us. In over four and a quarter years, in which I have been able to have that view, they have done so many things to make driving an easier experience.

Q7                Royston Smith: You have been with them for four and a half years?

Steven Rowe: I started in November 2012, very soon after they came to this country. Yes, nearly four and a half years.

Cain Jones: I would say the same thing. I have done Sainsbury’s for about three years and that is employed, so that is very set, but doing Deliveroo is very recent and I enjoy it because it is flexible and freedom for me. Based on that experience, I would do other self-employed roles. I would go and join UberEATS and deliver for them if it was that easy.

Graham Baines: I have only worked for Hermes. I have been a tennis coach for about 20 years and have always been self-employed as a tennis coach. I work at David Lloyd as a self-employed tennis coach. The only delivery company I have worked for is Hermes.

Q8                Royston Smith: Notwithstanding what anyone else may say or have feelings on but just you three personally, do you consider yourself to be self-employed?

Graham Baines: Absolutely, yes, and that is the reason I took the job on. I like being self-employed. I am my own boss, I can map my own day out; I am under no pressure. I pick my parcels up and I go and deliver. I can go and do a tennis lesson. I can go home. My mum was ill recently and I would pop and see her and still go back out delivering. I am totally self-employed and, as I said, I have been a self-employed person for 20 years with my tennis coaching. The reason I took the job on is for that flexibility and to be my own boss, and that is what I really enjoy about my job.

Q9                Royston Smith: Cain, from your Deliveroo aspect, obviously, not your Sainsbury’s one, do you consider that to be self-employment?

Cain Jones: Yes, I do. I understand that being self-employed means it comes with risk. If you want to make extra money you don’t have that fallback; if I am off sick then I don’t get paid. I understand that. That is one of the reasons I took it on, because I know that it is all on me. If I want to make more money I work more; if I don’t work I won’t make it, so there is no one else to blame but myself.

Steven Rowe: I have been self-employed for about 40 years now before I dipped in and out of driving. One of the things that attracted me to driving is that the sector has been totally self-employed since time immemorial almost. Since black cabs were driving horses and carts, the whole sector has been self-employed, and that appealed to me because I like being in control of my own life and being self-employed.

Q10            Ms Karen Buck: You are here to speak for yourselves and talk about your own stories, and we are very grateful, but do you consider yourselves to be typical of the group of people you work with in each of the areas where you work?

Steven Rowe: It is difficult to say. My contact with other Uber drivers has been relatively limited at two places. At Uber Christmas parties, which are always very nice for drivers, all the other drivers there seem to be pretty happy. I occasionally use Uber as a passenger and I always chat with the drivers and tell them I am a driver as well. I have never heard anybody who had anything bad to say. My brother is an Uber driver in Manchester and he can whinge for England, and he is happy.

Cain Jones: I would say similar. I talk to a lot of drivers from a lot of companies like UberEATS and Deliveroo and they say similar things. They work as much as they want, and it is almost a competition of who can do the most deliveries in a day. They have their targets they have set, and we compare stories and everyone seems to be happy to just go at it every day and work as much as they can.

Graham Baines: I come into contact with other couriers at sub-depots. I have been doing the job for four years and the couriers that I come into contact with have been doing it for a long time, longer than me, and they all seem to be very happy. Once I leave the sub-depot I tend not to see many other couriers. I see some faces every day but generally don’t chat to them. I generally chat to the people who are in the same time slots as me; they are the ones I have known since I have been doing the job, and they all seem very happy with what they are doing.

Q11            Ms Karen Buck: One of the reasons I asked is that in London—and sometimes that is different from other parts of the country—a lot of the people working in the courier sector I know are in their late teens and early 20s. I am not asking you to speak for them, you can’t, but would their experience be similar to yours?

Graham Baines: Could you just repeat that?

Ms Karen Buck: I was saying that in my experience in London, looking at the people I am watching working particularly in the courier and Deliveroo area, a lot of them are young, in their late teens and early 20s. That is one of the reasons I was wondering whether their experience would likely to be the same as yours.

Graham Baines: The couriers that I generally mix with in my time are probably a little bit older than me. I do know of a younger girl who does it to fit in with her childcare, but generally the ones I know are a similar age to me or a bit older.

Q12            Craig Mackinlay: You all have sort of hybrid lives. Cain, you have proper PAYE employment somewhere; Graham, you have other self-employment; and, Steven, you do a bit of other things as well. Do you think you are typical of most of your type of drivers—they do other things as well—or do you think there are quite a few who just rely on Hermes or Deliveroo or Uber? For some, is that is all they do?

Cain Jones: I would say that from those I meet, a lot of people mix the roles. They do a lot of different companies at the same time. Wherever the job is, they are going to go there. If it is over there, they are going to go there. There are a few I have met who only do one thing, but I think that is more their personal preference. They want to do this one job, stay in this place and not move anywhere, but if you want to get money you need to follow it. That is what most of the drivers are doing, they are just following where the money is.

Q13            Chair: On this top-up arrangement you have for your income, do you regard yourself as self-employed?

Cain Jones: In that sense, yes. The extra stuff I do is self-employed, and I know that is different.

Q14            Chair: In the self-employed role, do you all get the national living wage?

Cain Jones: Not always. If I know it is going to be busy, I will want to work then. If I know it is not, I will choose not to. It just depends on how I manage my own time. If I know it is going to be quiet on a certain day I will just take it as a day off. It is about time management.

Q15            Chair: Does that differ for Steven or Graham?

Graham Baines: I always do well above minimum wage. I know what round I have. I go to the sub-depot and pick up my parcels. I know generally the minimum parcels I will have per day, and I always do well above minimum wage.

Steven Rowe: I do well above minimum wage. I generally pick the hours to work when there is work out there. No complaints there.

Q16            Chair: Could it be different if you had to depend on this as your only job?

Steven Rowe: In terms of income flow, it is my only income flow. The other things I do are more entrepreneurial and hopefully one day will produce larger incomes. It is my only income stream.

Q17            Neil Coyle: Can I just clarify, are any of you getting a financial incentive or payment for being here today on behalf of the companies you are representing?

Graham Baines: No.

Steven Rowe: No, absolutely not.

Cain Jones: I am actually losing money by being here today.

Neil Coyle: Then apologies.

Chair: Can we cover expenses?

Q18            Neil Coyle: Hopefully we can. That would be reasonable. Can I ask about the hours: how many hours are you doing on the delivery side each week and on tennis, Sainsbury’s or I think you said acting?

Graham Baines: It depends on the parcels, but I probably do four to five hours a day of parcels, and I can do three or four tennis lessons a day as well. It is totally up to me. That is what I like about the job. With the parcels, I can take rounds on, take more work on if I want, or I can do less. The numbers I have suit me, and it gives me a decent income with the coaching on top as well. I felt that at my age I wanted that mix of two jobs but still to be financially secure, which I am.

Cain Jones: I do 40 hours with Sainsbury’s, so that is set. If I finish early for Sainsbury’s I don’t get paid for it, so I will leave early, but then I will probably do delivery one or two hours a day in the evening or in the morning, depending on where it fits and if I can fit it in. In a week it is about 10 to 15 hours, rounding up.

Q19            Neil Coyle: Many employers have a 40-hour contract for safety reasons and have a clause in the contract that says about not working for others. How have you got round that with Sainsbury’s? Are they being flexible?

Cain Jones: Yes, because they are two different roles. They are not the same roles, they are very different. They are okay with me working over that as long as it is not excessive and it does not affect my job with Sainsbury’s.

Q20            Neil Coyle: When you work more than 48 hours a week, who do you report to on the working time directive? Do you have to report that to Sainsbury’s?

Cain Jones: Yes.

Q21            Neil Coyle: You do that every time it occurs?

Cain Jones: Yes.

Q22            Chair: Graham, when you say you have a round for Hermes—it is you working for Hermes, isn’t it?

Graham Baines: Yes.

Chair: Are they happy for you to fit that round within the 24 hours so that it is delivered within the day rather than a particular time, so that you can meet what you want to do on your tennis coaching?

Graham Baines: Yes. When we have picked our parcels up for the day, we set our own ETA, estimated time of arrival. We do two-hour slots. Say if I have a lesson at 12 o’clock, I start delivering at 8 am and I set my slots 8 am to 10 am, 9 am to 11 am, and then between 12 and 1 pm, if I am doing a tennis lesson I don’t set that as an ETA. I will restart 1 pm to 3 pm, so it is totally flexible, and that is how I plan my day out. I think it is 8 pm we need to be logged out.

Q23            Neil Coyle: Can I just go to Steven on the hours?

Steven Rowe: On the question about the financial incentive, I just wanted to say the financial incentive for me being here is that I am extremely worried about the future for people like me who rely upon self-employment and the flexibility of Uber. From everything I have read, a small number of people are complaining when the majority of us are happy. I am here trying to protect my future.

On the hours worked, during the week I tend to work from about 7 am to about 10 am and then I will take a break for three or four hours and do other things, and then I will probably work from 4 pm to 7 pm. It is about six hours a day, five days a week, and then I might do a bit on the weekend as well. I probably average about 40 hours a week but it changes from time to time.

Q24            Craig Mackinlay: Cain, I sort of know how your other formulas work. How do you get paid in Deliveroo? Is it per delivery you make or hours you are on site available?

Cain Jones: They have a few different methods. A lot of people get paid hourly and then a drop fee. I am just drop fee. Every delivery I make I get paid a certain amount and that is set, so I know the more deliveries I can make the more I can get paid, which increases my average for the night if I know it is busy.

Craig Mackinlay: I suppose you get the odd tip, I would imagine, as well.

Cain Jones: Sometimes, very rare.

Q25            Chair: Can I ask about your relationship with Jobcentre Plus? Did you find your jobs yourselves, were they advertised, and what help have tax credits or universal credit offered you—or none at all?

Steven Rowe: The only time I have used Jobcentre Plus was before I was involved with Uber, and that followed a period where I had been a full-time dad for five years because my wife became ill and died while our children were young. When that was all finished it was 2008 and it was not very easy, so I was on benefits for three years until about 2011-12 when I started with Uber. So my experience with Jobcentre Plus predates it. I heard about Uber from another driver. Tax credits?

Chair: I wondered whether tax credits or universal credit form part of your lives.

Steven Rowe: No.

Cain Jones: I have never been to Jobcentre Plus to do with this. I met a person who told me about Deliveroo and I thought I would try it. It was very straightforward to sign up. Tax credits and universal credit are not really a part in my life.

Graham Baines: No Jobcentre Plus or tax credits.

Ms Karen Buck: Nobody is getting housing benefit, which is the one that is most likely to have to be re-evaluated with every change of hours? No.

Q26            James Cartlidge: I want to be absolutely clear about this, because we are talking about benefits here—not necessarily just public benefits as in the benefit system. In your opinion the majority of people at Uber are happy with their situation and would not want more security?

Steven Rowe: My limited experience of meeting other drivers was that they were all happy and enjoyed having the flexibility that Uber offered, but it was limited experience.

Q27            James Cartlidge: Can you remind me how many hours of driving, of cabbing, you do for Uber each week?

Steven Rowe: Roughly, on a weekly basis, about 40.

Q28            Neil Coyle: Have you ever met any of those people who would seek a different employment package from Uber?

Steven Rowe: I don’t know how there could be. First of all, it is not employment. I don’t understand how there could be a different employment package. Uber operates a service putting drivers in touch with riders.

Q29            Neil Coyle: There is a court case to settle that distinction, but of those who operate using Uber, have you ever come across anyone at the Christmas party or anywhere else?

Steven Rowe: No.

Q30            James Cartlidge: I always ask my Uber cabbie about it, because it fascinates me, and I would say they are generally dissatisfied, but they accept the reality of the position they are in and the guarantee of business. I get no impression that they would be unwilling to have more security, paid time off or anything like that, given that they are—

Steven Rowe: Then they should go and get a job with somebody in full-time employment, simple.

James Cartlidge: I am delighted that you are so satisfied.

Steven Rowe: Well, I am.

Q31            Neil Coyle: If you were, in unfortunate circumstances, to develop an illness or condition, in other areas of work your employer would have more obligations. Do you not think some people might be entitled to fixed periods or holiday entitlements with someone who has so many operatives as Uber or others?

Steven Rowe: As I said before, I don’t see how that could possibly happen within the industry with the way that Uber works. If you want that type of job security you should not be self-employed.

Q32            James Cartlidge: You are okay with other taxpayers picking up the bill?

Steven Rowe: I am a taxpayer.

Q33            James Cartlidge: I was in a meeting, which is why I was slightly late, so my apologies if this has already been covered. Do any of you have any kind of exclusivity in a contract or anything like that to do this work just for the company that you mainly do it for?

Graham Baines: No.

Steven Rowe: No.

Cain Jones: No.

Q34            Chair: Cain, if you were ill, for example, you would get your pay from Sainsbury’s, wouldn’t you? So there is always some pay coming in.

Cain Jones: Yes.

Q35            Chair: Would that apply to you, Graham?

Graham Baines: I have income protection, so I pay that as a separate policy. If I am ill and I can’t work then I pay into a policy that will pay out, so I am covered on that side.

Q36            Steve McCabe: Would I be right to assume that what I am hearing from all three of you is that the benefits for you of the freedoms that you have with this kind of employment outweigh other potential benefits of contracted employment that has no constraints around it? Is that basically the trade-off that you are describing to us?

Cain Jones: Essentially, yes. I think one of the biggest things people talk about in employment is the pensions, but I know if I wanted a pension I could get one myself privately and pay into that with my own money. I don’t need to have a business or a company doing that. Luckily I kept my private pension from one of my other jobs and continued to pay into it, so that is still happening, but I would not expect any self-employed partnership like Deliveroo to pay in for me because I know that is my responsibility.

Q37            Steve McCabe: The overwhelming thing I think I am hearing—and I can understand why some of my colleagues are asking about the benefits of other kinds of contracted employment—is that you are putting a very high premium on freedom. Am I right to hear that? Is that what you are telling us?

Graham Baines: I think with myself, yes. I have two jobs, and I like that. I don’t think I would want to be tied. Holidays, yes, but I just put extra money away to cover if I want to take a holiday, so I am fine for that. I get cover for my work. I love the freedom of being my own boss, and it suits my lifestyle.

Q38            Craig Mackinlay: You have got income protection insurance—very wise, and I am glad to hear it. If you have gone up to that sort of level of provision for yourself, are you looking after your own pension provision as well and perhaps making sure that your national insurance is up to date so that you will qualify for the state pension?

Graham Baines: Yes. I have pensions. I have an accountant, always have had an accountant, who does my tax every year. I pay national insurance and my tax.

Q39            Craig Mackinlay: You have made your own pension provision on top of state pension?

Graham Baines: Yes.

Q40            Craig Mackinlay: Cain, you said you have an employment one from elsewhere. Are you putting any extra in?

Cain Jones: Yes. I had a pension from an old job and when I left the job I got the option to keep it, so I just continued to pay into it privately. I still pay money into that every month, and I am just using it as a private pension now.

Q41            Craig Mackinlay: Steven, are you?

Steven Rowe: No, it will just be the state pension for me.

Q42            Ms Karen Buck: We have touched on employment insurance. Possibly it is relevant for Steven how you provide for yourself if you are unable to work, but there are also other risks that are associated with employment. Cain, I don’t know if you do your Deliveroo on a scooter. If something happened to that, is it all covered by insurance? Do you make all those arrangements for yourself?

Cain Jones: That is kind of the hard part. With the insurance for scooters, if it does break down it is on me. If it gets stolen, that is on me. There is nothing to fall back on. If I want a backup plan, I need to have my own one. I have a backup plan if my scooter breaks so I still can make the money while it is being fixed.

Q43            Ms Karen Buck: Steven, what is the insurance arrangement for your vehicle?

Steven Rowe: You have to have hire and reward insurance. If I have an accident—well, I drive carefully.

Q44            Ms Karen Buck: Is that package standard for Uber, or do you just research that yourself?

Steven Rowe: No, it is nothing to do with Uber. There are various providers in the market that do hire and reward, which you have to have along with your PCO licence and stuff like that. It doesn’t provide a replacement vehicle in the case of a breakdown or an accident. So far I have been okay.

Q45            Ms Karen Buck: That would just be your risk, and you know that?

Steven Rowe: Yes, absolutely.

Q46            Ms Karen Buck: For the three of you, do you have—or do you think there should be, if there isn’t—guidance and advice from your respective companies that you are working for on all of these different issues of pensions, insurance and employment protection? You are all coming over as very together, very thought-through and very prepared, but if you were 21 and you didn’t know how to navigate the system, is there anything there from the companies, or should there be, or should it just be entirely up to you?

Cain Jones: From my point of view, I think there should be something to help you along. It is very complicated to get into self-employment, the sole trader. It is mind-blowing but there is not a lot of information provided by companies, or the Government, on how to really get into it. I think it should be easier to say, “Sign up for this, sign up for this, and this is everything you need to set your future up”.

Q47            Ms Karen Buck: They don’t give you an introductory pack that says, “You might want to go and think about this, this and this”?

Cain Jones: Not in that sense, no. They might help you get the information from somewhere, but there is no instruction pack to tell you how to get it done.

Q48            Ms Karen Buck: If they did do that, it would be because you happened to be chatting to somebody who feels kind and gives you some guidance?

Cain Jones: Essentially, yes.

Ms Karen Buck: It is not something that is built into the process.

Cain Jones: It is not something that is built in.

Ms Karen Buck: What about Graham and Steven?

Graham Baines: I have been self-employed so long and I know what the situation is with being self-employed. I think it is difficult for a company, when you are self-employed, to start advising you too much, because obviously you are self-employed. Maybe it would be an idea that a pack was put out just to say, “You need to do this, do that and do that” that would make it a lot easier for people to understand.

Q49            Ms Karen Buck: You are not aware that that is done?

Graham Baines: No, I am not.

Steven Rowe: Uber does have, as part of the Momentum package, things like you can get a discount with a company that does your accounts and gives you tax advice. I don’t use that because I have been self-employed for so long that I know what I am doing there. You can also get cheap coffee at Coffee Republic—I use that one—and discounts on a car wash and stuff like that. So there is a package, but that is not coming from Uber. It is coming from somebody who will give you a discount because you are an Uber driver.

Q50            Ms Karen Buck: Even if they don’t tell you how to do it, they don’t say to you that you need to go out and be aware of your tax liabilities, and what happens if you want to make a benefit claim and what happens if you need to cover yourself for insurance?

Steven Rowe: Not that I am aware of, no.

Q51            Chair: Steven, do you have income protection insurance?

Steven Rowe: No.

Chair: Very good. You have your forms and we hope you will fill them in. Thank you very much for coming this afternoon. It has been really helpful.

Examination of witnesses

Witnesses: David Dunn, Syed Khali and Marc Ramsden.

Q52            Chair: Welcome. David, you saw how we begin, so might you identify yourself for the record? We will go down the panel? I hope Peter Jamieson will join us at some stage but if not, that is our loss.

David Dunn: I am David Dunn from Glasgow. I am an Uber partner.

Syed Khalil: I am Syed Khalil from London and I work with Uber.

Marc Ramsden: Marc Ramsden. I used to be a courier with Hermes.

Q53            Chair: Those on the first panel were nominated by the companies. For this group, did we know about you because of other reports that had been done and you filled in questionnaires? David, do you know how we found you?

David Dunn: I think it came through from UHPD, which is a group of drivers, and someone from the parliamentary Committee asked me to come and be part of this.

Syed Khalil: The same thing as David. I had a call from UHPD.

Marc Ramsden: Mine was through I think the Telegraph, which did a story on Hermes and there were some contact details, and I contacted them.

Q54            Royston Smith: I will ask you all this individually, but I will start with you, David. Why did you choose to work for Uber, and what advantages do you see in that?

David Dunn: I was employed and became unemployed through redundancy and looked for something to do. I wanted to become a black cab driver in Glasgow and studied for the exam and passed the Knowledge exam. As I did, Uber had just come to Glasgow, which was just over a year ago. I went and talked to Uber and they told me about the potential earnings that the work could give us, the fact that the executive service was coming; it was a great way to earn money and there were promises for some very good earnings. So I decided not to go down the black cab route and go the Uber route. I went out and purchased a car and started working with Uber.

Q55            Royston Smith: How has that worked out?

David Dunn: Not great. It has got to the stage now that it is very expensive for me to work. The number of drivers now is restricting what you can earn. A year ago there were a lot fewer drivers and there was a lot more work on the road and your wheels kept turning quite a lot. Now it is much slower. There are more drivers out there and you have to work longer hours to be able to earn what you earned before. Don’t get me wrong, I think it is a great platform—it is a super platform for the public, there is no doubt about that. However, for the drivers it is the cheapest form of transport for the public, and therefore our fares are the cheapest, and it is the most expensive booking service for any driver to use. It then becomes expensive for us and cheap for the public, and those two don’t match very well.

Q56            Royston Smith: That is interesting. Syed, can I ask you the same question: why did you start working for Uber?

Syed Khalil: I was a private hire driver before Uber launched in the UK. I was a typical minicab driver who just worked for minicab companies. I started working as a minicab driver in 2009. Before that, the same story—I was redundant and I could not find any jobs, so I thought becoming self-employed was going to be a good option for me, but later on after six, seven years self-employed I realised it is not. When I joined Uber it had recently started working in London, so they called me because they were looking for drivers.

At that time there was not any commission at all. They used to reimburse the commission. Whatever job we did, they used to give us back exactly the same amount to attract more and more drivers. That was a honeymoon period for a very long time, and then Uber started to increase the commission, reduce the fares, deactivate the drivers for small, minor reasons—literally bullying drivers. If a customer said, “The driver did that to me” they could just deduct the money straight away from the money they are supposed to pay us without letting us know. They were doing these types of things for a long time.

Eventually it came to 2016 and for some reason I couldn’t work. I went to the ESA and when the ESA was just about to finish my car broke down and I had no money to pay for my car expenses. I just work on Uber; I don’t rely on any other job. I am not a trainer. I don’t have any other PAYE job. I have long-term kidney and bladder issues as well, and because of that for some reason I couldn’t get a job anywhere, so Uber as a self-employed driver was my last option.

Now basically Uber is my last option for working, because Uber put the fares down to a level that normal minicab companies cannot compete with, so they are losing passengers as well. Before Uber, I used to work at Addison Lee. I worked a couple of years with Addison Lee and at those times before 2013 it was very good. They had good customers, good cash jobs, credit card jobs and account jobs as well. Since Uber came, even companies like Addison Lee and the other big names are struggling as well.

Q57            Royston Smith: You left Addison Lee, presumably, to go to Uber?

Syed Khalil: Yes, exactly, because Uber offered me a better commission, better rates than Addison Lee, so I engaged myself in a contract with car finance. There is nothing part-time in this industry anymore. You have to work 30, 40, 50 hours just to come to the break-even point. I have to pay £360 for my car instalments, which I have been paying for the last three or four years. I have to pay £150-plus private hire insurance. It is a legal obligation; we must have it. Before we start paying commission and picking up one passenger we have a cost of at least £500 a month. That is the fixed cost. It is not including car maintenance or any other things. I work for 90 hours, 80 hours, 60 hours. This is the normal practice in this industry. If you want to make some living you have to work 12 hours a day. That is what they even say.

Royston Smith: Uber says that to you?

Syed Khalil: Uber doesn’t say anything like that, but Uber knows. Uber doesn’t deactivate us, doesn’t stop our app. If I open the app for 20 hours, Uber is okay with this. It is no problem at all. It is a big health and safety issue and we explained it to TfL and to my local MP and nothing happened. We are at the point now where we have to work 80, 90, 100 hours just to earn not even a minimum wage; I would say it is £4, £3, £2 an hour. That is what we take home.

Q58            Royston Smith: We will move on to that later on. Can I ask you, Marc, what made you start to be a courier driver for Hermes?

Marc Ramsden: I was working for one of their rivals when they approached me to work for them, and that is how I came to work for them.

Q59            Royston Smith: You were financially better off, or they said it was anyway, and so you decided—

Marc Ramsden: I thought it might be.

Q60            Chair: Who approached you, Marc?

Marc Ramsden: One of the couriers for Hermes who asked if they could take my number and gave it to one of the field managers who rang me and promised quite a lot.

Q61            Royston Smith: You worked for another company before and then moved and, Syed, you worked for another company before and moved and, David, you were probably going to work for another company and potentially moved, all on the promise that it was a better company to work for. You all worked for companies before. I will start with you first, Marc, and then go down the table. When you were working for Hermes, did you consider yourself to be self-employed?

Marc Ramsden: I couldn’t see anything in what I did that would make me self-employed. I could see the advantages for Hermes, lots and lots and lots of advantages for Hermes, but for us there were not any.

Q62            Royston Smith: The flip-side, then: what were the disadvantages that made you feel like you were not self-employed or you should not be self-employed?

Marc Ramsden: I had no control over anything that I ever did. A prime example was that one Saturday I had somewhere to go in the afternoon and when my parcels arrived about lunchtime I delivered all the parcels that were 24-hour delivery. The ones that were standard, which is three to five days, I carried over to the next day. They were not too impressed with that, and I had to be retrained, I was threatened with service removal if I ever did it again, and so on. The people still got their parcels within the allotted time that they had paid for, but you just didn’t have any control over that. You couldn’t make decisions for yourself.

Q63            Royston Smith: You couldn’t choose to do just two hours a day, for example?

Marc Ramsden: No. Every parcel that arrives at my house has to be attempted to be delivered on that day.

Q64            Royston Smith: If you said, “I don’t want to work on Wednesday”, how does that work? If you are self-employed you can choose.

Marc Ramsden: It doesn’t. They tell you that they have two systems. One is called “substitute”, which is that somebody you pick who just works for you, you pay them, nothing to do with Hermes. That is what they tell you. In reality they still have the final say. A situation arose where I was going on holiday and I found three people who were prepared to do my work while I was away, but each of them were put to Hermes and the field manager refused to accept any of them. In reality, they want you to find people and then they want to take them on board for themselves, so if somebody leaves they can just move them over and put them on their round, take them away from you and put them on their round. That is what they want to do. They want you to find people to do their job. If you find somebody and they say, “No, I am only interested in doing a week while they are away” or one day a week or whatever, then Hermes refuses them.

Q65            Royston Smith: The only way you can take time off during the day or during the week is if you find somebody to cover for you?

Marc Ramsden: Yes, but you can’t do that either. While I worked for Hermes, which was for about 18 months, I took a week off and went on holiday, giving them three months’ notice that I was going. When I came back they had removed my service and I lost it for three weeks. It was near Christmas and they were in quite a muddle, so they gave me back the round so that I could sort out their mess. The other one was in July last year when my car was off the road for MOT, I had to have work done for MOT. The morning that I was due to go back to work, my field manager texted me and said, “You haven’t got any rounds any more”.

Q66            Chair: That is why you don’t work for them now?

Marc Ramsden: Yes. They just texted me, “We have taken your rounds off you. You shouldn’t have gone on holiday, and that’s that”.

Q67            Chair: Syed, can we ask you the same question?

Syed Khalil: I don’t consider myself self-employed in any way, shape or form, because of the way Uber works. People say it is the flexibility. There is not any flexibility in this trade, because you have to work on those hours when the people need a cab, a minicab, when they need to travel. Either you work in the morning time or in the evening time when the people are there. You are not going to start working at 2 am and finish at 6 am, because people probably need a cab at 6am to maximum 8 am, 9 am or 10 am, and then after that it is a quiet period, and then you can start again at 4 pm to 11 pm, 1 am, or 2 am. There is no flexibility that you can choose any time and you can finish any time.

I live in Dagenham, and it’s not like I can turn on Uber and stay in Dagenham and I will get the jobs. I won’t get that many jobs over there, because it is in the suburbs. I have to drive through to the town to get the jobs. We will be lucky to get the jobs over there, and Uber does not have as many customers in Dagenham or further down in Essex as in the town, so we have to come to a certain place at a certain time to get the jobs. There is not any flexibility.

Q68            Chair: Syed, can I just interrupt? We heard evidence from the previous session that was very different from your evidence. Is that because there are two tiers of workers in these companies: a small group who are allowed to have what is often a full-time job and do work, say, for Uber and others who are expected to be, in a sense, in the vineyard in the heat of the day and work the whole day?

Syed Khalil: I really don’t know why there is a part-time driver in this industry, because I have to work 40, 50 hours to cover my expenses first and then I can make money. If they are part-time and they are working just a few hours, they are only going to pay for their expenses, because they have the same hire and reward insurance.

Q69            Chair: One of your biggest expenses is your car, isn’t it, which you had to buy to get the job?

Syed Khalil: Yes, and Uber has a restriction. They don’t take old cars. I was on the executive platform. There was a restriction for the executive platform—you need to have an E-Class. You need to have a £40,000 car before you come and join the Uber platform. There are some TfL regulations that the car is not supposed to be 10 years older than what it is, and it is a cost. Not everyone can come and bring their car and get the sticker. It is not like that. The car has to have passed a certain fitness test.

Q70            Chair: David, what about you?

David Dunn: I would agree. Do you want me to answer the original question or the second one? The original question that was asked was: do I feel myself self-employed? I would say that I wanted to be self-employed. That is what I joined Uber to be and that was the promise—that it was going to be on a self-employed basis. But as Syed said, the control that Uber has makes that almost impossible now. They do dictate the type of car you have to have, but that is okay because you have the promise of having an executive car, which I have. I went out and I bought a Mercedes E-Class and I was expecting to get executive work. Perhaps 5% of the jobs that are offered from Uber are executive jobs.

I find myself running about with an E-Class doing jobs for £2.25, and that is unheard of. Black cabs charge £6 and £7 for that and they can make money. We have insurance we have to pay and all these things we have to do. I have tried saying to Uber, “I would like you to negotiate with me on the fee that you charge. I would you to negotiate on the fees that are charged to the public. We don’t need to be as cheap as this. We want to charge more”, and they refuse to do it. They will not talk to you and they will not allow you to talk. How can you possibly be self-employed if you are not allowed to negotiate your own fees? If a ping comes up and it says 13 miles to go, or 13 minutes to go, and you get that job, if I refuse three times they switch me off. They penalise you and switch you off. You don’t have a choice.

Q71            Neil Coyle: What means do you have of communicating and giving feedback like you have just told us?

David Dunn: You have to make an appointment to go and see Uber, and I have done that on several occasions. I have sat with them for long hours and they listen and nod their heads and nothing ever comes from it.

Q72            Neil Coyle: Is that on a one-to-one basis, not groups?

David Dunn: That is on a one-to-one basis. They will not do groups. They will not entertain anybody apart from on a one-to-one basis.

Q73            Neil Coyle: I offered to meet with Uber and other cab representatives in London and they point-blank refused, so it does not surprise me to some extent, but it is disappointing if there are not those forums.

On the point you were making about the flood on the market, the Mayor of London is currently consulting on additional language and driving skills requirements. Do you think that will help to any extent?

David Dunn: I think a whole lot of things would help. The number of cars that are out there is huge. It is not just in London, it is in Glasgow as well now. Glasgow is getting to the stage where there are too many private hire cars. This not just an Uber issue; this is another issue. For me there is a safety issue, a pollution issue, all sorts of things. There are also other districts that come into the areas that we are supposed to be working in, and I think the laws are slightly different. I am not terribly sure but I think the licensing laws are slightly different in Glasgow from here in London.

It would make more sense if they could reduce the number of private hire cars. I don’t think anybody expects to have a car in 30 seconds. I don’t think anybody expects to be able to get a taxi in 30 seconds. They don’t want to wait an hour but they don’t expect 30 seconds; five minutes, seven minutes is quite acceptable. That is the way it was at the beginning and everybody was getting a piece of the pie. It would be great if that was the way it was, but Uber just wants as many cars on the market as they possibly can. They want to flood the market with cars because it makes no difference to their income whatsoever—none—having more cars. The only people it affects are the drivers, and the drivers can’t make money if there are too many cars there.

Q74            Royston Smith: I am going to ask whether you feel you make the national living wage when you are working, but I want to clarify what you have just said about how Uber will make money regardless. If there are too many Uber drivers and they push the price down and down and down, don’t they get less commission as a result of that?

David Dunn: But Uber are not doing that at the moment. The price is not reducing at the moment. They have reduced it in the past; they are keeping it the same at the moment. The money that the passenger pays is still the same. The percentage that they take is going up. It started off at 20% in the UK and it is now 25% of the fare, so they take 25% of the fare. People like the fact that within 30 seconds they can get a car, and more people are encouraged to use the system. They still get 25% of every fare but there is less of the pie to share among the drivers.

Q75            Royston Smith: Their ultimate goal would be to put the others out of business so it was all just Uber, wouldn’t it, and they would have lots of work? I am not suggesting they are doing it in any way Machiavellian but just in a business way their job is to be the first taxi that people choose.

David Dunn: That is the aim of any business, I suppose. You want to be number one, don’t you? Everybody wants to be number one, but at the moment it is to the detriment of the wages that the drivers are earning.

Q76            Royston Smith: I will ask you all this, but I will ask you first, David. Do you earn the national living wage when you are driving for Uber?

David Dunn: Net or gross? The gross figure is above the national wage and the net figure is certainly below it.

Royston Smith: By gross, you are talking about before they take their commission?

David Dunn: Before they take the commission, before I pay my insurance and my fuel, before I pay for the sweets that I have to have in my car. I don’t know whether you know about the star points system. You rate a driver from one to five stars. If a driver goes below a certain rating then they are taken off the platform. They are not allowed to be a certain rating. To do that there is an encouragement from Uber to have sweets, water, whatever in your car to try to encourage people to give you a better rating. They have now introduced on the app that when the person finishes their journey they press a button that says, “Was the car fully stocked?” They don’t stock the car; we stock the car. People always talk about Uber service. In my opinion, Uber does not give a service, the drivers give a service, and that is because that is the way we want to do it.

Q77            Royston Smith: Taking in the things that you would have to pay, you think that the net is below?

David Dunn: Below the minimum wage.

Q78            Royston Smith: Syed, is that the same for you?

Syed Khalil: I am definitely below the minimum wage. I have been in this industry for a long time and since Uber came, the honeymoon period ended, and my wages are going down, my monthly income is going down. I can tell you about so many issues, but—

Q79            Royston Smith: Marc, yours were slightly different circumstances from David’s and Syed’s, being a delivery driver and not a taxi or Uber driver. Were you making the national living wage?

Marc Ramsden: It depends who is calculating it.

Royston Smith: If you are calculating it, what do you say?

Marc Ramsden: If I am calculating it, then no, but if they are calculating it, then yes.

Q80            Royston Smith: How would yours and theirs differ in the way you calculate it?

Marc Ramsden: They calculate theirs like this: you have a handset that you scan all your parcels on to. When you make your first delivery they start the clock and when you finish your last delivery they stop the clock. They calculate the time between for how much you have earned and that is what your hourly rate is, but they don’t take into account that I have to unload the lorry and I have to sort out 120, 130 parcels.

Royston Smith: Before they put you on the clock?

Marc Ramsden: Yes. I have to scan them all. I have to do a route for them all. I do about two and a half hours’ work a day that is unpaid.

Q81            Royston Smith: When you add that in, it drops it below?

Marc Ramsden: It makes a difference, yes.

Q82            Neil Coyle: I think somebody touched on this previously, but can you tell us, alongside the work you do, do you get any help from things like tax credits or housing benefit?

Marc Ramsden: We certainly got tax credits, yes.

Syed Khalil: Yes, I get the housing benefit because your income with Uber is not good enough so you can afford to live in London and, yes, tax credit as well. I used to receive the tax credit when my kids lived with me. Now as a single person I don’t get the tax credit because I didn’t apply there, but I am getting the housing benefit.

Q83            Ms Karen Buck: Could I ask a question on the housing benefit? One of the complications is often that you have to notify your earnings constantly. Do you find that a problem with the change of—

Syed Khalil: It is very difficult to get the housing benefit when you are working self-employed and you are low-income, because they expect you to make some money, but you explain to them that even when you are working 90 hours a week you are not making the money to afford it—as a single person I cannot afford to live in London because my income has gone down massively.

Q84            Ms Karen Buck: Are they saying to you that you have to provide them with more details of earnings?

Syed Khalil: Yes.

Q85            Ms Karen Buck: Are they saying to you that you can’t possibly be earning that little for the number of hours that you work, so they will calculate your benefit on a standard level, not actually what you earn?

Syed Khalil: Recently they did that with me. I told them that I am earning less money but they said, “No, you are earning more” and they deleted my car expense, which is a major expense. I would not have an E-Class Mercedes if I was not working with Uber, I would just go in buses, but I got the E-Class Mercedes because I want to work and drive in London and make a living.

Q86            Chair: Do you think that now you have gained a job with them, buying that car to get in has trapped you?

Syed Khalil: Yes, it is a big scam. It was a scam for me. I consider it a scam because recently Uber was advertising on the internet and everywhere to make £1,000 a week, £600 in the weekend, without any rules and regulations of the advertising standards.

Q87            Neil Coyle: The previous panel painted a very different picture and had different things to say about tax credits and housing benefit and things in particular. In your experience of working with Uber, Hermes or whoever, what is the general picture? Are more people receiving tax credits and housing benefit or not, in your opinion and from those you have spoken to?

David Dunn: I don’t know of any other drivers who are doing it, but I don’t get into that kind of depth of conversation. We don’t tend to get past, “We are not earning enough money”.

Syed Khalil: I am a typical minicab driver, a private hire driver. In my surroundings the majority of people are relying on tax credits, joint benefit or housing benefit because of this type of deregulation of the private hire industry where companies like Uber and Addison Lee and all those operators have a free hand to do whatever they want to do with their drivers. They need an unrestricted supply, a maximum number of drivers. The only reason given is, “If you are not happy, switch it off, do something else.”

Marc Ramsden: I have no idea whether other people are getting tax credits or not. It is a bit of an isolated industry really. I see the other couriers but not enough to discuss the financial side of it.

Q88            Richard Graham: I am sorry, I was at something else on welfare and missed the opening bits of your statements. Just listening to you, David and Syed, you are both clearly capable, articulate guys with lots to offer all sorts of different businesses. I can’t help finding myself thinking, Syed, aren’t you in a position to set up your own business, providing executive travel for a number of local companies and their key customers and so on, so that you have the independence that you clearly treasure and greater control over your earnings and all the rest of it? Isn’t there a different business opportunity for you in all of this? Then we will come to David.

Syed Khalil: As a private hire driver, it is one of the conditions in our licence when TfL gives it to us that we cannot advertise ourselves. We have to have work with companies like Uber or operators like Addison Lee or any other high street normal minicab office. This is a very clear-cut condition on our licence as a private hire driver that we cannot accept bookings, we cannot take bookings and we cannot do private jobs. The jobs have to come through the operators. This is a very clear point. TfL restricts us not to work alone. We have to work through the operators.

Q89            Richard Graham: Are all the operators the same? Have you tried working with Addison Lee, for example?

Syed Khalil: I have worked with Addison Lee. It is almost the same situation. It is Catch-22. You cannot make a massive amount of money. You can hardly live a life. Addison Lee has some control on driving hours. For 16 hours, 18 hours they switch you off and there is more security as a driver.

Q90            Chair: Syed, so that we understand this employment trap, almost, so far you have explained two factors to us. One is that you are required to gain a certain sort of car. Do you buy it through Uber, or do they tell you by which methods you can easily acquire the car?

Syed Khalil: They have got the Uber market, which is another website—Ubermarket.com or something like this—where they have offers. You can go to Jemca Toyota and get the Prius from there on finance. They pursue you to do it and get your own car, or there are some private companies that offer you rented PCO cars and they pursue you to go there and do it.

Q91            Chair: The other restriction you are saying is on your licence—that once you are in this trade you can’t set yourself up in another business.

Syed Khalil: Yes.

Chair: You just have to leave and—

Syed Khalil: We cannot take bookings from the general public. This is a very clear—

Q92            Richard Graham: To be clear on this, on the business of purchasing the car—you mentioned the cost of it was £40,000—presumably most people when they are buying cars like this are paying part up-front for a period of time and then deciding whether to pay for the whole car or sell it back and so on. You are not paying a huge lump sum up-front for this, are you?

Syed Khalil: Yes, not lump sum up-front. My credit scoring was not good enough so I ended up at Cargiant, and their prices are quite expensive.

Q93            Richard Graham: There is a way out of that particular purchase. David, if I can just turn to you.

Chair: What is the way out, Richard?

Richard Graham: It depends how you do it, but typically you pay a lump sum of money to own a car for a period of time and then at the end of that time you decide whether you want to buy it completely off them or you return it to them and get another one or just return it to them. There are different ways of financing it.

Neil Coyle: What would it cost you to do something like that? I assume you would lose out.

Syed Khalil: I have got a hire purchase agreement. The car belongs to me. Once I have paid off all the expenses, the car is going to belong to me, but by the time I have paid it off Uber is going to say, “No, your car is too old”. My car is too old for the executive trade anyway. I don’t get good jobs anyway because, as David said, they give the good jobs to the new drivers with the new cars because they are on a higher commission. As an old driver, I am on the lower commission even though I am paying 27%.

Q94            Chair: The other restriction on you, Syed, is on your licence.

Syed Khalil: Yes. The main restriction is on our licence. As a private hire driver, we cannot take bookings.

Q95            Chair: That is not imposed by Uber, is it? It is imposed by the licensing authority.

Syed Khalil: It is not. It is with TfL.

Q96            Neil Coyle: Richard was talking about taking extra jobs while you still worked for Uber. He was not suggesting you set up on your own.

Syed Khalil: Then I have to find another operator, and those operators are struggling as well since Uber came. They have fewer jobs and they are not flexible. Addison Lee is not going to allow me to work with Addison Lee and with Uber. If you join Addison Lee you have to work with Addison Lee. You have to have their car, not even your own car. You need to use their car.

David Dunn: In answer to your question, I purchased my own car outright. It came from a fund that I had available. I don’t know whether you were here when I started off by saying that I was going to be a black cab taxi driver and I made the decision to spend that money on an executive car because of the promise that Uber brought. To then say that I can get out and start my own business, it has to be a taxi business, and to start up a taxi business is a very slow process. Uber came to the market very quickly because they are a worldwide company and they have the customers behind them to start with. You have to build that, and if I could do it I would. It would take a long time.

Q97            Richard Graham: Yes, I quite understand. But what interests me is that listening to you both, the impression given is that this is a business in which it is virtually impossible to earn any money at all, and there are two thoughts crossing my mind. One is that perhaps both of you should be looking to do something different, if that is really the case. The second one is: how can quite so many people be working in this business if none of them are making any money?

David Dunn: To answer your question as best I can, when I have spent £37,000, £40,000 as an initial outlay, what am I supposed to do with that? If I want to go and do something else, do I just say, “Okay, that was a mistake, sorry”? I made an investment into this business on the promise that I was going to earn some good money. I decided that this was the self-employment that I wanted to have.

Q98            Richard Graham: Was it a promise, or was it one of these things in the back pages of a newspaper you sometimes see saying, “Invest in this and you might make lots”?

David Dunn: No, Uber says you can earn this money. Uber tells you, “This is what you can earn, you can earn this money, you can make lots of money with us”, and it does not transpire. Now we have to sit and do between 60 and 70 hours a week and I don’t even get the executive jobs that I am supposed to get. The promise of executive jobs was there; that is why you buy the more expensive car. I could have spent less and bought a Skoda and it would have been easier for me to come out of the business, but I decided that executive was going to be a thing in Glasgow. It was going to be fantastic, and that was the way to go.

Q99            Richard Graham: If I get this right, David, your real frustration is that you feel you were promised something.

David Dunn: My real frustration is that Uber does not allow me to be truly self-employed and set my own agenda. As far as fares are concerned, Uber does not allow us to negotiate with them in any form or fashion. It is their way or the highway.

Q100       Chair: But they treat you as self-employed, though, don’t they?

David Dunn: They tell you you’re self-employed.

Q101       Richard Graham: Did you start off really imagining that you would be able to set your own fares? Was that a realistic expectation?

David Dunn: No, the expectation was that £1,000 a week would be earned.

James Cartlidge: The number of fares overall would be there?

David Dunn: Yes.

Q102       Neil Coyle: Would it be fair to say that you feel like you have taken the risk and that risk has not been shared with the person who, for all intents and purposes, is your primary employer?

David Dunn: Yes.

Q103       James Cartlidge: That is a key phrase, because one of the key focuses for us is that obviously we are not making a legal inquiry into whether you are technically employees of this company.

David Dunn: That has already been done, yes.

Q104       James Cartlidge: Exactly. Nevertheless, from a policy point of view, obviously you are in growing businesses. You imply that you feel like employees.

David Dunn: Yes.

James Cartlidge: But obviously without the benefits, like paid leave etc. Marc, you were the first one to say that you did not feel self-employed. Do you feel like an employee of the company but without the benefits? Is that how you feel?

Marc Ramsden: The truth is that the couriers for Hermes feel that it is just a way of saving money for the company: no sick benefit, no holiday entitlement. If they sack you, stop your work or whatever, there is nothing you can do about it. You are self-employed. You work one day; they don’t want you the next day. There is nowhere to go.

Q105       James Cartlidge: They can’t sack you because you do not work for them. They can stop using you.

Marc Ramsden: Yes, so one day you work for them, the next day you can’t. It does not matter how long you have been there. There is nowhere to go with any grievance. There is nothing you can do about it. It is just a way of the company saving money.

Q106       James Cartlidge: When you worked for Hermes, did you do any work for anyone else?

Marc Ramsden: No, I don’t get time to do that.

James Cartlidge: Okay, that is interesting.

Q107       Craig Mackinlay: Sticking with you, Marc, just thinking about pension provision for the future, have you made any or is it all—

Marc Ramsden: No.

Q108       Craig Mackinlay: You are just relying on the state pension in the future once you retire.

Marc Ramsden: And the lottery, yes.

Q109       Craig Mackinlay: Do you know how much that might be, the state pension? Are you aware how much it is now?

Marc Ramsden: No idea.

Craig Mackinlay: No?

Marc Ramsden: None at all.

Q110       Craig Mackinlay: What did you do before Hermes? Were you in just a normal type of employment?

Marc Ramsden: Yes, before Hermes I worked for another courier company doing exactly the same thing—a quite well known one, obviously. Before that, yes, I just mainly worked for companies and whatever, doing different bits and pieces.

Q111       Craig Mackinlay: Syed, have you thought about pension provision for the future?

Syed Khalil: I don’t have any pension at all, nothing, never been told by anyone to have a pension. Even if I am going to have—

Q112       Craig Mackinlay: Given your cash flows you are earning out of the business, it might be a struggle to put into a fund.

Syed Khalil: Yes. I’m not working then anyway, so I can’t afford to pay anything. I am behind in my rent arrears, bills, car payments, insurance payments and everything, so I don’t have anything.

David Dunn: Yes, I have had a private pension all my life. I started it when I was very young because I was in the insurance business at that time and, as you do, the first policy you ever take out is your own. I have paid into that ever since. I cannot do it now. It is one of the first things that goes when you are not earning enough money—insurances and pensions. There is nothing going in there at the moment.

Q113       Ms Karen Buck: Do you feel the need to have, or do you have, insurance against loss of earnings and other costs, things like your vehicle? How is that arranged?

David Dunn: Your car is insured like any other normal car. You have to have fully comprehensive insurance on that. You also have to have insurance, obviously, for your passengers.

Ms Karen Buck: That you take out?

David Dunn: You do that, you have to take that out. Your car can only be licensed by the council by having that insurance in place. Yes, that is in place. As far as employment insurance, no, I do not have employment insurance.

Q114       Ms Karen Buck: Loss of earnings? If you are sick, what happens?

Syed Khalil: I don’t have any cover or anything like that. It recently happened to me. I was assaulted and unable to work, so I was on ESA for two or three months. I literally decided to stay just within the ESA means and that is it, nothing else. There was not any support through Uber; even though I had worked with Uber for three years at that time, there was not even one e-mail. All they wanted was for me to come back to work, but how can I come back to work without—

Q115       Ms Karen Buck: I am sorry to hear that. How would it work if it had been just a couple of days? How does the system work?

Syed Khalil: You are going to bear the cost. You are going to pay. We have a certain cost anyway. It does not matter if we work or we do not work. We have to pay the car expenses. We have to pay the insurance, which is not a normal insurance. This is a very expensive hire and reward insurance. Without that, we cannot work.

Q116       Ms Karen Buck: Have you ever looked into insurance against loss of earnings?

Syed Khalil: Not really, no. Recently, once it happened to me, the ESA stuff, then I did but I was not—

Q117       Ms Karen Buck: What about you, Marc? What happens if you are sick?

Marc Ramsden: I bear the cost. I have no insurance against loss of earnings.

Q118       Ms Karen Buck: Have you ever looked into what it would cost to insure yourselves against that?

Marc Ramsden: No.

Q119       Ms Karen Buck: Have any of you ever had any guidance or advice from the companies you work for about any of these issues—pensions, tax, tax credits and benefits, insurance?

Marc Ramsden: No, none at all. The only thing that Hermes used to do is you used to pay them a certain amount a month and they used to cover the commercial side of the vehicle insurance, but other than that, no.

Q120       Ms Karen Buck: Nobody has ever raised it with you? Nobody ever gave you anything saying, “You do need to think about pension. You do need to think about insurance”?

Marc Ramsden: No.

Ms Karen Buck: “This is what happens if you get sick”?

Marc Ramsden: From Hermes’ point of view, it works quite quickly. You speak to them one day, you are working the next. The only person you ever see is the field manager who comes down and sees you. Nobody else speaks to you. You do not have an induction. Nobody speaks to you. Nobody goes through any of these issues or whatever.

Q121       Ms Karen Buck: No induction?

Marc Ramsden: No, nothing at all.

Q122       Ms Karen Buck: What about either of you, Syed or David—any induction, any welcome pack, any guidance?

Syed Khalil: Nothing. Nothing at all. I am a very typical minicab driver in London. I have been in the trade as a driver since 2009 working for different companies, including Addison Lee, Uber and all those companies. No, none.

David Dunn: As far as Uber is concerned, yes. I was asked into their office and given a wee bit of information about the company, promised the things I was promised, and they said, “Here is the documentation you need. If you need assistance with buying a car, we will get it for you. If you need assistance with getting your licence”—because I was a new taxi driver—“we can assist with that”. So, yes, that went on for me to a certain extent. There was no chat about tax or whatever, but the introduction to the company was there, definitely.

Chair: Thank you. That has taught us, with the first panel, how complex the job market is. We are grateful to you very much for travelling here today. Thank you very, very much.

Examination of witnesses

Witnesses: Jane Cordell, Sara McKee and Robert Winstanley.

Q123       Chair: Robert, might you introduce yourself and say who you are and where you are from?

Robert Winstanley: My name is Robert Winstanley and I am from the north-west. I am from an organisation called Smokestack Software.

Sara McKee: I am Sara McKee. I am also from the north-west, in Manchester. I run a little business called Evermore, which champions the rights of older people.

Chair: Jane, welcome back. Might you introduce yourself again?

Jane Cordell: Hello. I am Jane Cordell. I am also from Manchester. There must be something about the place. I am a director of Result CIC community and trust company, providing coaching and training for marginalised people.

Q124       Chair: What we would like to be able to get today is the value for disabled people to be able to move into self-employment and the positive things and the disadvantages of it. Robert, might you kick us off?

Robert Winstanley: I think self-employment, especially having an impairment, is very difficult. With my impairment, for example, which is brittle bones, I could go through the stage of having, say, three, four, five months without any form of breaks or anything like that, but then I can go through the stage of breaking a femur or a shoulder or something and then be bed-bound for eight, nine, 10 months of the year. The whole idea of the company that I am involved in at the moment is that we specialise in technology and software. It is an organisation in which if I am bedbound or whatever it may be, then I can have my laptop and I can develop from wherever I am, whether it be hospital bed, at home or wherever my location might be.

Sara McKee: I became self-employed. My husband committed suicide about six years ago and a year after I was diagnosed with clinical depression due to the trauma. I then, at the same time, the year later, got made redundant from quite a senior position in a charity. I was left in that new wasteland where you have to reinvent yourself. Because I was a chief operating officer of a big organisation, I did not even think about the Jobcentre, to be honest, because I do not think they would have catered to help me find another role. What I tend to do now is around consultancy and supporting other people to get projects off the ground. I work with some brilliant people and we are very focused on what we do.

The challenges around mental health issues—my husband died because of his mental health issues; I had never had them before he died—is that they do fluctuate, not quite as visibly as yours but they do fluctuate. You do go through times when it is almost impossible to move, let alone do any work. For me, it would be good if there was something that we could develop that encouraged people who have fluctuating health conditions of whatever sort to be able to come in and out of the workplace knowing there was some form of safety net—because at the moment there is no safety net. If I cannot physically go and work—I am not clever enough to do software development—and if I cannot go and do what I am good at, there isn’t any safety net. I think that loses an awful lot of talent from the marketplace. Having worked in the welfare to work arena in a previous life, I understand how damaging it is to your own personality and self-esteem if you do not have work.

Jane Cordell: The reason I decided on self-employment was that I had been discriminated against by two previous employers. I have had many sideways moves in my career due to being deaf. It was about the cost in my case. I like the Committee’s use of the word “value”, because what I needed to do after the second quite sudden bout of discrimination across the road at the Foreign Office was to say, “How can I add value? How can I avoid maybe slipping into depression, and a feeling of isolation, and use all these skills and experience I have?” For me the choice was about greater autonomy and self-respect and being able to use everything I could in the most constructive way. But as I think Robert said, it is a high-risk strategy because of the massive decline in income—very, very high risk. I think it was an 80% decline the first year. It has gradually got a little better, not quite so bad, but taking that step does involve a significant change in your personal circumstances.

Q125       Richard Graham: Thank you all. There are one or two questions that I am meant to be asking, but if I can go slightly off piste, Chairman; Sara, on your point about—

Chair: I am living for the day, Richard—

Richard Graham: I promise I will come back there. Just on your point about wishing there was something there for people with mental health conditions for those days when they simply cannot feel like going to work, it is an incredibly difficult area, isn’t it? If you were thinking of structuring some form of welfare around that to reimburse someone for days they could not work, you could imagine a situation in which a lot of people might take huge advantage of that. I am wondering whether you have ever spoken to the friendly societies, who do a lot of insurance policies for self-employed people traditionally over physical health issues. Going right back in time, they employed shepherds who broke a leg and, therefore, could not look after the sheep, or painters who fell off ladders and stuff. Have you had any discussions with them about dealing with mental health issues when self-employed people cannot get to work?

Sara McKee: I have not dealt with friendly societies, but every insurance organisation I have approached will not insure for protection income, critical illness, any kind of health insurance, if you have a mental health condition.

Q126       Richard Graham: No one yet that you have spoken to?

Sara McKee: No one. That is where I think Government could help, because what is very difficult is that you do not want to go down the route of being refused insurance, because that is another issue that you then might have to deal with later. So far, and it certainly was the case when my husband was ill, there was no way we could insure him. The only caveat we ever got to was a very, very expensive insurance, but you had to be two years clear of any mental health issue. As I say, I never had it before and now I have it on a fairly cyclical basis. I do not want to criticise you, but it is not that I do not feel like I cannot work. It is that my bones do not move. I cannot get out of bed.

Q127       Richard Graham: What would you like the Government to do about this?

Sara McKee: If they can help encourage the insurance market, a bit like how to insure against dementia. We work with a lot of older people; how do you insure against having dementia? Nobody has come up with an insurance policy for that yet. We have to tackle it, as mental health issues crop up certainly in an awful lot of people’s careers. We are trying to kill the stigma and discrimination. If it was not for my husband, I would never come here and say that I have ever had a mental health problem, because I would never get another job.

Q128       Richard Graham: Do you have any form of insurance or any other arrangements, like subscribing to somebody else’s auto-enrolment plan to cover yourself for physical health issues at all?

Sara McKee: No.

Q129       Richard Graham: Robert, do you have something in place?

Robert Winstanley: No.

Q130       Richard Graham: Is it something you have ever thought of looking at?

Robert Winstanley: It is something I have not really looked into myself. I think it is just that with me being so young I have not really entertained that sort of route yet. Definitely going down the route of being self-employed and having the company alongside as well, I am very new to the whole ethos of it all, so I am still trying to find my way through the trees, if you will.

Q131       Richard Graham: Yes. Forgive me asking, but is your health situation reasonably stable? Do you feel there are swings up and down at all?

Robert Winstanley: Yes, it is very hit and miss. I am 25 now. When I was a lot younger, my consultants did say to me that I was unemployable and there was no way, especially then, in the mainstream route that I would have the ability to have a job or give something back to society. That is why I looked down this route. It is very hit and miss. I do try to maintain my condition with healthy eating and fitness and so on and so forth, but it could be anything. I was in a car the other week. I am just sat there in the car and then a gentleman hit me in the back. I dislodged my hip and ended up cracking my hip as well just from a guy hitting me in the back. I can go months without any breaks or something like that can happen that then can shove the hips and so on.

Then, on the back side of it, it is very much that they do not want to do anything about it, because any operations or anything like that could make the condition worse. Then you are going back into the circle all over again. With insurance, like you said, it would be very difficult due to the condition being as risky as it is. With a shepherd, probably once in a blue moon he would break a bone or so on, but with myself I would not like to know what it would be for that sort of issue.

Q132       Richard Graham: Okay, but you have not put it to the test by asking anyone.

Robert Winstanley: No. I think when I win the lottery maybe then I will look at insurance, but until then—

Q133       Richard Graham: Jane, how about you? Have you looked at this issue of insuring yourself or planning ahead for the future?

Jane Cordell: Yes, I have, I suppose because I am old and I had already had the benefit of being self-employed. I decided not to and I opted to try to make my own savings, because I found it very expensive against potential benefits at the usual minimum level at which you can climb. I try to look after my own physical health as much as possible and invest in that. It is not something I would rule out, but I listened to the panel before and I agreed with them. It is often out of reach for people when you are first setting up a business. You have to invest quite a lot usually, so you do not have much to spare.

Q134       Royston Smith: I think most of my questions have been pretty much answered, Chairman. Very quickly, I think you answered, Robert, that you felt you were too young to think about pensions, and I would advise you that you are probably not too young to think about pensions. You might want to do it. The longer you pay in the better that will be. Can I ask you, Sara and Jane, about pensions? Do you pay into pensions?

Sara McKee: I have a pension in a SIPP that I pay into as and when income allows. I probably have not paid much in over the last five years, but it has grown because it is in an investment portfolio. I do understand all that side of things.

Rather than dwell on the negative side of self-employment, I think what it does give us is choice and control. If I can work, then I can manage those bits rather than rely on the state when I cannot work. I think also, having worked in that welfare to work side before, if you can encourage it as an entrepreneurial activity rather than just that you cannot get a proper employed job with all the benefits, then most of us are going to work until we are 70—sorry about that; we are closer than you are—and we are going to have a variety of things that we are going to be doing. Having different careers and steps when you are fully employed and when you are self-employed is not a bad thing. I just think there could be some real help around the insurance sector and even pensions to make it easier for people. Who understands how their pension works? I don’t.

Robert Winstanley: I don’t.

Chair: Robert or Jane, do you want to come in? You don’t have to if you don’t want to.

Robert Winstanley: Possibly I was a bit premature with saying I was a little bit too young. It is one of those things where there is so much going on at the moment trying to get the relevant support in place and everything else, it has been very much one of the last things on my list. My dad currently is going through the process of getting his pension under way and bringing everything together, and just from talking to him it seems like it is a very, very long drawn-out process. I am thinking that if I can get the relevant support and everything else in place and all those plates spinning nicely, then I will possibly end up looking down that route and see where to go.

Jane Cordell: I mentioned my patchwork career portfolio. That is the official word. I have had jobs where I received a pension but, as I said, I have worked for myself in the past. I set up an English language school 25 years ago in Poland and here and there I have had contracts where I thought it was advisable to pay into a small private pension. I had experience of that when I started this company in 2012. I took out a pension, as much as I could afford. It is very tax-efficient and something that I wanted, but I plan to work until I am about 95, I hope.

Q135       James Cartlidge: The interesting thing, listening to you all, is that obviously you have had to make some quite big decisions with your lives. You are all self-employed at this moment. Is this becoming something that you now embrace, that you positively want to succeed with, or at the end of the day are you still in a position that circumstances put you in and you would like to be able to go back to employment, “normal” work, if you could?

Jane Cordell: I am smiling because I have absolutely 100% embraced it, despite not having very much money, because of what I said earlier. It is about realising my own personal potential. In conjunction with that, I would like to make a point about the support that I receive. I have Lindsay and Fiona as lipspeakers and there is still at the moment a big gap in understanding about the value of that support. It is the cost of everything, the value of nothing at the moment.

I would like to encourage Access to Work and the DWP to look at the final paragraph of their 2015 report on equality and Access to Work, which said it could consider return on investment. I would like the Government to think about what I would call success factors. I read the report and disagreed with much, agreed with some, thought the maths was fine. I do not see anything in here that describes why Access to Work is so good, is so positive. I have never once been asked to say. I think we need a much better set of data on which to base decisions. In about 18 months I will face an arbitrary cap on my support. I am not making a personal appeal here, but if that has to happen, I want to know why and how my ability to contribute might be cut and my ability to be one of the few senior deaf role models inspiring others.

Yes, it is a fantastic route if you have the right determination, confidence and experience, but particularly if you have a sensory impairment or quite significant impairment, you need to feel that you have a fighting chance of getting the support you need.

James Cartlidge: Understood, yes.

Sara McKee: Yes, I have fully embraced it. I have done business start-up and transformation in my career, so I will just keep doing that as a self-employed person. I am building a business in my head. I am not a self-employed person doing it because I cannot do anything else. I am just here partly in recognition of the fact that it is probably easier for me to run my own show than it is to go and sit in an interview for a job and say, “I might be out occasionally because I have black dog days”. I would like that situation to change.

Can I make career out of it over the next 20 years? Absolutely. Are there opportunities? Yes. I work internationally. I have some fantastic people I work with at a very senior level, and we bring innovation into this country. That is really exciting and it is why I get up in the morning, albeit not every morning.

Robert Winstanley: Currently, I am more on the fence. With it being a tech business and with it being a start-up, the process to begin with is quite slow and laborious. I do have a part-time position running alongside the business as well. It is quite nice. With the employment, the employees that I am with at the moment, they get it. I am team lead with the group of people that I deal with through youth work, and they just understand how it is sometimes with the condition, but then for myself I feel like I am potentially letting them down. I hate ringing them up. I rang them and up and said, “I have been in a car crash, but I will be in within the hour”. Then my employer says to me, “Don’t bother, don’t come in, you have been in a crash, don’t bother,” but I feel like I am then letting them down.

Through the self-employment side of things, the only person I am going to let down is myself. I can still do the work. I will still do it from a laptop. It is not an actual physical thing. Currently, I am very much on the fence and I do want to lean more towards the business start-up and put all my efforts in that, but with the condition the way it is and the start-up, I am better keeping the other side.

Q136       James Cartlidge: Given that Government policy is to halve the disability employment gap, which is an important Government target in relation to this subject, do you think that self-employment should play a credible and important role within that?

Sara McKee: Absolutely. People want choice and control over how they live their lives. In my experience, you cannot always do your best work in some organisations and institutions. Many, many years ago I wrote a piece for a Department for Business White Paper about getting mentors into regions so that people could get together and see that self-employment, starting your own business, is a really positive thing. It was not just about being the next Google or Uber, it was about being the next whoever you wanted to be so it fitted in with your lifestyle or your aspirations.

I earn currently probably a tenth of what I could earn, but my quality of life is better. I have choice. I have control. Of course, all my life changed when my husband died, so you take a completely different view of everything, but having what I do valued and working with people who get what we are trying to do and are part of it is much more important than huge money. As Jane said, she is a fantastic mentor and role model; so are you, Robert. There are loads more out there who are doing really well with very little support. If we could have a programme that recognises that, then I think self-employment—rather than call it self-employment, let’s call it entrepreneurship. It is more interesting, more appealing.

Jane Cordell: Words are important. There is a difference between being self-employed and being an entrepreneur. If you have to work for yourself, you need to be very creative and ingenious. I agree with that last point, but I disagree a little bit, respectfully, with the first point about the organisations. I worked for 25 years as an employee and I coach a lot of deaf and disabled people who are in the workplace. One last week employs 28,000 staff across the nation but now has a central advisory function in HR if you are disabled or become disabled. I feel that there is much greater scope for deaf and disabled people to do good work to contribute and to develop at work, but there seems to be a mismatch in the kind of advice and information available from employers, including on Access to Work, which surprised me. It is about coaching for these employers, asking, “Do you know about Access to Work?” None of their managers had been aware. For such a large employer, I was surprised.

Q137       James Cartlidge: It is so interesting, because as you say, as someone who started a small business, I would always hope that people think of it in a positive way. As you say, it is about being entrepreneurial, being creative, making the most of your potential. On what the state can do, I think one problem you have raised is that all of your cases are complex. If there is no insurance, clearly the state has a role there. At the very basic level we have the NHS, obviously, in terms of health etc. On this point of where that extra level of security comes in, it seems to me it would be incredibly difficult to have a centrally imposed system that covers all these different bases. The starting point surely is that we have to encourage people to at least consider the option and start from there. The onus is on making self-employment seem like a positive thing to do at the outset but, of course, there are risks. You said, Robert, you are on the fence at the moment about that. I suppose, starkly, you can see the downside sometimes—the lack of security. As you said, there is no cover, as it were.

Robert Winstanley: May I just backtrack for a little moment? I totally agree with what you were saying. I think so many people with impairments are doing such great work, especially one of my colleagues, Jacqueline. It is fantastic work that she is doing. I strongly believe that people with impairments have a large scope and a lot to offer, potentially more than our able-bodied counterparts, just because of the challenges that we have been through ourselves. I have been fighting for my life, like you do, since I was two or three alongside my parents. I think because of all the challenges that I have been through personally, I do not see them anymore. I enjoy them on a daily basis and I believe with the relevant support, the ideas and concepts that we have can be brought forward through the support of Access to Work and so on and so forth.

I entered Access to Work and I think originally it took me around about 18 months to get the plans in place and all that sort of palaver. It ran for the 12 months and then after the 12 months I was told that by that 12 months I should be sustainable and have the ability to fund my own support; for any small business, no matter how small it is or how large it is, whatever you are planning 12 months clearly is not enough. With everything in place, even just bits and bobs of support to begin with would very much excel the way forward.

Like I stated, the employment that I do is on the youth work side of things, through inclusion and a bit of mentoring like Jane does and so on. I do fear for the future of these young people, because when you have the sit-down and you discuss, “What do you want to do for the future?” there is just no ambition—“There is nothing I can do”. “What about this? What about that?” You try to get them excited and there is just nothing there. “What do you need?” “Well, if we had this sort of support we could do this, we could do that.” I am fearful. I don’t really care about myself. I am excited to go whichever way. I have the vision. I have the way forward. I do have relevant support from family and friends to help me get to where I want to be. I just believe that in society if you have an impairment and you are within this field, you are seen less of. “What do you do for a living?” I tell people about doing a tech firm. It’s “oh, right, okay”, and that is it.

Q138       Ms Karen Buck: I want to ask you about your experiences of the actual social security system—whether any of you have used tax credits, ESA, housing benefit, and the extent to which that works or does not work, particularly given the variable earnings of self-employment and possibly also the variable experience of health that you have described where you can work but maybe you dip in and out of the ability to work. How well does that work, and what might we do differently?

Jane Cordell: I have never used the social security system, unless you count making an application for disability living allowance.

Ms Karen Buck: We do.

Jane Cordell: Basically, if you include that, then yes. That allows me to access important functions, financial advice, maybe solicitors’ meetings, sometimes family funerals, various things a little bit. Tax credits, no.

Sara McKee: No, I have not this time round, mainly because I do not think people in the Jobcentre get what self-employment is. There is a machine that works extremely well as a sausage factory, if you like, that gets you from unemployment into another job. This is kind of different, so it is quite difficult, I think, for the Jobcentre to take it on. It almost needs a different service for self-employment. I have never had tax credits or housing benefits. Fortunately, I have never had to draw on those.

I do find it would help if there was some kind of insurance that we could even pay into, because mental health conditions disqualify you from most normal insurance policies. If either the Government said to people “You cannot discriminate against mental health issues”, or there was some other form of insurance like our national insurance that we pay into so that we can have that safety net for—because I guess it is really complex. We are all different. You cannot possibly come up with a scheme for everybody.

Q139       Ms Karen Buck: I do not want to put words into your mouth, but are you saying it does not feel as if it would work, so you just give it a miss?

Sara McKee: Yes. It is all a bit too hard, and the questions I am asked are very specific so they do not really apply. If I come at it from a different angle, then it is like filling in an application form. There is no box to say who I am on that sheet.

Q140       Ms Karen Buck: Because of health or because of variable patterns of work, or both?

Sara McKee: Variable income and health, both.

Robert Winstanley: I have been down the route of ESA, and the difficulty that I mainly found was the 12-week window. If you come off ESA, you then have 12 weeks to see whether your condition can be managed, then after that 12 weeks you have to go back through the process. It was just mainly that 12-week window that affected me, because it was fantastic, but then over a period of time I would have some form of injury where I would be bed-bound and not have the ability to work, then going back through the process of the ESA loop again. All your information has been deleted off the system and you then have to go through the remit again. For me, it would just be that 12-week window. Through the self-employment route it is—

Q141       Ms Karen Buck: Did you feel that when applying for ESA there was not really, again, an understanding about what can happen with people dipping in and out of good health?

Robert Winstanley: Yes. There was a black and white image, if you will. You are either on it or you are not. There seemed to be no form of middle ground to truly understand that. You are trying to manage your condition and get yourself back to some sort of normality, plus you are trying to fight this as well. You just seem very much pillar to post. It is about trying to fight to get away from that so you never have to keep facing it over and over again.

Sara McKee: The other thing with mental health for me has always been that I do not wear a bandage, I am not in a wheelchair, I do not look ill, so because it is not obvious it is very difficult for people to understand it. A lot of people can work and do great stuff most of the time, but it is about that safety net. We do not have one, and we cannot even insure ourselves against it. That is the big challenge for people like me.

Jane Cordell: One point I wanted to add was about flexibility, which was the discussion you had. There needs to be greater flexibility if people are taking the self-employed route. Going and asking for extra favours is the reality of any self-employed person, so in terms of work support it will be very different from month to month. It took me about three and a half months talking to Access to Work to get them to recognise that. I do an employer job with X number of meetings a week, and I have 30 in one month and then only two the next. Finally, I got them to agree to allow me to use the budget across for that rather than strictly every week, every month. I hope that is all in, but I hope it is applied consistently allowing people that flexibility because it sounds like it is really important.

Chair: Robert and Sara, thank you, and Jane, thank you for your second appearance. It is very helpful.