A senior Conservative MP has called for self-employed workers in the “gig economy” to be guaranteed the legal minimum wage.

The call came from Ed Vaizey, who until July was the minister for digital industries, and if heeded would require a major change in business models for fast-growing firms relying on self-employed contractors paid on a piecework basis.

They include companies such as the taxi app firm Uber, which has 40,000 drivers enrolled on its system in the UK, and delivery giant Hermes, which relies on 10,500 self-employed couriers to deliver parcels for retailers including John Lewis and Next. Neither currently guarantees workers the minimum wage.

Uber last week said it would appeal against an employment tribunal ruling that its drivers should not be classed as self-employed and so should receive the minimum wage. HM Revenue and Customs is also investigating whether Hermes couriers are wrongly classed as self-employed following an investigation by the Guardian that uncovered concerns some were earning below the £7.20 national living wage that is statutory for employees and workers aged 25 and over, but not the self-employed.

The proposal of a wage floor for people who work “on demand” for companies in the gig economy is likely to be strongly resisted by companies that have modelled their businesses around such workers.

A source at a leading app company said applying a minimum wage would require restricting when people worked to ensure they were not paying wages at times when customer demand was low. They questioned whether working time would be defined as when the worker was logged into the app and waiting for work or only when they were on a job. They also questioned who would pay the minimum wage if a worker was using several employment apps at the same time.

Vaizey was speaking at an event in London on Tuesday about the impact of digital technology on the labour market and urged the government to produce a “definition of a new kind of worker in the gig economy” as a “halfway house” between an employee and self-employed contractor.

“What is emerging from the current debate is an inchoate feeling that there is something out there called the gig economy that needs some definition,” said Vaizey. “I wonder whether the application of a minimum wage to people who work in the so-called gig economy might be one step forward.”

He said it would not necessarily mean employers having to provide sick pay or holidays, but added: “The minimum wage has effectively taken the place now of tax credits as a statutory intervention to support people on low pay.”

Vaizey’s speech reflected increasing concern inside the government about low pay, a lack of training opportunities and job insecurity in a growing part of the low-paid economy.



The prime minister, Theresa May, last month commissioned a review of employment practices from Matthew Taylor, the former adviser to Tony Blair, that is expected to make recommendations for reform.

Speaking on the same platform as Vaizey at a discussion forum on the gig economy, Alan Milburn, the chairman of the government’s social mobility taskforce, said the Taylor review should clarify that “what is happening in terms of the creation of a class of self-employed is genuinely a demand from the labour market for greater flexibility and is not driven by financial and tax incentives that are creating an imbalanced playing field”.

“The time is right to strike a new deal, between big employers in particular and government about what it is we expect to see employers discharge as their social obligations,” said the former Labour health secretary. “What we should expect of employers is not just that they create jobs, but they create careers; how they design jobs not just to get people off welfare into work, but to give them the opportunity to progress. This is the time to strike a different relationship between the employing class and the governing class.”