With elections forthcoming, Söderberg and Lundberg explain that the Swedish model of industrial relations is being used as an excuse not to regulate the gig economy in Sweden. Available to read and to listen as a podcast.
The Gig Economy Project, led by Ben Wray, was initiated by BRAVE NEW EUROPE enabling us to provide analysis, updates, ideas, and reports from all across Europe on the Gig Economy. If you have information or ideas to share, please contact Ben on GEP@Braveneweurope.com.
This series of articles concerning the Gig Economy in Europe is made possible thanks to the generous support of the Andrew Wainwright Reform Trust.
Sweden goes to the polls on 11 September, in an election that comes in the midst of Europe’s twin economic and geopolitical crisis, with the war in Ukraine rumbling on and inflation surging across the continent.
What could the election mean for Sweden’s gig economy? Sweden has been traditionally associated with strong trade unions and a collaborative relationship with management, in what is called the Swedish model (or ‘the Nordic model’). But the country has been slow in responding to the emergence of the gig economy, and has been the only EU member-state to object to the EU platform work directive, which is currently going through the legislative process.
A new report by GigWatch, a non-profit initiative to examine the reality of the gig economy in Sweden, looks at the attitude of Sweden’s main political parties towards the gig economy, and analyses the prospects for regulatory change following the election.
To discuss the report, the Gig Economy Project spoke to Felix Söderberg and Jacob Lundberg, trade-union activists and members of GigWatch. We discuss:
01:06: An overview of the gig economy in Sweden
04:20: GigWatch’s research on Sweden’s political parties’ attitudes towards the gig economy
10:04: The EU Platform work directive and the Swedish model – resistance to change
23:10: Gig worker organising and trade unions in Sweden
30:32: The gig economy in Sweden after the election
A TEXT VERSION OF THIS INTERVIEW IS ALSO AVAILABLE BELOW
The Gig Economy Project: Can you give us an overview of the gig economy in Sweden?
Jacob: The gig economy got to Sweden a bit later than to the US and the UK. I first heard of it in 2013 or 2014.
The first big company that got started was Uber, and they had a bit of a controversy when they launched a service which didn’t comply with Swedish taxi laws, which led to a lot of drivers getting fined. Then after that it kind of exploded, when you had a lot of food delivery companies coming to Sweden and a lot of smaller ones providing different kinds of services.
There have been some attempts to estimate how many people in Sweden are working in the gig economy, and it varies quite a lot. Some say 10% of all people, but I think that’s a very generous estimate. There was recently a book published where the author had compiled different studies and he estimated around 2% of the population was working in the gig economy regularly.
The biggest sector today is probably food delivery, and then other types of logistics. For example we have an app for driving trash to the recycling centre. I haven’t really seen many studies on cloud work, from anecdotal evidence there are some people working in that as well but I can’t say to what extent.
The biggest gig company here is Foodora, which is German but was founded by a Swedish guy. They have become a kind of emblematic gig company. When people talk about the gig economy, they talk about Foodora.
GEP: In your report you conduct a questionnaire to uncover the attitude of political parties in Sweden to the gig economy, and supplement that with other research. Can you give us a broad summary of what your findings were?
Felix: In general what we saw is that the traditionally more right-wing parties were more positive towards the gig economy, and see them as job creators. They recognise that there are some problematic aspects to the gig economy but the solution to that is to adjust the labour market rules so that gig work is integrated as a permanent part of the Swedish labour market. They want the state to actively support the gig companies to fill the holes that they leave when it comes to social security and tax laws, to cement those employment forms.
Other parties, such as the Social Democrats and the left parties, are a bit more critical towards the gig economy, and the most right-wing party, the Sweden Democrats, are quite critical towards it too. Some think more union organisation is needed and the rules around the laws regarding union organisation has to be broadened to make it easier for people working in these employment forms to be able to get organised in unions.
Jacob: What we also found is that these parties which are positive towards the gig economy are way more active than those which are critical towards the gig economy, which are very passive. The exception is the Left Party which is a bit active, but not nearly as active as those parties which want to support the gig economy. These parties on the right are actively pushing different proposals to make it easier for these companies to continue and to get even more integrated into the Swedish labour market.
This is a problem because, if you break down the Swedish party system, there are two loose alliances before the election in September. We have the right-wing coalition which is generally very positive towards the gig economy and towards market liberalisation and then you have a kind of left-wing coalition which is mainly critical but has one party in it which is very strongly pro-gig economy.
With this election in September, we can’t really say that if the left bloc wins the gig economy will get destroyed or something. These are the parties which have governed Sweden for the entirety of the time that the platforms have become established in the country. I think for sure we can say that if the right bloc wins they will push a very friendly politics towards the gig economy.
Felix: It’s a very loose alliance to say the left bloc, because there are four parties in that and one is positive towards the gig economy, and two are just very, very passive. So probably we will not be seeing much talk about this issue during the election from the left side, and those on the right side will talk about how to integrate it into the economy.
GEP: What is the current state of play with regards to the regulation of the gig economy in Sweden as it stands?
Jacob: In the survey, the governing party, the Social Democrats (which governs with support from some smaller parties), are not very clear about what they want. It’s pretty much unregulated as it stands. We have the EU Platform Work Directive coming up, which will probably force them to regulate. Basically their position is ‘the EU Directive shouldn’t regulate who is employed in Sweden, that is up to the Swedish government’, but they aren’t too fond of regulating this through the Swedish state either. So it is very much left alone.
GEP: This is very interesting because I read in your report the only state to have submitted an objection to the EU’s Platform Work Directive is Sweden.
As I understand it, that’s because they believe that the Swedish model – a strong system of collective bargaining between employers and unions – could be undermined if you introduce something like the Platform Work Directive, as it would be the EU which would be setting certain standards for gig workers, and therefore they wouldn’t be subject to collective negotiation. Is that accurate?
Felix: As you said, the Swedish model is based on whatever rules and agreements which are made between workers and employers, the state and the political parties should not take part in deciding anything, and that is based on a long history of strong trade unions and collective bargaining through them. With the EU Directive, the Labour Committee in the Swedish Parliament have looked at it and said they want to give a reservation, because they believe it will go against the subsidiarity principle, and that these kind of things are best handled at the national level, as otherwise it will ruin our model. This reservation that has been made by the Labour Committee has been supported by the right-wing parties as well, so the protection of the Swedish model is coming mostly from the right-wing parties.
Jacob: What has been happening in the last decades is that the power balance in the labour market has shifted a lot, and the Swedish model (or the Nordic model) is supposed to be based on this idea that there is a balance of similarly strong forces. In reality, there has been legislation which has undermined this model in indirect ways, but you don’t see a debate about this aspect of the Swedish model being undermined. So the power balance has shifted and now it is very much in favour of employers and their organisations. The gig economy is just the latest incarnation of this trend.
Felix: According to the Swedish model, everything is supposed to be handled by the employers and the workers, but as Jacob says there has been a lot of legislation made in the last 20-30 years which has been in favour of the employers, and has weakened the position of labour unions and workers. So the gig economy is just the latest phase of that, because the people that work in the gig economy are mostly self-employed, and seen as entrepreneurs that have their own individual companies, which – according to how we traditionally organise workers in unions – it doesn’t work if they have their own company or if they are self-employed. So they end up outside this traditional way of organising labour and outside the traditional Swedish model. That’s why the right-wing want to cement this as a form of employment and integrate it into the labour market permanently to further weaken the Swedish model and weaken the position of workers in Sweden.
GEP: So as it stands, gig workers are considered outside of the Swedish model, because they are self-employed and wouldn’t be considered to be part of a system of collective organisation of employers. The platform work directive will change that, and that’s why it’s seen as a potential threat to the Swedish model. Is there any justification to argue that there is risks involved in the platform work directive for the wider Swedish model?
Jacob: I think there is a risk of it threatening the Swedish model. I think the Swedish model would be a better system in an ideal world where there was a good power balance or a power balance in favour of the workers, because then it would be superior for pushing workers demands rather than legislation. But as it stands now, I don’t really think the Swedish system is handling this well, so it’s more a question of how we view the Swedish model and whether this holy status that it has in the Swedish debate is justified.
Felix: We are holding on to the idea of the Swedish model, rather than what it actually means for workers today. Especially when there’s a lot of very right-wing parties that are arguing very much for the Swedish model and how important it is to keep it, because right now as it stands it works very much in favour of the employer rather than the worker.
GEP: Wouldn’t one alternative in Sweden be to empower the gig workers as employees and therefore force the platforms to negotiate with gig workers?
Jacob: If you had legislation which made the gig workers be classified as employees, that in one way over-rides the Swedish model because you have legislation, but on the other hand it strengthens the Swedish model because it provides the basis from which workers can organise and push their demands. So the question is in what way do you want to preserve the Swedish model?
Felix: If they were to be classified as employees they would get access to the social welfare system we have which is very much based on your employment status. What this reservation from the Labour Committee says is ‘we shouldn’t let the EU tell us who is employed and who is not’. And what the right-wing parties, and some left-wing parties, want to do here is to change the rules so that all people who work also have access to social welfare systems. But that also creates other issues, including legitimising this as a separate form of employment. Because they would get access to social welfare but their status as workers would still be very weak and this would hinder labour union organisation.
Jacob: So this creates a situation where the state is helping the gig workers, they claim, but in reality they are just helping the gig companies to survive without hiring someone to take care of the wages and administrative personnel, instead the state is doing that. What would be preferable, especially in the context of the Swedish model, is that these workers would be able to unionise and create some more institutional power, not just get some state support.
GEP: Are there examples of gig workers organising collectively in Sweden?
Jacob: Yes. The biggest gig company, Foodora, actually signed a collective bargaining agreement in Sweden last year. Which was kind of ridiculous, because the same day they signed the agreement, it came out that they had a side company where a lot of the riders at the company where employed, and these workers weren’t part of the agreement. So you had hundreds or even thousands of the workers who were using this app to deliver food, wearing the company’s logo, but they weren’t employed by the company and they weren’t part of the collective bargaining agreement.
In response to this, some people who were involved in the transport workers’ union (which signed the agreement), started a kind of non-union network called RIOT, it stands for Riders Off Track. They were pushing for creating a movement within the union to actually build some power against the company to stop them from doing these kind of work arounds. From what I heard the company treated this group quite harshly, and people got fired and quit.
Today this situation is actually worse than ever, I think now the main part of the people working at this company, which brags about their collective bargaining agreement, most of the workers aren’t included in the agreement. So they can say ‘we are the good guys, we have this agreement’, but then actually they exclude very many people from that, so it’s kind of a PR thing.
GEP: What about the wider trade union movement, does it have a position on the question of gig worker regulation?
Jacob: I think they have been quite slow in reacting to the gig economy, sadly. But I think it’s getting a bit better, and they are better than the politicians in understanding the problems.
The most active union in the debate around the gig economy is the union of transport workers, since there is a lot of focus on the delivery workers, even if they are not all of the gig economy. The union recently published a report where they have this perspective of accusing the gig companies of undermining the Nordic model by making it harder for workers to unionise. Which I think is very good that they are having this perspective, and are abandoning the perspective that the Swedish model is only about the non-intervention of politicians. It’s actually also about having the foundation to organise from.
GEP: Yes, so there’s these two different perspective on how the Swedish model is being undermined. On the one hand you’ve got the perspective which says ‘any interference from politics undermines the model’, and on the other hand you have the trade unions saying ‘the model is being undermined in practise because these workers can’t organise and are being exploited by the platforms’.
I think you said in the report that the number of self-employed people in Sweden is rising, so if the gigification of the Swedish economy starts to become more normalised, then that also is a threat to the Swedish model?
Jacob: Yes, definitely. There’s definitely these two ideas, one is about non-intervention in the labour market, and then there is this other one, which feels like the forgotten perspective, which is actually about this power imbalance between workers and the employers.
GEP: Have the recent developments we have seen around the Uber Files scandal, and the wider turmoil in the gig economy due to the inflation crisis, where a lot of the food delivery companies are struggling, especially in grocery delivery, are these things changing the debate in Sweden about these issues?
Jacob: I think we haven’t really seen this crisis hit Sweden yet. I know there has been a lot of stuff happening in Germany for example with companies pulling out of the country, but I don’t think we have seen this in Sweden yet, although we probably will in time as we have the same problems as most other countries in Europe and the US as well with inflation and a bad economic situation.
GEP: Did the Uber Files register in Swedish political life?
Jacob: No. The Swedish political debate is very uninterested in labour issues, sadly. It’s not discussed.
GEP: The election is on 11 September. The left bloc is likely to win again, I understand, but because they are quite passive on the issue they are probably not going to regulate on the gig economy?
Felix: Yeah. They’ve been so passive, and even though the Social Democrats are the traditional party for workers, a lot of the legislation is controlled by the right-wing ideas because they too talk only about getting more people into work, creating more jobs, etc; the quality of the work and the equality issues doesn’t really matter, as long as they have a job then it’s good.
Jacob: Yeah, it’s good statistics. And I think that is common for both the right-wing and the Social Democrats. I think if there’s going to be any change to that it is not going to come from the politicians themselves, but from a wider change in how we view work.
One of the biggest unions this summer began to push for a six-day work week, and I think that is kind of a hopeful thing because if more unions catch-up to that maybe that can push the Social Democrats and the left bloc into a different direction. But that would be quite a long process, because the politicians really love getting good statistics, and for that the gig economy is a useful tool, even though these are generally very bad jobs.
Felix: We don’t expect much change coming from political parties but more from the grassroots, from workers in unions but probably more from workers who are not currently in unions. Because a lot of people who have a comfortable job and a good salary, they are not interested really in talking about these issues because [they think] it doesn’t really affect them in a way. A lot of people are in unions but not a lot of people are actually active and care much about these labour issues. Here it is more a service that you pay monthly and you get help when you need to, and it’s almost like a habit for these workers to be in the unions. So we are trying to lift the issue more, especially to people who are working, so that they know that this will affect everyone, not just the people at the bottom of the pyramid, because in the long run the employment status of many workers is going to be assaulted.
Jacob: Yeah, because that’s also something we talk about in the report and in our analysis of the gig economy in general. In a lot of cases there is nothing that is really stopping these models from spreading into more sectors of society. Especially now that we are facing this economic crisis that’s an increasing possibility, as companies will try to implement some of these things that have been tried out in the gig economy, in the logistics and services sector, for their own companies to cut costs and so on. So I think it’s getting more important than ever before to lift this up as a political question and as something that effects people in very many parts of society, not necessarily just those who work in the gig economy today.
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