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NSW begins consultation on personal injury insurance arrangements for food delivery riders in the gig economy

Published on June 23, 2021 by Christiane Al Khoury and Maithri Panagoda AMChristiane Al Khoury and Maithri Panagoda AM

Over recent years the growth in app based food delivery services has symbolised the explosion of the so-called ‘Gig economy’ and the popularity of such services has only increased during the past 18 months of the COVID-19 pandemic. The temporary closure of restaurants and bars and the shift to takeaway meals during lockdowns has resulted in many in the community relying on food delivery services to be able to order food directly to their homes and/or workplaces with minimal contact with others.

Food delivery services are part of what is considered the “gig economy”, and which rely upon a labour market made up of short-term contractors or freelance workers and does not include permanent jobs.

One of the largest and most popular aspects of the gig economy has been food delivery services and it is estimated that the food delivery market has increased six-fold between 2015 and 2019.[1]

The increase in popularity of food delivery services has also resulted in an increase in food delivery riders who travel between pickup and delivery points, either in a car, on a motorcycle, or on a bicycle. Many of the apps used to access food delivery services promise unrealistic delivery times to their customers, meaning that riders are required to get to their drop off address as fast as possible.

One feature of the rapidly expanding food delivery system is heightened focus on the risks faced by drivers including injury and even death. In fact, statistics show that in the latter part of 2020, five food delivery riders lost their lives in Australia.[2]

The NSW Government has set up an investigative Taskforce led by SafeWork NSW along with Transport NSW to look into the fatalities of food delivery riders so that they can determine whether any improvements need to be made to improve people’s safety and particularly that of workers in the gig economy.

The NSW Government has commenced consultation on six possible options to ensure that food delivery riders have proper protection. This includes:

1. increasing education and awareness about existing personal injury and income protections available through SafeWork NSW and Transport NSW;
2. ensuring gig platforms provide personal injury insurance that comply with approved minimum standards for death and disablement, income supplementation and out of pocket expenses;
3. establish a scheme to provide a personal injury insurance safety net for food delivery riders;
4. provide personal injury insurance to food delivery drivers modelled on motor accidents scheme benefits such as compulsory third party insurance;
5. establish a scheme to provide personal injury insurance for food delivery riders modelled on workers compensation protections;
6. extend the workers compensation scheme to cover food delivery drivers and consider them as “workers” under the current legislation.

What does this mean for food delivery riders?

If any, or all, of those changes were to be made, food delivery riders could be protected in a number of ways. A number of the options proposed would include benefits such as short-term income support, medical and treatment expenses for most injuries and lifetime medical care for catastrophic injuries. Some would also include lump-sum compensation for fatalities, non-minor injuries, permanent impairment and death. If riders were deemed “workers” under the workers compensation legislation for example, this would place an obligation on the gig economy platforms to follow requirements which may include providing more suitable duties for injured workers who are able to return to work. This may also include riders being protected from termination for six months following an injury.

For these reasons, individuals and organisations are encouraged to make submissions to SIRA and share their views, experiences and insights on how personal injury insurance can be arranged for riders in the gig economy. Further information on how to make a submission can be found in a discussion paper prepared by SIRA.