The federal government has committed to introducing legislation to protect gig economy workers after a historic agreement between Uber Australia and the Transport Workers Union.

The rideshare giant struck a deal with the local union on Tuesday after clashing for years over workers’ rights.

The agreement outlines four key principles that the TWU hopes will create better working conditions for Uber Australia’s more than 100,000 workers.

A leading workplace lawyer described it as a “remarkable” achievement for both Uber and the TWU, but warned that more regulation must “absolutely” be introduced to protect gig economy workers across the board.

Tweet from @TWUAus

What have Uber and the TWU agreed on?

Up until now, Uber workers have been treated as independent contractors with no access to benefits such as sick leave, minimum wages or union representation.

But on Wednesday Uber agreed to give its workers minimum and enforceable earnings, a mechanism to resolve disputes, and the right to set up a collective body to represent their interests.

The agreement is similar to the deal the TWU struck with rival rideshare company Doordash in May.

Minister for Employment and Workplace Relations Tony Burke said the agreement was a “step in the right direction”.

“I’m really happy for the TWU and for Uber and for what they’ve been able to deliver together here,” he told Sky News on Wednesday.

“It’s just about making sure 21st-century technology doesn’t mean 19th-century working conditions.”

According to the TWU’s website:

“At the core of the deal, Uber and the TWU support the federal government legislating for an independent body tasked with creating industry-wide standards regarding:

1. “Minimum and transparent enforceable earnings and benefits/conditions for platform workers based on the principle of cost recovery, taking into account the nature of the work;
2. “A cost effective and efficient mechanism to resolve disputes such as deactivation of relevant platform worker accounts. Any dispute resolution mechanism must be fit for purpose for platform work;
3. “The rights of platform workers to join and be represented by the relevant Registered Organisation are respected and that platform workers have an effective collective voice;
4. “Appropriate enforcement exists to meet these standards and objectives.”

What will the agreement mean for workers?

Trent Hancock, of Jewell Hancock Employment Lawyers, told The New Daily the agreement was a positive step for Uber Australia’s workers.

“It’s quite a remarkable agreement to have somebody like Uber come forward and propose greater regulation in how they engage workers,” he said.

“I think it’s a recognition on the part of Uber and the Transport Workers Union that this is an area that does require attention [and] does require enforcement of minimum standards for the benefit of its workers.”

Mr Hancock said he expected the agreement would have immediate benefits for Uber workers.

“Contractors that are engaged in the gig economy can very rarely have the ability to organise on a collective basis,” he said.

“So that ability to unionise to bargain on a collective basis will always give those workers a greater capacity to obtain better standards.”

On top of this, drivers will be paid more, given more leave entitlements, and the incoming appeals-resolution mechanism will enable them to raise any grievances they have with the platform.

Minister Burke said he hoped the move would empower Uber’s workers.

“The person on a bicycle racing through traffic to deliver some fast food to your front doorstep is not running a small business. They have none of that independence or power,” he said.

“And to think it was going to be OK for their rights to fall off a cliff was never sustainable.”

The government plans to introduce legislation to protect gig economy workers before the end of the year.

What will the agreement mean for consumers?

The inclusion of a minimum wage for Uber workers will certainly add to the company’s expenses.

But it is currently unclear whether these additional costs will be passed on to Uber’s customers.

Uber Australia boss Don Taylor told ABC Radio National that while the company currently expected “that wouldn’t be the case,” the details of the new system were yet to be mapped out.

Minister Burke said on Wednesday that he wouldn’t be surprised to see some small price hikes following the agreement.

“It may mean that there’s a marginal increase in getting a pizza delivered to your home or something like that,” he said.

But Mr Hancock said rideshare and delivery drivers were often the “victims” of “unsustainable rates” in a competitive marketplace, with rival companies often fighting to deliver the lowest possible price for consumers.

“We’ve heard horror stories, including through our firm, of contractors working in the gig economy … for such miserable rates in such miserable conditions,” he said.

What happens next?

The government has announced it plans to extend the powers of the Fair Work Commission to set rates of minimum pay for workers in the gig economy.

Minister Burke hopes to introduce the new legislation to Parliament by the end of the year.

“What we need to make this agreement real … is some minimum standards put in place by the Fair Work Commission to make sure that good employers or good platform providers aren’t just undercut by rogue businesses out there,” he said.

Mr Hancock said concrete regulation by the FWC was “absolutely” necessary.

“My understanding is [the agreement’s key principles] are not enforceable between the parties in any tangible way,” he said.

“We do need that regulation. We do need that law coming from federal Parliament. And it sounds like now, with a Labor government, we’ll have it.”

Mr Hancock said he expects other gig economy businesses to follow Uber and Doordash’s lead in establishing similar agreements.

“I think it certainly will encourage others in that space to turn their mind to how better to take care of the workers that they engage by their platforms,” he said.