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Education and Employment References Committee
Corporate avoidance of the Fair Work Act 2009

FUNG, Mr Timothy, Chief Executive Officer, Airtasker Pty Ltd

Committee met at 08:33

CHAIR ( Senator Marshall ): I declare open this hearing of the Senate Education and Employment References Committee's inquiry into corporate avoidance of the Fair Work Act. I welcome everyone here today. This is a public hearing, and a Hansard transcript of the proceedings is being made. The hearing is also being broadcast by the Australian Parliament House website.

Before the committee starts taking evidence, I remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee, and such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to a committee.

The committee generally prefers evidence to be given in public but, under the Senate's resolutions, witnesses have the right to request to be heard in private session. If a witness objects to answering a question, the witness should state the ground upon which the objection is taken, and the committee will determine whether it will insist on an answer, having regard to the ground on which it is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera. Such a request may of course also be made at any other time.

I now welcome Airtasker. I understand that information on parliamentary privilege, and the protection of witnesses and evidence has been provided to you. Is there anything you want to add to the capacity in which you appear before the committee today?

Mr Fung : I am one of the co-founders of Airtasker.

CHAIR: Thank you very much for appearing before the committee today. The committee is very interested in the new economy, the gig economy, and we really appreciate the effort that you have made today. I now invite you to make some opening remarks, which will be followed by questions from the committee.

Mr Fung : First of all, a brief description of what Airtasker is: Airtasker is an online and mobile marketplace, and we connect people with local members of the community who complete tasks. The first thing that I would say in that regard is that we 100 per cent stand by the concept of being a marketplace model and not an agency model. The way that we would differentiate those two things is that a marketplace gives control to its community members or its participants in the marketplace; whereas an agency is a much more structured and defined type of arrangement, where the marketplace creator itself would control a lot of the price and structure of what goes on on that platform.

It is important to say that we are quite an objective platform. Our aim is to offer as much transparency as possible to the constituents of our platform. We believe that this transparency and the communication between the people is the main service that we offer. As well as helping to improve some of the efficiencies of existing industries, I would say that a very large proportion of the jobs on Airtasker involve the creation of new industries and new jobs that simply would not exist if a platform like Airtasker did not exist. The current statistic that we have is that about 40 per cent of the jobs on Airtasker could not be defined into any existing vertical of work that exists in the traditional economy.

We believe that the main reason why this new kind of work can exist is the improvement of the sharing of people's reputations. By decreasing the friction that it takes to find someone who can help you with a job allows a lower barrier for what can become a job. For a job that might be worth $50, it is not worth going to the yellow pages, looking up someone's details, getting three quotes, speaking to those people on the phone and all of those things. We very much aim to reduce that friction to create new jobs for people.

Importantly, we do not structure those jobs ourselves. We do not say to people, 'You will do this kind of job and this is how much you're going to get paid for it.' The work itself is defined by the consumer, the person who is acquiring the service, and the price is determined by quotes that the workers create for themselves. Again, it is not defined by the marketplace. That is really important for us.

Also, I will quickly point out that the quotes that are shared between the prospective worker and the potential customer are not shared with other workers. We have no interest at all in a race to the bottom; in fact, the way that Airtasker makes money is by a service fee that is applied to the overall price of work on the platform. In fact, we are completely incentivised for workers to be well treated and to be paid more. The more they earn, the more we would earn as well. But we do not ever force them to do anything, and we certainly do not tell them how much to be paid or anything like that.

Overall, I wanted to end by saying that our mission statement is really to empower all people to realise the full value of their skills. We believe that the typical definition of 'skills' has not really taken into account all of the skills that individual people have, and we want to create a platform that allows them to share those skills and to realise the value of those skills.

CHAIR: Thank you. Can you give us some examples of the jobs you say would not exist?

Mr Fung : Sure. We have people who say, 'I'd like you to come and get rid of a spider in my house.' It might cost $30 to get rid of a spider in a house. That is something that a lot of people want to have, but it would be fairly difficult to start a business in a traditional manner that just goes around and does that. But someone may be close by; maybe your next-door neighbour or someone three doors up from you knows how to do that. That is one example. Another might be standing in a queue to go buy an iPhone. Another might be to do a flash mob for someone to do a wedding proposal.

I appreciate some of the humour in some of these, and we have a little chuckle when we see these things too. I would say that, anecdotally, they are quite humorous, but, when you aggregate all those things from the 25 million or so people in Australia, the possibility of creating new industries is actually significant.

CHAIR: Can you tell me the percentage of jobs posted on your website—actually, before I go there, could you explain how one gets a job onto your website in the first place?

Mr Fung : Sure. The way Airtasker works is that you can post a job for free. It does not cost you anything to do that. You can do that via our website or our iPhone or Android apps. Posting a task basically means that you describe a text in free text, you set a deadline for that task—like an end date for that task—and you set a proposed budget. All of that is user-generated content. That then gets posted out to our feed. Workers can then do what is called making an offer. They will have a look at what the job is that is being described. They can discuss that in an open forum with the prospective buyer of that service. Then they will, effectively, submit a quote. On average, you will receive three or four quotes as a consumer. Only you will see those prices, so the other workers cannot see that. You will pick one of those. When you pick a person to do a job for you, you escrow funds into a trust account, and that money is held on trust for the worker. When the job is completed, the worker confirms the job is complete, the consumer confirms the job is complete and the money is released to the worker less a fee that is paid to Airtasker, which is 13.7 per cent of the job value plus 10 per cent GST.

CHAIR: You say you pick someone out of the three or four quotes. Are they able to say: 'I like the sound of you, but you're not the cheapest price. I'd like you to resubmit'?

Mr Fung : You can edit an offer. I would say there is some functionality that we do not have, because of technical limitations. It takes time to build all of these functions. But certainly the intention is that there is no reason why that would not be possible. The main thing to say there is that there is complete choice between the two parties. Both have to proactively agree to enter into an agreement. It is never pushed onto anyone.

CHAIR: What would stop someone saying, 'I'd like you to do this work, but I've had another quote which is less,' even if that was not true, to see if they will do it?

Mr Fung : I think that is certainly something that you could do, but what is really interesting is that we see that people are not very sensitive to price on Airtasker. Price is by far not the main determinant of why people would choose someone on Airtasker. The reason we can say this is that, as I mentioned, when you post a task, you set a budget. What we see is that the average price that a worker will reply with is actually about 30 per cent higher than that amount. If someone says, 'I would like you to do this job and I would like to pay $100 for this,' workers on average will reply with $130, and the agreed price is usually about halfway in between those numbers. So it appears that workers are actually pushing the price up and customers are not being driven to lower the price.

Senator McKENZIE: On that: when you say average, you have done the statistics on that?

Mr Fung : Yes.

Senator McKENZIE: Do you mean average number or average value of the jobs?

Mr Fung : The statistic that I just mentioned there would be in relation to the average price of a job, and that is, effectively, the total prices divided by the total numbers—

Senator McKENZIE: You said, on average, most end up pushing the price up.

Mr Fung : Yes.

Senator McKENZIE: I just wanted to clarify that.

CHAIR: And I guess that depends from where, though.

Mr Fung : Yes. I would be careful to say that averages are averages, but overall we ourselves have a complete vested interest in pushing the price up. In fact, a race to the bottom would only reduce our own revenue. We did that on purpose to align ourselves with the workers of our community, to say, 'Only when you win do we win; when you get paid more, we get a bigger fee.'

Senator McKENZIE: What is the demographic of the people who use Airtasker?

Mr Fung : The platform currently has about 1.2 million registered users. We believe overall it is a very mainstream concept. All of the people in the community are over 18. Our terms and conditions state that they must be over 18 to enter into an agreement—

Senator McKENZIE: It is a bit like Facebook, isn't it? You have to be over 15 to have a Facebook page.

Mr Fung : Yes. We do not do a driver's licence check or anything like that before a user can create an electronic account, but we certainly do put that onus back onto the members of the community to say this is a platform which is designed for adults who are going to enter into a contract. I would say the demographics are really widespread. Again, this is very anecdotal data, but we see three main groups. One is younger students—people who are 18 to 25 years old, studying at university and have some spare time and interesting schedules—

Senator McKENZIE: and no arachnophobic tendencies!

Mr Fung : I would say that would definitely be for all ages! Then we see a big bracket of professional people who have skills, whether their skills be trades, digital skills or otherwise. We see a huge number of those people. Many of those people are mums, freelancers or people who already have some type of other work, and this is supplementary to that. The third group is more senior members of the community—probably 60 or 65-plus years old. These people have—anecdotally, again—complained to us that it is very difficult to get full-time work when they are in that age bracket. So those people are also big users of the platform.

CHAIR: What about companies? Are they also using your services?

Mr Fung : What is quite important with Airtasker is that we do not believe that companies themselves should engage on the platform. We believe in the power of the reputation passport of the individual users. What we mean by that is: if you have done great work, we think you should have a review left for you that says you have done great work, and another individual should be looked at in another way. So we are quite careful that all of the users on the platform are individual people. We do have some partnerships with various companies. One of those is the Good Guys, as an example, but what happens here is that the Good Guys offer a platform to their consumers and those consumers can book another individual person via the Airtasker platform. So it is individual customers interacting with individual installers, repairmen or handymen.

Senator McKENZIE: To install their new dryer or deliver their new dryer?

Mr Fung : We are not currently doing deliveries. The platform is not really set up to do logistics and things like that but certainly installations. We say the installers will define their own prices: what do you want to be paid for doing this kind of work? They can submit that and they have the power to edit that on the fly as well. They also choose their own availability to say: 'I only work on these days' et cetera. We believe that it is superimportant to have both parties proactively buying into the agreement that is being established. We do not ever try and say that, 'Hey, this is just how it's going to be. Just take this.' We know that that is going to result in one of the party's expectations perhaps not being met. It is very important that both sides buy in on what the job to be done is and how much it is going cost et cetera.

Senator McKENZIE: Who are your competitors?

Mr Fung : I would say that our largest competitor now is the job not being created: an apathy, I guess, from consumers. So how many people have a garage full of stuff that probably needs to be cleaned out but they are not going to do it because it is too difficult to do or they have that wall that needs to be painted. Again, it is just going to be left undone. We believe that our biggest competitor in that regard is really just a job not being done or the laziness of the consumer. There are certainly a lot of platforms that have marketplaces for work—like and those companies are generally focused on taking work offshore. They are focused on taking work from Australia offshore and also with quite a heavy price—

Senator McKENZIE: So getting your graphic design, your piece or whatever done somewhere else and being just sent.

Mr Fung : That is right.

Senator McKENZIE: How do we know that you are Australian?

Mr Fung : You require an Australian mobile number, bank account and a postcode to receive funds. It is certainly possible that people do not need that, but our ethos is definitely to create work for other Australians, and so we are very much a local platform creating local jobs.

CHAIR: People advertise an hourly rate as opposed to an all-up cost for the job?

Mr Fung : We have our profiles on the platform which allow free text to be written on them but, in the way that we have designed the platform, there is an objective scope of a job that needs to be completed and a service provider is providing a quote for the completion of that scope. So it is not an hourly rate.

CHAIR: So we would never see an hourly rate actually listed as to what people are to work for on the site.

Mr Fung : Certainly people have the ability to communicate in any way they want through our open communications, but the processes of the platform are not set up to be doing hourly rates; they are set up to be doing this task for this—

Senator McKENZIE: Like piecework?

Mr Fung : Yes. I guess it is similar to the way you would engage with a tradesperson, a freelancer or any other contractor rather than an hourly rate. We think that this is a really important change—and I will provide an anecdote: an example is installing Ikea furniture. I had occasion to assemble 15 stools for our office. I unpacked the Ikea packaging, got out the Allen key and was assembling the stools myself. It was taking me 20 minutes to do one stool. So I figured: if it was 15 stools, it was going to take 300 minutes—five hours—and then I am going to probably have to pay someone five hours at $30; that might be $150. The person that I got to do the job for me came over and completed the whole thing in about 40 minutes, because they knew how to unpack the furniture better than I did. They came in with a pocket drill and equipment that was better than mine and they lived nearby, so it was a superfast job. If you take 40 minutes to earn $150, that person got an effective rate of $225 an hour, which is fantastic. That illustrates the point that different people are able to do things in different times, depending on their unique skills, availabilities, locations or whatever. I would really underline that Airtasker believes heavily in the value of each individual person's skills. Whether they are defined as skills in the traditional way that skills are defined now or whether they are unique skills that are not currently defined as skills, we believe that they are skills all the same.

CHAIR: There may also be plenty of examples where someone has come to do a job and it has taken them 10 times longer than they quoted for because it was difficult to understand the scope of the job over the internet. How is that dealt with?

Mr Fung : We certainly have the opportunity to do cancellations and refunds. We allow the two parties to engage in that themselves. One of the reasons for a cancellation is to say that the scope of the work was not clearly defined. There is certainly no-one who would force that to go through. In addition to that, we are working on a feature that will allow people to increase the amount of money that they want to pay someone for a job in instances where that is the case. If it is disputed, it would go to a cancellation.

CHAIR: What if people turn up to do the work and they are not let in? Perhaps circumstances have changed and it is decided they do not want them anymore and people have still come to do the work.

Mr Fung : I will answer that question by talking about one of the things that we have built: an escrow platform. One of the things that Airtasker has done that I believe is unique is ask the consumer to prepay, effectively, for the task and we put that into an escrow facility. That means the worker can turn up to the job with the knowledge that the funds are there and available for them. Certainly, if they are not let into the house or anything like that, a dispute will arise. When arbitration occurs, it would certainly be taken into account that the person did not let them into the house. There is a dispute resolution process which would be followed.

CHAIR: Who controls that?

Mr Fung : We have a third-party provider. I will have to get the name of that person.

CHAIR: I do not need the name of the person. I am more interested in how that is managed.

Mr Fung : We have a third-party payment provider. They are the first agency, I guess, that the parties would deal with independently. If it goes further than that, I believe it can be taken to the arbitration council of Australia, which is a further independent company.

CHAIR: Are the people bidding for work independent contractors?

Mr Fung : Yes.

CHAIR: How do you know?

Mr Fung : We define in our terms and conditions that, if you engage in a service on Airtasker, you would be an independent contractor.

CHAIR: Do you check their ABN?

Mr Fung : No.

CHAIR: Are they required to have an ABN?

Mr Fung : No.

CHAIR: Are they required to pay tax?

Mr Fung : Yes.

CHAIR: Who by?

Mr Fung : The ATO. We have worked closely with the ATO and have attended a number of workshops with them to educate our workers about this concept of income tax. There was a paper that was released, I believe in 2015, which confirmed that GST was not applicable to be collected by the independent contractors but that income tax absolutely was. We provided some information that was requested from the ATO. We provided that in whole to them this year and last year.

CHAIR: In your view, would it be legal for anyone other than an independent contractor to engage on your site?

Mr Fung : I believe that the structure of the work lends itself to independent contracting, so, yes, I think it is important that they are independent contractors. But I am not an expert in the various categorisations. When I say 'independent contractor', I clarify by saying that I certainly do not think that any form of employment relationship is being created.

CHAIR: Yet someone is engaging someone to do work for them.

Mr Fung : Yes. I would say in a similar capacity to the way that a graphic designer creates a poster for someone, or a tradesperson completes a job for someone, it is similar in that regard.

CHAIR: You said your platform lends itself—and one of the big groups is people aged between 18 and 25 who might be students. How many of them, do you think, are genuine, independent contractors?

Mr Fung : I would have to first look into how it is defined and then have to dig into the information. I would be happy to provide that information, if we create a definition.

CHAIR: Sure. What are your requirements for information from both sides of the equation here—people offering the work and people offering to do the work?

Mr Fung : The platform is designed so that people can participate within a spectrum of information. You can join the platform with fairly low friction—with an email account, a verified mobile address and, if you are going to engage in work, either a credit card payment source or a bank account, if you are receiving money. There are fairly lean requirements to join the platform. What we see is that, as a marketplace platform where people need to be very entrepreneurial, they need to quote on work. It is very similar to any other kind of advertising platform. People will want to provide further information to clarify their skills and their abilities. We offer the independent contractors the ability to do police checks, for example. We offer them to—

CHAIR: When you mean you offer them—you mean you ask them to?

Mr Fung : We allow them to. We say, 'If you would like to display to potential clients that you have done a police check, we offer a facility for you to be able to do those police checks. If the police check comes back with a green, no infringements found, we will display that result on your profile, and that could help you to get more work.' If, in your opinion—

CHAIR: And the reverse: what if it comes back with a problem?

Mr Fung : I believe that we are only told if it is a completely green result or otherwise. In the case of otherwise, we do not show that.

CHAIR: Why would that be?

Mr Fung : We look at most of these things and how they would be replicated in any other scenario. We believe that if a plumber, a carpenter or a graphic designer were to go and do their own police check, because they thought that that was a useful thing to display to their potential customers, they would have the choice as to whether they displayed the result of that or not. We believe that empowering the workers is pretty important in that regard.

CHAIR: Sure. I am trying to think of an example where someone might want to display their police check which was not completely green, but you are saying you would not display that in any case.

Mr Fung : If someone wanted to do that I do not think, in principle, we would have any problem in doing that.

Senator McKENZIE: Like you, I cannot see a situation when they would—

CHAIR: I can see some situations. Some people might have some restrictions around working with children or in other matters. They would not then want to be asked to do a job in those circumstances. I cannot think of many more, but there may be more.

Mr Fung : We would be happy to take special requests like that, if they were asked of us and if we believed that that was important. I reiterate: the main thing for us is as much transparency as possible. Our assumption is that most people would not request to have a police check displayed on their profile, if they were not confident that it would be a green tick.

CHAIR: How do you monitor work that might be advertised, which might need special licensing, special permits or special training?

Mr Fung : On their profile, people have the ability to add information that they want to be able to apply. We do think that this an area where we want to improve our process and our platform, and we are working on a number of initiatives to do this. In the same way that we display verified police checks and identify information with Commonwealth Bank, the ideal scenario would be potentially a similar type of thing with each of the licensing bodies. We want to work really closely with all of the different licensing bodies. In fact, we have talked to a number of union bodies about how we do this in the best possible way. We think it is an incredibly important thing to be able to display these licences, and we think that in the traditional communication platforms that exist now it has not been done in the most consumer-friendly and easy way to digest what the various licences are.

CHAIR: If someone wanted some electrical work done, qualified electricians might quote to do the work, but there may be plenty of other people who could quote to do the work too. Whose responsibility is it to ensure that only the appropriately qualified and licensed people do the work?

Mr Fung : My understanding is—again, I would not proclaim to be an expert in this field—that it is always the consumer's responsibility. If they are ever contracting someone or requesting a service that may require a licence, it ultimately falls back to that consumer to ensure that that person is licensed appropriately. We believe, in that instance, it is really important to educate the people who are using these platforms. So, again, we have worked with a couple of the union bodies to prepare this type of information and we have published that onto our blog and used various other ways to educate people. But I do believe that, overall, there seems to be not enough education amongst consumers about what their requirements are.

CHAIR: Clearly, you are saying it is not an issue for you to regulate or take any response ability for?

Mr Fung : I believe that we were are absolutely incentivised to educate the consumer base. I will leave it at that.

CHAIR: What about jobs that would appear on the surface to be dangerous? What do you do with respect to that?

Mr Fung : We certainly have a number of marketplace rules, which we try to apply in a fair way. We allow users, most importantly, to flag or to moderate content that they believe breaches those marketplace rules. An obvious thing there is anything that is illegal. We essentially have a list of marketplace rules that are published really openly, and the main thing that we have there is a community of people who are going to flag down things that are not appropriate or breach those marketplace rules, which I think is really important.

Senator McKENZIE: Can you give us some statistics on how often that occurs—how often the community polices itself?

Mr Fung : I would have to come back to you with specific information, but moderation is surprisingly massive. The amount of care that people will take in a community and how much they will flag down things, when they own the community and it is for them to be earning money or is their source, is quite amazing. I would go so far as to say that you would be surprised by how large it is—it is probably overzealous policing by community members at times.

Senator McKENZIE: Thank you, and please quantify that for us.

Mr Fung : Sure, no problem.

CHAIR: What about warranties for work done?

Mr Fung : Again, that would be something that would be provided by the independent contractor.

CHAIR: Airtasker have no responsibility at all in that regard?

Mr Fung : We do not take responsibility for the warranty of the quality of the work, no.

CHAIR: What about safety at work—if people are injured during the work?

Mr Fung : Again, what is really important for us is educating our members about where those responsibilities lie. We publish a large amount of information and distribute that to both sides of our marketplace on a fortnightly basis.

CHAIR: Is that publicly available on your website?

Mr Fung : Yes.

Senator McKENZIE: If I am on the app and I want to post a task, where does it tell me my obligations as the effective employer?

Mr Fung : All of the information is stored on, which is the main source of information.

Senator McKENZIE: But it is not on the app at all?

Mr Fung : There are various places where you have to sign off on the terms and conditions, and the terms and conditions reference the marketplace rules.

CHAIR: Why wouldn't you confirm that someone was an independent contractor rather than just assume that everyone on your site is an independent contractor?

Mr Fung : In principle, we simply want to replicate what happens in the existing marketplace. If there is a way to do that without creating a large amount of friction or paperwork, which ultimately would erode jobs on our platform, then we would be happy to do that.

CHAIR: But can the existing system people go and employ people generally from existing businesses?

Mr Fung : I think there is still a huge amount of freelance work that already goes on in Australia, so we are trying to replicate the same processes which occur in those markets.

CHAIR: You started off by telling us this is a marketplace model, not an agency based model, but you later told us that the amount of money people get is not defined by the marketplace. Can you just explain that, or have I misunderstood what you indicated?

Mr Fung : I probably meant to say that it is defined completely by the constituents of the marketplace and not defined by us.

CHAIR: So the marketplace in the sense that whatever the two parties agree to rather than what the overall marketplace might determine?

Mr Fung : Correct. We do not define the scope of the job nor the amount to be paid for that job.

CHAIR: I just want to understand: if that is the case—I understand the concept of the marketplace determining what is there, but we also have rules, regulations and laws about the minimum floor that people need to earn—how do you ensure that that floor, as in the floor we walk on, is maintained?

Mr Fung : So we have published a large amount of information about wages and pricing on our platform, which was supplied by a couple of union bodies that helped us to collect that information.

CHAIR: Actually, which unions were they?

Mr Fung : Unions NSW.

CHAIR: Unions NSW assisted you in putting this together.

Mr Fung : Yes. I believe we met with them recently, and they were quite happy with the action that we have taken to try and educate consumers.

CHAIR: I think we are hearing from them later, so we will see what they—

Mr Fung : They should not be completely quoted on that but, certainly, at a personal level, the people that we have dealt with have been very supportive of the way that we have taken action.

CHAIR: We are just about out of time, unfortunately. Do you have any last-minute questions?

Senator McKENZIE: Internationally, are there any sorts of comparisons for your type of platform?

Mr Fung : I would say: not really, no—we are pretty unique in that way. We often are compared to a company called TaskRabbit, which exists in the US, but I would say, especially in terms of the questions that have been discussed today, it would be really incorrect to compare us in that regard. The reason for that is that they do take quite a stance on the way that work is completed on their platform by defining hourly rates and the types of jobs that are completed on the platform and also by pushing those jobs to their workers rather than allowing the workers to just pick up the jobs that they are interested in at the time that they want to. I would definitely not make that comparison. I cannot think of too many other competitors who are doing a similar thing to us.

Senator McKENZIE: And are you growing?

Mr Fung : Yes, we are growing.

Senator McKENZIE: At what rate?

Mr Fung : The earnings that our workers earned last year grew to $75 million on an annualised basis so that is the total amount that workers are putting in their pockets.

Senator McKENZIE: And you get 15 per cent of that?

Mr Fung : That is right—no, I would clarify in that regard: in our arrangements with partners, sometimes we take a lesser fee than that.

CHAIR: Given the amount of information that you said you were able to put on your website, is it possible that, if you asked for people's ABN numbers or proof that they were an independent contractor, that would be put on your platform?

Mr Fung : I would say that anything is possible. We are happy to work with the various bodies to really support doing the right thing by the Australian economy. Certainly, in terms of what we can do, there are some technical limitations, but what our jobs are is to try and improve the system and make it better for people.

CHAIR: Thank you very much for coming before the committee. That was incredibly informative and interesting. We may have some more questions for you, if you would be kind enough to consider them and respond if you can. We are out of time, unfortunately, so thank you again for appearing before the committee today.

Mr Fung : Thank you.