We are witnessing a watershed moment for the gig economy. An agreement between the Transport Workers’ Union and the two biggest food delivery platforms in Australia, DoorDash and Uber Eats – which together hold 70 per cent of the market – could see the first minimum standards established for gig workers in any sector.

It represents a fairer and more sustainable pathway for thousands of workers.

The proposal, which must still be ratified by the Fair Work Commission, has been hard won and a long time coming. For a decade, the major platforms resisted minimum standards, maintaining that workers were independent contractors and that the imposition of employee protections would deny these workers the flexibility that they currently enjoy.

Three major developments helped to shift this thinking.

The first was the Albanese government’s second tranche of the “Closing Loopholes” reforms, which initiated a world-first experiment.

Rather than seeking to retrofit gig work into employment, the government created a whole new category of “employee-like” workers and gave the Fair Work Commission powers to make rules for them. Key segments of the gig economy were within the reforms’ crosshairs: Ride-share, food delivery, last-mile delivery, and care platforms.

The second major development was the TWU’s application for minimum standard orders, which it made in August 2024. While progress to date has been slow, the application set in motion proceedings that will ultimately enable the FWC to impose minimum standards upon food delivery platforms.

By making a deal now, which is part of the proceedings, the TWU, DoorDash and Uber maintain some control over a process that might otherwise have been decided for them.

The final development was the announcement that Menulog, formerly the third-largest operator, will wind down its operations. This will push their customers and workers towards the two dominant platforms that remain.

Menulog’s approach had differed from the other players, in that it tried – and failed – to move its business towards employing delivery workers directly. With this competitor gone, and with the reforms now available, the moment finally arrived for food delivery workers to receive better protections.

So, what is in the deal that has been negotiated?

First, the centrepiece is a guaranteed minimum pay rate. This earnings floor will apply only when workers are actively performing deliveries. So, it is not a conventional hourly minimum wage but will give workers greater certainty about their earnings.

Second, the deal requires platforms to provide greater transparency around delivery requests, enabling workers to make more informed choices about the orders they accept.

Third, in response to workers’ continued frustration with auto-generated responses and overseas call centres answering their queries, the platforms have committed to creating new communication channels, with workers in the future able to raise concerns directly at a local level.

The deal also provides much needed clarity around insurances and strengthens these workers’ ability to be represented by a trade union.

While these are positive and overdue developments, they do not fix all the issues facing the sector.

Foremost, it does not give these workers the same earning certainty as employees. Critically, the minimum pay rates will not cover waiting times between deliveries – which can be extended unpaid periods depending “when” and “where” these workers are.

Moreover, the proposed standards do not deal with some of the other issues raised around this type of work, such as the absence of compulsory super contributions.

Nonetheless, the announcement marks a major shift in substance and in tone, with the union and businesses finally aligning on key issues that have divided them.

The proposed minimum standards now sit with the FWC. It will review the proposal, which if accepted will become a standard for the entire sector, not just the parties that negotiated it.

Other smaller food delivery platforms may object; for example, they may have concerns about the pay rates agreed by the major platforms. Similarly, food delivery workers may feel that the deal, which does not pay them for the time between deliveries, is not good enough.

So, if rates are going up – even if it is not all the time, and maybe by not that much – who is going to pay? It is likely to come from consumers and restaurants, both of whom pay to access the platforms, in the form of higher prices or higher fees. This might also complicate what it means for workers’ income if customers become less willing to tip.

While it’s too early to tell what the effects will be in this dynamic and complicated market, the agreement moves in the direction of improving working conditions, and will hopefully eradicate some of the vulnerabilities that workers face when delivering Australians their dinner.

Dr Alex Veen and Associate Professor Josh Healy are members of the Discipline of Work and Organisational Studies at the University of Sydney Business School. Dr Tom Barratt and Dr Caleb Goods are members of the Discipline of Management and Organisations at the University of Western Australia Business School.