Gig economy businesses are becoming increasingly more popular as consumers look to have services provided more conveniently and efficiently. If you are thinking of starting a gig economy business, you will need certain documents to protect and govern the various relationships your business will encounter. This article will provide an overview of the main legal documents gig economy businesses often require.
What is a Gig Economy Business?
A gig economy business is a platform, often provided through an online app or website, that connects people who provide a temporary service, ‘gig workers’, with consumers who require that service.
Examples of gig economy businesses are food delivery apps, ride-share apps and other platforms offering consumers access to particular services provided by another individual at the touch of a button.
What Documents Do I Need to Get Started?
You require a number of legal documents to govern your business’s relationships with those in the creation, running and profitability of your app. Generally, to develop the platform itself, you may require the services of an app developer. Accordingly, you will need to draft a software development agreement.
The users of your platform also need to be subject to a set of terms and conditions, so they are aware of how orders, payments and refunds work on the platform. Your privacy policy must also advise how your business will collect, use and disclose their personal information when signing up for or using their platform. If you intend on engaging your gig workers as contractors or employees, you will also require contractor agreements or employment agreements.
Let us explore the above documents in further detail.
Continue reading this article below the formSoftware Development Agreement
If you intend on engaging a developer to build your platform’s app or website, you will likely require a software development agreement between your business and the developer. Often, the developer will have one for you to sign before they begin work. In this case, you should review the developer’s contract to identify any key legal risks before you sign.
If the developer does not provide their own development agreement, you should draft one. In this agreement, you should specify several items, including:
- the services the developer is providing and if there are any milestones for them to meet in the provision of those services;
- whether you will be paying the developer on a fixed fee, hourly rate or retainer basis and whether there is a deposit payable;
- any technical details or specifications about the platform you would like developed;
- if there is a specific person, you would like to develop the platform. Ideally, if you own the platform, you will want the right of ownership or a perpetual, irrevocable licence to use and exploit any intellectual property rights;
- whether you will be reimbursing the developer for any expenses; and
- who will own the intellectual property rights over the developed platform.
Terms and Conditions
Each user should accept the terms and conditions of your platform before they create an account or use your app or website to procure or provide services. They may also sit at the bottom of your website if you wish to make them easily accessible to the public.
This document lets users know:
- how they may use the platform;
- how to create accounts;
- the payment process;
- how refunds and cancellations work; and
- whether there are any limits to your liability should a user make a claim against you.
You need to identify exactly what services you provide. Often this will only be the provision of the platform and payment services. Accordingly, you must try to exclude any other responsibilities.
Generally, you cannot negotiate such terms and conditions. Therefore, it is important to draft them fairly for all parties involved. It is also important to ensure active consent to these terms.
Privacy Policy
Similarly to your terms and conditions, your privacy policy should also be available for your users to read through before they create an account or use your platform. A privacy policy sets out how you will collect, use and disclose the user’s personal information. It will also establish who to contact should they have questions or concerns about privacy.
Contractor Agreements or Employment Agreements
If you are looking to engage your gig workers, or the individuals providing the services on your platform, as contractors or employees, you should also have a contractor agreement or employment agreement with each gig worker.
There are key differences between contractors and employees. If you wish to engage your gig workers as contractors, you should be careful to steer clear of sham contracting. Sham contracting involves misrepresenting to an individual that they are a contractor when, in fact, they should be classified as an employee. Engaging in sham contracting is illegal, and you may face penalties under the Fair Work Act.
Furthermore, you must ensure you have work health and safety policies in place. For example, if your gig economy involves car transportation services provided by individuals, you will need safety guidelines prescribing appropriate work safety practices.
As an employer, understand your essential employment obligations with this free LegalVision factsheet.
Key Takeaways
Whether you are setting up a grocery delivery marketplace or a platform to help people find dog walkers, it is important to have the right legal documents in place as you are setting up and before you launch your gig economy business.
If you need help drafting legal documents for your gig economy business, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
A gig economy business is a platform, often provided through an online app or website, that connects people who provide a temporary service, ‘gig workers’, with consumers who require that service.
A privacy policy sets out how you will collect, use and disclose the user’s personal information. It will also establish who to contact should they have questions or concerns about privacy.
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