Gig work (short bursts of work, or a variation of the ‘gigs’ scored by musicians) in the sharing economy is on the rise, but will it be our new normal in future? And if it is, what will this mean materially for workers?
From the onset, it’s important to clarify that gig work is still a very small proportion of overall activity in the labour market. Estimates of the number of gig workers in the US and the UK have varied so far, and because of differences in definition or problems with measurement, consensus will be difficult to reach. Cautious estimates range from 600,000 to five million (high estimates of over 50 million in the US are likely being conflated with the total self-employed), yet economists are certain that they are seeing continuous growth in the use of on-demand platforms, such as Deliveroo and Uber, for finding work.
It is the growth potential, rather than the current reality, of gig work that is fuelling the debate about whether this trend is exciting or alarming. However, while there may be many voices, most are arguing the same four perspectives.
Those in favour of the trend tend to say:
1. Gigging offers workers more freedom and flexibility.
Who says this*: mainly platform providers, their investors, and some gig workers (likely to be working casually for platforms)
As technology continues to drive changes in the labour market, a familiar refrain can be heard about why on-demand platforms are increasingly being used to find work. These platforms offer workers the freedom and flexibility to set their own hours – they can work as little or as much as they want, for a short term or as long as they need to. When they want time off, all they have to do is turn off the app.
In some respects, on-demand platforms in the sharing economy are freeing workers by putting the technology into their hands whereas it was previously in the grasp of managers. The entrepreneur Tim O’Reilly analogises this well through comparing Uber’s ‘independent contractors’ to, for example, Amazon or Starbucks’ armies of part-time workers. Although Uber does not consider its drivers to be employees (thereby negating their claim to certain rights and protections), companies like Amazon and Starbucks use scheduling software to ensure that few frontline workers get more than 29 hours (which would activate full-time benefits in the US). In effect, being an ‘employee’ in a low-wage sector is of relatively little material benefit in a world where corporations are constantly trying to cut corners on costs, including through moving away from reliance on full-time workers.
2. Gig work is a new route into the labour market for those who might otherwise struggle to participate.
Who says this: Platform providers, their investors, and some gig workers who really benefit from lower barriers to entry (including women with caring responsibilities, migrants, and young people)
We’ve read stories about “Uber Moms”, women getting behind the wheel after years of raising their children; migrants escaping the French banlieues through turning ridesharing into an entrepreneurial pursuit, and young people able to keep chasing their dreams by taking on tasks for a bit of extra cash. While all anecdotal, they do suggest that the ease of signing up to an on-demand platform is attracting a wider pool of willing workers.
However, those against gig work maintain:
3. Gig workers are being manipulated and exploited by platforms.
Who says this: Trade unions and some workers (likely to be increasingly dependent on platforms for their livelihoods)
While some gig workers may feel empowered by platforms to be their own boss, others, in turn, are questioning whether they are really in control. One signifier of self-employment is the ability to set your own rate, which is only possible on some platforms in the sharing economy. On other platforms, algorithms decide what your rate is for you.
The majority of gig workers are said to be supplementing their main income, but there may be a (possibly significant) minority that has come to depend on platforms to find work. It is these workers who feel at the mercy of platform providers and the subtle ways in which they can exert power over users (i.e. through denying access to the app for anyone who falls below a certain reputational rating, differential pricing to influence the times workers will drop what they’re doing to take on a gig). They have assumed the burden of risk on behalf of platform providers, thereby responsible for their own insurance and other forms of protection (in the UK, this is less about healthcare and more about the right to a minimum wage, paid leave, pension plans, training and skills development, and safe conditions on the job). It is this sense of exploitation that serves as the basis for myriad lawsuits against on-demand platforms in the US and the UK, including Handy, Instacart, and Uber for starters.
4. Gig work has triggered a ‘race to the bottom’.
Who says this: Incumbent businesses and related trade bodies or associations; trade unions; some gig workers and some workers in traditional (incumbent) industries
Keep in mind that it’s not just Uber’s drivers in revolt, but that taxi drivers have been taking to the streets for a while now. Beliefs are converging and both parties are rallying around the view that gig work is triggering a ‘race to the bottom’ of the labour market in terms of pay and conditions. As a company like Uber attracts more drivers, it can appear as if the market for private hire (or transport overall) is being flooded by supply, bringing down wages for all involved. Since Uber hiked its fees (in the UK commission for new drivers went from 20 to 25 percent), drivers also have to spend more time on the road to make up the difference in cash.
This goes beyond Uber, although many see Uber as the catalyst (hence the term the ‘Uberisation’ of work). In the same way that scheduling software has enabled Amazon and Starbucks’ armies of part-time work and the rise of zero-hour contracts in the UK, access to gigs on-demand (with very few pre-requisites for training, certification or experience) are changing the way that all workers are experiencing the labour market, especially in low-skilled, low-wage sectors (but also progressively in highly-skilled, high wage sectors; for example, see PwC’s ‘Talent Exchange’). Incumbents and their allies are warning that this shift will undermine the quality of service for consumers in the long-run, but their legitimacy is weakened by an agenda of self-preservation.
There is truth to all of these perspectives, complicating efforts to intervene and regulate. We need a better understanding of who is participating, how they are affected, and the scale of the problem for both gig workers who feel exploited and those who are working in traditional industry. The recent paper by MaRS tries to take a holistic approach, exploring the ‘user experiences’ of gig workers and their established competitors in Toronto, but it does not engage with the underlying tension here, which is whether the very nature of what we understand to be an employee is changing. As the debate heats up, this question will be the one we urgently need to figure out.
*These are not exhaustive lists, and purposefully omit academics, journalists and other commentators who may be divided on this issue are and are not directly affected or involved.