The gig economy: progressive and positive, or exploitative?

Jan 16, 2018

The gig economy: progressive and positive, or exploitative?

gig economy

noun

noun: gig economy; plural noun: gig economies labour market characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.

"working in the gig economy means constantly being subjected to last-minute scheduling" Origin early 21st century: from gig2 in the sense ‘a job’ + economy.

The gig economy has experienced a boom in recent years, and the UK’s 4.81 million self-employed workers now make up 15% of all people in work, with the CIPD estimating that 1.3 million of these are part of the gig economy. In addition, in 2016 the Office for National Statistics reported that in a single three-month period, a staggering 88% of newly created full-time jobs were self-employed. The Trades Union Congress believes that many of those workers face fewer rights and lower pay and don’t see the boom as being indicative of a wave of entrepreneurialism, but that workers are being increasingly forced to accept precarious employment with low pay.

Indeed, there has been a lot of negative press recently, with a number of high profile cases centred on workers’ rights. Uber, which maintains that its workers are self-employed, and are not therefore entitled to minimum wage, sick pay or paid holiday leave, lost its recent appeal because of claims that it requires drivers to accept at least 80% of the jobs that are given to them, and that drivers are unable to truly choose when they do and do not work. At the same time, and muddying the waters somewhat, Deliveroo won the test case that was brought against it by a group of delivery workers, and the Independent Workers Union of Great Britain. Deliveroo workers have indeed been labelled “self-employed” and therefore not entitled to sick pay, paid holiday and minimum wage.

But with all the negativity, are there any positives to the gig economy? We believe so. The McKinsey Global Institute defines an independent worker as someone who has high levels of autonomy, is paid by job or by task and makes short term commitments to customers or clients, and in a recent piece of research McKinsey found that around 70% of independent workers say they engage in independent work by choice, preferring the greater levels of autonomy and flexibility than traditional employed jobs offer. They also found that those who chose to work independently reported higher levels of satisfaction, enjoyed being their own boss, and enjoyed greater creativity than their nine-to-five counterparts.

McKinsey also talks about the need for technologists to innovate, and find new ways to connect individuals to paid work to sustain the gig economy, and I’m happy to say that we’re doing exactly that. Drivers who sign up with Deliverehub can accept or ignore any jobs they’re offered, and their contracts are made directly with the customer. They can communicate directly with the customer throughout the delivery process, using the in-app messaging service, and there are no unnecessary demands placed on them. They’re not presented with a huge list of deliveries to make in a single day, with a paltry sum paid per delivery. Deliverehub doesn’t use a lowest bid wins system for pricing jobs, and doesn’t allow the reselling of jobs on the open market. Instead, it offers customers a very competitive set price per mile, which is passed on to the drivers, less a small commission. Unusually for this much maligned industry, we’ve made sure drivers can make a decent living.

The Taylor Review was commissioned recently to investigate employment practices in the modern economy, and has spent time looking deeper into the gig economy. So far, its recommendations seem sensible, and it agrees that many workers need and want the flexibility provided by the platforms that connect workers with paid work, and that “gig workers are disproportionately young and racially diverse.” It would be a mistake to crack down on their opportunities to find gainful employment. By tackling some of the challenges of a changing workforce, and providing a platform to connect delivery drivers with paying customers, could we create a happier, more satisfied, and more efficient workforce? I think we can, and that’s something worth working towards.