Why the gig economy sounds better than it is

Written by Charlotte Elmehagen on 20th June 2017

With its promises to liberate workers from the traditional 9-to-5 work environment, provide flexibility and eliminate office politics, the reality of the gig economy has turned out quite the opposite.

Most contractors employed in gig economy–type jobs lack health care and retirement benefits, are at the mercy of their employers’ scheduling needs and , despite being promised flexible hours, find themselves little more than glorified service workers.

Although part of the sharing economy, the gig economy has absolutely nothing to do with sharing; instead, it’s about service, in the way it defines the served and the servants.

If the gig economy is going to continue its growth, we need to seriously examine how it’s regulated  to ensure that it’s not ripping off workers while delivering services to the more privileged.

While those who are benefiting from the current economic model can pay people to run their errands, many of those on the other side of the fence are being pushed into the gig economy by a job market that neither offer fair pay nor dependable hours. Workers are faced with an employment outlook that is more precarious than it’s been in decades. The difference is that the gig economy, generally, has a lower barrier to entry.

So if the gig economy is characterised by low pay, a lack of benefits and a predatory relationship where the business risks are burdened by the worker, why are workers still ‘playing ball’? Simple – they have no other options. The gig economy isn’t about helping people who are being left behind; it’s about exploiting them because they have to accept whatever work they can find.

Companies operating in the gig economy may use positive slogans and present hopeful yet misleading statistics about their operating practices, but they benefit from the dire economic circumstances that their workers experience. As a result, these companies have no incentive to rectify the situation.

Instead, it uses automation not to make a better world for everyone, but to put the risks of doing business on the back of workers without providing them with fair compensation. And although it doesn’t ‘promote’ inequality, the business model is well suited to take advantage of the growing divide.

As a result, this isn’t the kind of economy that is inviting the majority of people and that is committed to improve workers’ quality of life. Instead, it sounds like the fantasy of techno-libertarians brought to fruition, where we’re all forced to compete against one another for work that provides little pay and no benefits, while facing a lack of job security when much of that work becomes automated.

If the gig economy is going to continue its growth, we need to seriously examine how it’s regulated  to ensure that it’s not ripping off workers while delivering services to the more privileged.

Unfortunately, mutually agreeing what employment status a worker actually has is not a simple issue. Complications arise around the amount of control an employer has over the employee, such as whether the worker can be disciplined by the employer. And whilst some ‘offenders’ continue to argue that the current laws and regulations makes it ‘impossible’ to offer workers employment contracts, this clearly isn’t the case.

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The courts have gone some way, as shows in the recent Uber, Pimlico Plumber and Deliveroo cases, and it’s been helpful that we’ve seen some decisions looking at the reality of the gig economy but what we need is a better clarification from the government around what constitutes employment, worker and self-employed status. However, reshaping the gig economy cannot only come from the authorities, there has to be some innovation and willingness from within the business community. We can then, perhaps, expect it to become sustainable and fair.