The Dark Side of the Gig Economy

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Gig Economy, LawsThe digital world is creating a brand new marketplace of work and workers. Technology allows work to be sliced and diced like a pizza and shipped across the world. The scattered pieces of work are then reassembled back by someone before being sold to the consumer. If the nature of work changes it is only logical that a new breed of workers will emerge who can work in this fragmented manner. Such workers are the “Gig Workers”. The value generated creates the Gig Economy. More than 3.5 million people have registered as freelancers from India on Freelancer.com. Several other sites are springing up. The new world of work is here to stay.

The new world of work is growing

Apps and online platforms are connecting service providers and customers to do everything from online tasks to driving for ride-hailing services or cleaning someone’s home. Sharing personal assets (like an unutilized room in your home) is yet another way in which people are earning money. Platforms make it easy to sell your creations online. It is possible to earn a living by uploading funny videos on YouTube. Going to work may simply mean switching on your laptop as you roll over in bed. Being an entrepreneur is going mainstream. It gives people a chance to balance the demands of managing children or aging parents or a sick family member with earning a living.

One third of the global workforce considers themselves as freelancers according to the 2015 Global Free Agent Research by Kelly Services. The numbers are rising, and now freelancers make up 34% of the workforce in the Asia-Pacific, 31% in the US, and 27% in Europe. According to Pew Research Center, 24% of American adults have earned money in the “platform economy” over the last year. The gig economy employs people from blue-collar jobs to white collared jobs.

Employer and the not-quite-employee

The platforms for the gig economy can be either labor platforms like MechanicalTurk where people contribute time, effort and skills. These tend to pay less than the capital platforms like Airbnb where people put up a piece of their possessions like homes or cars.

The tradition equation between the employer and employee is changing. The Pew Research Center says around one-in-five feel that these jobs place too much financial burden on workers (21%) and let companies take advantage of workers (23%), while just 16% feel that this type of work offers jobs that people can build careers out of.

It is easy to paint a rosy picture of the gig economy when we club those who use the capital platforms and labor platforms. Supporters will speak of the gig economy as a source of supplementary income and flexibility. That inevitably refers to people who have other sources of income. Since employers do not classify the gig workers as employees they are not eligible for healthcare or other benefits. That puts those on labor platforms at a particular disadvantage.

Identity and meaning

Assembly line workers have always done only a piece of the work. That has led to low engagement and alienation of the workers. How is that different for the gig worker? The gig workers are not co-located and usually work alone. They rarely get to know who is using their work and rarely have any emotional connection with the “employer”. The lack of opportunity to socialize with the co-workers and see the different pieces come together is a great source of meaning and identity. In case of the gig worker, meaning and identity are both diluted or even absent. So are opportunities to learn, build skills and reach one’s potential.

If work changes, so must the law

Uber, which started in 2009, now has more than 7,00,000 active drivers in the United States alone, which is nearly three times the number of taxi drivers and chauffeurs in the country in 2014. Gig workers have flexibility but no paid sick leave, no time off and certainly no pension. The government may need to legislate the labor platforms where there is an urgent need redefine labor laws. The laws must not stifle innovation but must certainly prevent exploitation.

If the nature of work changes, can the law be far behind?

Do you think there is a need for new laws that govern work and workers in the Gig Economy? Should the labor platforms be governed by more stringent laws than the capital platforms? Should governments wait for a while before drafting laws that are unique to this new emerging world?

I would love to learn how the gig-economy is working in your country. Is it fair to the entrepreneurs as well as to those who provide their labor?

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What makes people find meaning at work <Read this>

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