Tomorrow's Economy

Making the gig economy work: the big questions

19 December 2016

What are the implications of more and more workers relying on the platform economy?

Ursula Huws

One worker in 40 now relies on the gig economy for the majority of their income. This is one of the startling findings from a survey of five European countries, carried out in 2016 by the University of Hertfordshire for European thinktank the Foundation for European Progressive Studies (Feps) and the European trade union confederation, UNI-Europa. A survey of over 10,000 adults in the UK, Sweden, Germany, Austria and the Netherlands found a high proportion (ranging from nine per cent of the population in the UK to 19 per cent in Austria) experimenting with work for online platforms. For most, this is an occasional supplement to other earnings, but for 2.5 per cent of the population across the five countries it is the main source of income.

Gig, or ‘crowd’ workers are more likely to be from younger age groups, especially in Sweden, where 57 per cent of crowd workers are aged under 35 (compared with 42 per cent in the Netherlands, 47 per cent in Austria, 51 per cent in Germany and 50 per cent in the UK). Nevertheless, crowd workers can be found in all age groups, with between 11 per cent (in Sweden) and 17 per cent (in the Netherlands) of crowd workers aged 55 or over.

The type of work they are doing covers a wide spectrum. At one extreme they are jobs rooted in local economies such as providing taxi services or tasks in other peoples’ homes like cleaning, gardening or household maintenance. At the other is work that can be carried out anywhere in the world using an online platform, ranging from high-skilled work like software development, graphic design or translation to simple ‘click work’ involving tasks that take only a few seconds to complete. One of the surprises of the survey was the extent to which crowd workers typically engage in more than one type of work. Far from the popular stereotype of freelancers who want to specialise in their favourite activity without being tied to the routines of a particular employer, most seemed to be people who were prepared to try any type of work they could get.

The gig economy must therefore be seen as part of a broader picture of the spread of a just-in-time workforce, also evidenced in the growth of zero-hours contracts, temporary agency work and other new contractual forms, such as umbrella contracts, which blur the distinction between employment and self-employment. As the job for life, with a fixed occupational identity and clear employment conditions, is eroded, there appears to be an exponential growth in the numbers of people patching together a livelihood from multiple sources, paid by the task. Meanwhile, some of the practices of online companies (such as the use of ‘apps’ to summon people to work at short notice, record working hours and collect performance indicators) are spreading into mainstream employment. These developments have profound implications for public policy.

Most obviously, they raise important questions about regulation. What is, or should be, the legal status of online platforms? Which bodies should be responsible for regulating and inspecting them? Who should be responsible for the health and safety of crowd workers, their customers and members of the public with whom they come into contact? How should they be insured and licensed? And what is their employment status.

At a broader level, these developments create major challenges for social security systems. How can workers claim benefits if they do not know from one hour, day or week to the next if or when they will be working?

Finally, we must ask how new platforms can be developed from the bottom up by local actors to deliver local services in ways that benefit local economies.

Image credit: Headcase / CC 2.0