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Unpacking the gig economy is harder than you think

5 Sep 2018

The gig economy seems simple, but there are a lot more layers than you might realise.

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The gig economy is a term generating a remarkable amount of buzz over the last number of years, as reports of its benefits and welfare-based issues are intermingled in the media landscape.

While there are certainly new trends making themselves known in the world of work (namely technological advances), the gig economy itself has existed in some form for centuries. Prior to the industrial revolution, the idea of a fixed job with set hours was a rarity.

What has changed?

The Taylor Review, the UK government’s recent in-depth review of modern work, shows that the public interest in the gig economy has spiked. It is worth nothing, though, that while the term is relatively new, the practices surrounding it certainly are not. Short-term contracts, payment by task or assignment, and a level of worker autonomy (or isolation) have been in the world of work for centuries.

What’s different now, though, is that the modern workplace has many protections in place such as sick leave (something the trade union movement was instrumental in attaining), which some say are now threatened by the gig economy.

The leveraging of digital technology to create app-based platforms such as Uber and Upwork has also revolutionised how certain businesses and workers operate. The gig economy is now on demand and easy to access.

A report from June of this year shows that the US economy now has 16.5m people working in “contingent” or “alternative work arrangements”. The same report also noted that the gig economy may not be as large as we all assume it is.

Not as straightforward as it seems

The problem with analysing the gig economy lies within the term itself. It encompasses those who are doing precarious work to supplement meagre incomes as well as successful freelancers using crowd-work apps and other more financially comfortable workers.

An accurate analysis of the gig economy needs to examine far more criteria than just the casual nature of the work. A 2016 report from the McKinsey Global Institute makes the important distinction between those who are doing the work as free agents, compared to casual earners looking to supplement their income and people who are taking on gigs due to dire financial circumstances.

Gig economy has its benefits

David Kelly, EMEA general manager at work scheduling platform Deputy, said that both businesses and workers can benefit from the new landscape. “Increasingly, people want the freedom to take on as much or as little work as they need. For some, the ability to work part-time on hours which suit them is ideal to their lifestyle.

“Likewise, for businesses operating in industries where demand for labour fluctuates, such as the hospitality sector, the gig economy provides managers with access to a sizeable workforce, which can fill in where needed.”

Alex Hirst and Lizzie Penny, joint CEOs of The Hoxby Collective, a virtual agency whose members work flexibly, say many of the members enjoy being able to fit work around childcare or care work, as well as simply having the freedom to create their own hours. They added that “the negative mental health and wellbeing implications of enforced presenteeism” can also tempt people to begin working flexibly.

Valid criticism

While this all sounds well and good, negative aspects of certain sectors of the gig economy still need to be addressed. Ed Molyneux, founder and CEO at cloud-based accountancy software provider FreeAgent, noted that aside from Uber losing an appeal around workers’ rights in the UK, there are still many workers “that do not have any protections in place”.

He added: “While these workers may have a flexible schedule, they’ll be working long hours and are often reluctant to take time off when they’re ill because they don’t think they can afford to.”

This was echoed by SIPTU’s head of communications, Frank Connolly. He told “A lot of the people doing that type of work are put under pressure to work intensely long hours because they don’t get the return on a normal eight-hour shift.” Connolly added that while some people certainly benefit from the gig economy, in certain cases it is a “euphemism for insecure work and uncertain hours”.

As well as the lack of stability in certain gig-based arenas, the absence of safety nets such as sick pay and holiday pay can add even more pressure to already stressed workers. While many people are enjoying the benefits of creating their own schedules and choosing projects, the reality is, that is not the same gig economy experience shared by others. Connolly said the issue is across all industries that SIPTU represents, in both the public and private sectors.

Freelancer stress

Even freelancers using apps or websites for highly skilled work feel the pressure. Recent research led by Alex J Wood from the Oxford Internet Institute shows that the algorithms used can often create sustained patterns of overwork. Workers may find themselves charging lower rates to even get noticed by clients. Similarly, drivers for ride-hailing companies have often done extra-long shifts to take advantage of surge prices.

Professor in leadership and coaching at Vlerick Business School, Katleen De Stobbeleir, said that financial risk is not the only issue that arises within the gig economy. “These platforms bring about psychological risks, such as social isolation (no sense of belonging to an organisation), high autonomy and responsibility [which] can result in bad work-life balance and feelings of guilt.”

Physical health can also suffer greatly, with the stress hormone cortisol rising faster in people who are ‘on call’ versus people who are not required to make themselves available to work.

A more nuanced approach?

It’s clear that the issue is far more complex than many people may imagine. According to Lara Keenan, partner at Child & Child, Globalaw, while gig or platform-based work needs further regulation, this is not going to be a simple endeavour.

She explained: “The legalities of work become more complicated when individuals work across the globe and, therefore, when entering into different countries’ jurisdictions with different rights and obligations, companies operating within the gig economy need to be mindful of these changes. In addition, no two app-based sites manage their people in the same way. This means that it is very hard to regulate a sector that has so many variants.

“Despite this, just because the gig economy can be a tricky issue, providers should not view this as an excuse to do nothing.”

De Stobbeleir said that the debate needs to evolve from whether you are for or against the gig economy to ‘How can we make the gig economy work?’ for businesses and workers alike. She added that the legal statute as well as psychological factors should be examined, such as isolation prevention and income uncertainty.

The legal classification of an employee also needs to be looked at, Molyneux said. “Historically, the gig economy has been something of a free-for-all, with workers being classed as self-employed freelancers and therefore lacking rights regarding pay and working conditions. Going forward, regulation needs to play a significant role in standardising the working conditions of gig economy workers.”

De Stobbeleir said that a “typology of gig work” could be useful to build regulation around the many different types.

Looking to the future

Keenan said it might be more useful to look at the framing of gig work as a new phenomenon; as a change in traditional attitudes around when, how and where work is done generally.

She said that as younger people enter the workforce, “they will not seek the same way of working as their parents. We are seeing this already with individuals looking at how they want to live their lives and seeking work that reflects those desires.”

De Stobbeleir said protection mechanisms and minimum safety cushions need to be introduced. “Regulation is only part of the answer, in my view.”

More work to do

So, while there are numerous difficulties in getting to the kernel of ensuring the gig economy is fair for every type of worker, it is a problem worth addressing. The Taylor Review called for greater enforcement of workers’ rights and, as Kelly noted, “company reputation does impact consumer decisions”.

While it is a simple phrase, the varying strata of the gig economy coupled with the regulatory thorns make it a much more difficult issue than it initially appears. Let’s hope the resolution creates both flexibility and fairness.

Ellen Tannam
By Ellen Tannam

Ellen Tannam was a journalist with Silicon Republic, covering all manner of business and tech subjects. She keeps her library card close at hand at all times and is a big fan of babies, chocolate and Sleater-Kinney.

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