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THE TROUBLE WITH THE GIG ECONOMY

Reading Time: 3 minutes

As consumers, we’ve never had it so good. These days, you don’t have to lift a finger beyond your nearest smartphone app to have a personal shopper bring your groceries over at almost any time of day or night. Request an uber? Easy. Want a present from amazon delivered on a Sunday? Not a problem.

But what about people working in the ‘gig’ economy that makes all this doable (so-called because they are employed on a gig-by-gig basis – for instance, Deliveroo pays some of its couriers £3.75 per ‘gig’ transporting every takeaway you order through its online app)?

In theory, and according to supporters of ‘flexible working’, these workers enjoy the freedom to work whenever they choose. And this may suit some: for example, students, older workers or parents looking after kids who could use a bit extra to supplement other sources of income. But the reality for most’ self-employed contractors’ is that working in the gig economy means low pay, insecure work, and no employment rights.

What is a gig economy worker?

Gig workers are independent contractors, online platform workers, contract firm workers, on-call workers and temporary workers. Gig workers enter into formal agreements with on-demand companies to provide services to the company’s clients.

The trouble with the gig economy

The main problems with the gig economy – that is, pay, rights and conditions – are to do with a gap in our out-of-date employment laws that gig companies exploit to gain a competitive advantage. By classing their workers as ‘self-employed contractors’, gig employers can neatly side-step any responsibilities towards the people who work for them. Class them as ‘workers’ or ’employees’, and it’s a whole different story:

‘Self-employed’ gig work does not come with pensions, sick pay, holiday entitlement or parental leave. You have to be a ‘worker’ or an ’employee’ to get these fundamental rights.

Gig workers get paid per gig, not by the hour (at least in part). So that Deliveroo worker mentioned earlier on £3.75 a ‘gig’ may make a delivery in the morning, then sit twiddling his or her thumbs all day until another gig comes in. This means many people are earning less than the hourly Minimum Wage, with no financial security.

And so many workers live increasingly ‘on-demand’ – at the mercy of an online app – just to make ends meet. This, in turn, encroaches on essential family time or a healthy social life.

All in all, the lack of the necessary financial guarantees, job security, employment rights or structure around work are a growing source of stress and physical and mental ill-health. Disempowered workers are carrying all the risk, while employers get rich on the profits.

It’s trickier for people with insecure work and income to get mortgages and loans, and therefore to plan for the future. 

And the effects of a gig economy which bids down prices and profit margins has spilt over into traditional mainstream employment, where companies and public services are adopting increasingly precarious contractual arrangements to compete. 

While the government has stated a vague commitment to “ensure our employment rules are up to date and reflect new ways of working,” don’t expect any review of employment law to be a silver bullet for gig workers any time soon.

Who’s responsibility?

In the UK, if you are categorised as a ‘worker’ or ’employee’ you have the right to join a union at work and have them initiate collective bargaining on your behalf for better pay and conditions. But not if you are ‘self-employed’.

This definition is at the heart of the battle unions, and gig workers are fighting against exploitative labour practices. Gig workers are now starting to mobilise and get representation.

One question I have been pondering for some time is, who’s problem will this be? Will it be the service provider like just eat, Deliveroo, Amazon etc. or will they find a way to move the problem on to you the supplier?

It is obvious they want all these people because they don’t drain anything of the company other than a gig fee, so if the government recognises this workforce and grant them rights and protections, then these people will become an issue for all of these gig economy companies. 

The gig economy can offer a lot of flexibility. If used correctly, it can be positive, but my biggest concern is that if misused, the system will likely be open to abuse. The government has to act because if they don’t, then this problem will come to bite them later.

What are your thoughts as a supplier to aggregators? Do you care about the issue? Will you deal with it when the time comes? 


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