Sociology Index

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GIG ECONOMY

What do delivery couriers and Uber drivers have in common? They're all part of the gig economy. Gig economy is comprised of temporary and flexible jobs, and companies hire independent contractors and freelancers instead of regular full-time employees. Gig economy undermines the traditional economy of regular organised full-time workers who generally don't change positions. Gig economy workers don't focus on a lifetime career. The Taylor Review has now called for a new category of worker that gives those in the gig economy some employment benefits and ensures a decent wage. The government has now responded to the Taylor review saying there will be stricter enforcement of holiday and sick pay rights for people working within the gig economy. The gig economy, where workers get hired typically for short durations, can lead to transactions of over USD 250 billion over the long term, the report by the consultancy firm BCG said. The gig economy can serve up to 90 million jobs in the non-farm sectors in India with a potential to add 1.25 per cent to the GDP over the long term. Gig Economy is also known as the Freelance Economy.

Gig workers also benefit from the flexibility to work when they want, but they rarely have the security, stability, and benefits of a full-time job. Service sector companies like Uber are built on the gig economy. A U.K. Supreme Court ruling points to the latest threat to companies that rely on gig workers. The rapid growth in the gig economy suggests that this is the future of work. The Chartered Institute for Professional Development estimates that there are 1.3 million Britons employed in the gig economy.

A recent report of the Fairwork Foundation served as a severe indictment of the work conditions for gig workers in India, with Uber ranked at the bottom along with Swiggy and Zomato with a score of 1/10, while Ola tied with Housejoy, BigBasket and Amazon to score 2/10.

In June 2017, a group of seven Uber drivers in South Africa successfully won a court case which classified them as Uber employees. Their grievances were typical of those trying to make a living in the gig economy: poor working conditions and pay, high costs, and the fact that all seven of them had been recently deactivated from the platform without any explanation.

“A few years ago, when I started meeting up with drivers – I would meet drivers in South Africa, India, and people were often saying that this work will fracture people and isolate them,” says Jamie Woodcock, a researcher at the Open University who is working on a book about the gig economy. “But these companies have created a new global workforce, that has shared concerns.” Times editorial board has recommended that voters in California reject a November ballot initiative, backed by Uber and others, that would exempt Uber and a host of other app-based work companies from a state law that classifies many gig economy workers as employees. Gig economy companies should be required to establish benefits funds which give workers cash that they can use for their particular emergency, like health insurance or paid time off.

What is the gig economy?

The gig economy gets its name from the fact that each piece of work is akin to an individual gig. It has previously been called the sharing economy and the collaborative economy. However, at its core are app-based platforms that dole out work in bits and pieces, like making deliveries, driving passengers or cleaning homes. Not all gig economy roles are based around a technology platform. Gig economy workers can also work for more traditional companies, which have changed how their staffing system operates. Delivery drivers for Hermes, for example, also work on a piece-by-piece delivery basis, though their employer does not have the tech startup origins often associated with this type of work. Gig economy work and zero-hour contracts have similarities. Both treat workers as contractors and offer no guarantee of pay, but gig economy roles are normally paid per piece, while zero-hours contracts are paid hourly, but with no set minimum. Both are the result of companies trying to cut or limit staffing costs, and can leave workers unsure how much they'll earn. While the gig economy commoditised your skills, passion economy is focussing on monetising your individuality and personality.

What are the problems in the gig economy?

The companies ruling the gig economy say they bring the flexibility to work whenever you like. Critics argue that not only do workers lack protection and fair pay, but the roles aren't as flexible as they seem, as workers are incentivised or pressured to work when the companies need them. Workers aren't paid benefits such as holiday or sick pay, and reports suggest some aren't making minimum wage. MP Frank Field suggested some gig economy workers pull in less than 2.50 an hour. That's legally possible because gig workers aren't seen by the companies they work for as employees but contractors. In a speech to the Trades Union Congress in September, John McDonnell said a Labour government would give gig economy workers similar rights to those in permanent work, including sick pay and maternity pay. His comments were welcomed by trade unions who have argued that gig economy companies have been running roughshod over workers’ rights for years.