What is the Gig Economy and is it out of Control?

The gig economy has grown rapidly in recent years as people attempt to gain more independence when it comes to how much money they can earn and the hours they work.

Everything from Uber to food delivery and couriers are part of the gig economy. It has been a contentious issue for some time now as governments are coming under pressure to lay down new laws and labour regulations to protect workers.

There have been instances of companies involved in the gig economy who have taken advantage of these participants in a negative way and this has led to many calls for change.

The main demands are for some basic form of employee benefits as well as an assurance of a decent wage. This doesn’t mean that the same perks of full employee status are sought, just some basic protections.

With the explosion of growth in the gig economy, it seems ever more likely that this is the way future employment is trending towards with more and more people moving away from traditional employment. The pressing concern is the absence of job security, little to no benefits and uncertain pay.

What exactly is the gig economy?

The premise of the gig economy is very simple. A gig is a one off activity that somebody does in exchange for payment and in this case people can take on as many or as few gigs as they want. It has been estimated by the Chartered Institute for Professional Development that there are currently 1.3 million people in Britain involved in the gig economy.

Usually this economy is based around app platforms that provide work to participants in the form of gigs – such as home cleaning, driving people around or being a courier. There are other names commonly used when talking about the gig economy such as the “collaborative economy”, the “platform economy” and the “sharing economy”.

While the majority of gigs revolve around technology based platforms, not all of them do. Traditional businesses have been altering how they hire and use staff so as to cut costs and become more efficient.

Therefore they utilise the gig economy to complete jobs for them on an as needed basis rather than paying somebody a full time wage.

What is the deal with zero hour contracts?

A topic that usually comes up when discussing the gig economy is the comparison with zero hour contracts. They both view workers as contractors whereby there is no guarantee of work or pay. The difference is that gigs are usually a fixed price per job whereas zero hour contracts are paid on an hourly basis.

While these approaches are beneficial for the companies as it reduces costs associated with staff, it leads to uncertainty for the workers themselves.

Is the gig economy out of control?

Those who provide employment via the gig economy promote the flexibility of these gigs. However a lot of people are complaining that workers are not being adequately protected and fairly paid.

There are often issues as well whereby workers are pressured into working at certain times when companies need them which infringes upon the flexibility of these jobs.

There are no benefits for when workers are sick or on vacation, while some do not even earn the minimum wage. While this is currently legal, there is no doubt that something needs to be done urgently to address these obvious flaws.

In the UK, the Taylor Review was set up to look at these issues and make suggestions for the government to implement.

One of their main proposals is to create a category of worker in between a contractor and a full time employee called a “dependent contractor.” This would mean that those in this category would receive some form of wage protection and benefits.

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