The ‘gig’ or ‘sharing’ economy has been described as both empowering and exploitative. We look at this newly emerging phenomenon in the world of work.
Freelancers are familiar with the idea of no contract, no fixed hours and no holiday pay. And finding work online is nothing new. But gig workers have taken the idea of flexible work to a new level and as usual, technology has been the driver. Online peer-to-peer platforms such as Deliveroo and TaskRabbit post jobs that are more likely to take minutes than days while crowdsourcing sites ask workers to submit a ‘hidden bid’, for each task, keeping prices (and earnings) incredibly low in a global marketplace.
WHICH PLATFORM PLEASE?
Online platforms match supply and demand by connecting buyers and sellers of services. They’re accessed via an app or website and most operate a ratings-based marketplace with in-app payment.
There are two kinds of platforms in the gig or sharing economy:
Asset-based platforms which allow you to share the use of your car, your home and other under-used items.
Labour-based platforms which allow you to share your skills and time.
Some platforms offer specific services, while others are much broader. Each has a different way of operating and charges its own rate of commission, but most consider gig workers to be self-employed because they choose their own hours.
HOW BIG IS THE GIG?
Not as big as you might think. According to a recent report by Human Resources specialists CIPD, 1.3m people in the UK are currently working in the gig economy. The Royal Society of Arts put the figure at 1.1m, estimating that 4% of working adults aged 18-70 are giggers. But the potential for growth is huge. The RSA found that one in four 16–30-year-olds were interested in some form of gig work in the future.
The gig economy is often included in the general move towards self-employment, but it’s not the most popular form. According to the Office for National Statistics, about 40% of the new jobs generated since 2008 are self-employment. But most of that growth has been in well-paid pay sectors such as law and management consultancy and may have been motivated by tax advantages.
You might assume that most work in the gig economy is unskilled. In fact, the RSA found that:
59% of jobs are professional, creative or admin
33% are skilled manual or personal
16% are driving and delivery
Platforms such as TalMix and Talent Exchange offer experienced consultants to businesses who need to fill a skills gap. But needless to say there are plenty of sites such as Hassle specialising in cleaning services and (the most visible giggers) delivery drivers.
WHY GIGGING IS GREAT
- You can keep up your other interests as part of the ‘slashie’ set of photographer ‘slash’ delivery drivers or drummer ‘slash’ dog walkers. 62% of gig workers use platforms to boost their income – to save for a holiday, for example.
- You can (usually) choose what hours you work. For people with caring responsibilities this may be the difference between earning and not earning.
- As a self-employed person you pay lower National Insurance contributions (for now).
- It makes the most of the world’s resources, sharing underused assets, whether that’s your flatpack-assembly skills or your spare room.
- You’ll improve your profile and get more work. Platforms help people find you.
THE DOWNSIDE OF ON-DEMAND
- Gig workers often don’t have as much flexibility as freelancers.
- The sharing economy undermines the National Living Wage, automatic pension enrolment, parental leave, sickness and holiday pay. All too familiar to anyone who’s self-employed…
- Opportunities for stable, part-time work stay limited because employers can use contractors to meet shortfalls in their staff.
- There’s not much opportunity to develop your skills (unless you include making a flat white last 3 hours).
- Rates of pay can be very low, especially if you have to bid against workers from around the world. Delivery drivers often don’t get paid to travel between jobs.
WHAT NEXT FOR THE GIG ECONOMY
There has been some backlash against the gig economy. Uber, accused of exploiting its workers has been completely banned in some countries and in the UK has lost its right to call its workers self-employed. Delivery giant Hermes are facing a similar investigation.
Many people, both in favour and opposed to the gig economy, have called for the government to take action. Sharing Economy UK is lobbying the government to support platforms and help the gigging economy grow and in July 2017 the government published the Taylor Review into modern working practices, focussing on the gig economy. The review recommended a national strategy to provide ‘good work for all’ including a good work/life balance. It suggested that those who prefer flexible working should be free to continue, but with better conditions.
Although the gig economy has increased the number of people in work, tax and National Insurance rules mean it has also had a negative impact on the public purse. It’s also increased the number of people without a private pension. The HMRC have set up the ‘Employment Status and Intermediaries Team’ to crack down on companies who unfairly deprive individuals of employment rights. It’s possible that soon, all self-employed workers may be legally required to take out a pension (with tax relief on contributions), or that a transaction tax will be introduced to help pay for gig workers’ retirement.
The gig economy poses all sorts of possibilities and challenges. Handled carefully, it could offer opportunities to workers, consumers and businesses.