Is the GIG Economy Promoting Inequality?

Gig employment, such as driving, takeout delivery and freelancing is growing easier and more convenient thanks to mobile apps such as Uber, Deliveroo, Fiverr and Airbnb. However, gig work is much older than these apps. In the UK, ‘gig economy’ has increased exponentially over the last 7 years, accounting for millions of jobs

Since 2009, the word "gig economy" has caught the attention of part-time freelance labour, but the gig economy dates to 1915, when jazz musicians developed the term "gig" to refer to performances. In 1995, 10% of all Americans worked in alternative employment, such as temps, contractors, or ‘on-call’ labour.

There has been an increase in so-called ‘flexible work’, with digital companies such as Uber and Deliveroo sparking a revolution.

The gig economy is made up of three components: gig workers, platforms, and service recipients. The sole emphasis of this study is the online gig economy. The rapid growth of Internet technology and mobile terminals has resulted in the creation of a powerful platform, considerably boosting the efficiency of temporary labour distribution and extending the audience and scale of the gig economy.

Workers in the gig economy are actually more commonly called "workers." However, a worker is someone who is financially dependent on an employer, unlike an employee who is indirectly employed or has no regular working hours.

The gig economy places independent workers halfway between corporate workers and self-employed workers. It has been shown by many studies that the majority of inequities can be attributed to the uncertainty of identity among gig workers. Since they have not signed a formal contract of employment, they are not entitled to the same compensation as contracted employees, meaning they do not have access to pensions, maternity or paternity leave, sick pay, holiday entitlement or any other benefits. Furthermore, it is difficult to protect their rights as during employment disputes.

The competition for work in the gig economy has become unfair and unrealistic. As a result of such circumstances, there will always be drivers whose salaries are driven to the bottom and beyond.

Uber is an example of this. As Uber floods the market with drivers and lowers its fares, it is entitled to expand its market share. Yet it has not been charged with allocating work to those drivers, let alone doing so fairly or effectively. As a result of the lack of a salary floor or any other forms of protection, competition for jobs has become unfair and unrealistic.

Another source of inequality in the gig economy is the dual labour market. Aside from those who earn a supplement and can fit "gig" work around other commitments, there are those who earn a supplement as well commitments and are generally content with their lot. Similarly, there are people who earn a sufficient living via high-density routes that provide regular (enough) labour.

Most ‘gig workers tend to work long hours for little pay. Some people have also been subjected to harsh treatment. Uncertainties concerning work schedules, shift alternatives, hourly pay rates, delivery bonuses, management communication failures, and the usage of mobile technologies all promote a unilateral form of employer control, with policy consequences for justice, equality, and employment legislation.

The gig economy makes it nearly impossible for workers to collectively bargain, further reducing their bargaining power. When workers do not interact with one another, especially in narrow geographical areas, it is difficult for them to come together for their own good. The gig economy has made some progress, and additional unions may form as a result of its expansion.

In addition, non-payment or payment that is below the agreed-upon sum is caused by a lack of control. In the freelancing economy, wage theft is a frequent problem, and the only recourse is to go to court, which is not always available.

There are concerns about the gig economy, particularly regarding labour rights. It is common for workers in these businesses to be classified as independent contractors.

Businesses categorised employees as independent contractors to avoid employee payroll taxes, while also avoiding the need to offer benefits, such as maximum working hours and paid time off. This resulted in enterprises providing lower prices and increasing revenue as a result of reducing labour costs.

According to TUC, In the UK, over the last five years, the proportion of the working population performing platform work at least once a week has increased as follows:

• In the last four years, delivery/driving has quadrupled (from 1.9 percent in 2016, to 6.1 percent in 2019, rising to 8.9 percent in 2021).
• Since 2016, household services have more than doubled (from 3.2 percent to 6.5 percent to 7.9 percent by 2021).
• The number of errands run nearly tripled between 2016 and 2021 (from 2.3% to 3.8%).
• The percentage of remote online digital tasks has more than doubled since 2016 (9.6 percent in 2019 to 11.9 percent in 2021).

What can be done?

TUC has previously written about the dangers of the gig economy and is putting pressure on Government for change as they say the government must stop letting gig economy platforms off the hook – as well as calling for workers to have greater trade unions and individual rights, such as:

• To enable unions to speak with workers about the benefits of membership, they need a right of access similar to what is available in New Zealand.
• Employees and workers should be covered by a new definition of 'worker' that applies to all current employees and workers.
• By giving workers adequate notice of shifts and banning zero-hour contracts, zero-hour contracts can be banned.

Download Our eGuide- 'Labour Compliance, Get Out Of Jail Free Card'