How has the gig economy changed?
For better or worse we are in the era of the ‘gig’ economy. Workers are less likely to commit long term to one organisation.
People are often doing the same kind of work but lack the benefits they would have had twenty years ago. A courier may work for five different companies at the same time. In the name of flexibility, convenience and profitability workers are being asked to sacrifice stability and loyalty.
What are the strengths and weaknesses? And what does the future look like for employers and workers? Let’s take a look…
For better or worse?
‘Gig economy’ is about the prevalence of short term and freelance work over permanent employment. “In the gig economy, instead of a regular wage, workers get paid for the “gigs” they do, such as a food delivery or a car journey. In the UK it’s estimated that five million people are employed in this type of capacity.”(BBC)
During the pandemic we have seen two sides. On one hand the availability of these kinds of jobs has allowed for greater flexibility for employers and workers. Courier drivers have never had more demand and many have become essential workers.
On the other hand gig economy workers in industries that have no demand have lost their income and are not protected like permanently employed workers.
Hospitality workers and people in the entertainment industry have seen their opportunities disappear and their work has completely dried up. There is little to no safety net for workers in these industries.
Predictably, “the proliferation of freelancing and gig work – especially through major gig economy employers such as Uber, Lyft, Turo or Fiverr” has become a significant point of debate (SmallBiz).
The future of the gig economy
What does the future hold for those wrapped up in the gig economy? Maybe we’ll see less entrepreneurs and small business owners and more people will turn to flexible freelance jobs.
However legal developments in the last few years seem to imply otherwise. “Algorithmic management was the innovation that enabled gig economy companies to transform a sea of casual workers into a standardised, seamless, on-demand service.
The Uber ruling perhaps signifies that the future for the gig economy is not as bright as some believe. It is clear that the companies that benefit from the gig economy will not be able to operate if they continue to ignore the labour regulations to which everyone else must adhere (FT).
Nevertheless, “90% of freelancers think the industry has an even brighter future ahead of it.”(SmallBiz). SMEs and entrepreneurs should be aware of the realities of the gig economy when they are looking to expand. What exists now might not be around in a few years.