The gig economy is booming, new services are born almost every month, and the opportunities for users and workers seem endless. Time to take a closer look if the business model can not only deliver pizza and burgers but also good working conditions.
by Robin Fichtner
A gigantic shift of entire businesses
The model of the gig economy is not completely new, but due to technological advancements in connectivity and the fast growth of e-commerce, the business model has been growing at unknown speeds during the recent years. But what exactly is the gig economy based on? In this business model companies offer temporary positions, for example as a delivery or taxi driver. Independent workers will then accept this job offer and commit to the company on a short-term basis. The gig workers provide a service directly to clients and get hired through the intermediary of a digital platform, such as a mobile app (Uber, Smood etc.). This means that they’re often times not even in close contact with the intermediary platform, but much more with the restaurant they’re picking up the pizza from and the client to whom it has to be delivered. Working in this manner can bring a lot of advantages to the customers, as the flexibility of the services is increased and the costs are lowered. In big cities, an Uber taxi is never more than 5 min away and even my food delivery is ready when I want it.
But it’s not only bringing advantages to the clients, but also to some workers. The flexible shifts allow for a personally-adjusted working day, giving the freedom that workers can decide when and how much they want to work. Furthermore, for many it’s an extra income during some hours, whereas other companies maybe wouldn’t even hire them for the amount worked.
Drive to survive
While many of us are appreciating the high flexibility at a low price level, someone literally has to pay the bills for it. Many workers are working task by task, with no guarantee for future work and therefore also no financial security. And even when the business is booming and there’s plenty of work, the conditions are not always in favor of the people: many work in precarious conditions with low wages and often under pressure in intense working environments, such as big city traffic. Furthermore, in some countries workers have to pay for their equipment themselves (e.g., bike, uniform, backpack) and therefore have to spend money before earning any. This brings some workers into a kind of debt bondage, which can be seen as a first harbinger of modern slavery. Often times, they are denied basic labor rights as they are seen as independent workers and not employees of the digital platforms. Therefore, the jobs lack unemployment insurance, paid leaves, health care or sick days.
Even when these people are not having direct supervisors, the workers are not completely free. They are working under constant time pressure while being rated by the customers. Additionally, since they don’t work for humans, but basically for algorithms that distribute those short-term contracts, many workers find themselves in non-transparent working conditions. Workers can easily get banned by the platforms due to minor mistakes and don’t necessarily receive good explanations for that.
Finally, even when no one is being laid off, gig workers in many countries are paid much less than a living or sometimes even a minimum wage. A video of an Uber driver was trending recently after he received $1.19 tip for a food delivery tour – much less than he would need to cover his expenses.
“Keep (up) the change”
In a business world that is shifting so swiftly to a digital paradigm, it seems that politics are always a step behind. Many companies like Uber are using legal loopholes to offer their services even cheaper, often times at cost of social security. Nevertheless, political actors in more and more countries are stepping up against the negative aspects of the gig economy and aim to improve the work conditions, which includes implementing a minimum wage, changing the status of workers as well as improving the job security and safety. But until this happens, we should ask ourselves how we can improve this situation.
Whenever we can, we should try to raise respect for the gig workers, which are often times essential workers. We should tip them more and be less price sensitive when it comes to commanding a delivery. 5CHF cannot be profitable for a drive of many kilometers and only if we are willing to spend more money, companies can actually adjust their business practices according to the improvements suggested by the state.
The world will even shift more towards the gig economy, leading to a lot of advancements for our society. Nevertheless, we should not forget about the downsides of this system and the vulnerable people that often have to work in it. Only if we refuse to accept that people are suffering in inhumane working conditions and only if we are willing to consume more consciously, this economic shift will be a positive one.
- Romero, A., Figueroa, D., & Novaes, M. (2020). Hungry for rights: Delivery workers in Latin America during COVID-19 – Business & Human Rights Resource Centre. Retrieved June 13, 2022, from https://www.business-humanrights.org/en/blog/hambre-de-derechos-trabajadores-de-reparto-en-am%C3%A9rica-latina-durante-covid-19/.
- International Transport Worker’s Federation. Gig economy. Retrieved June 13, 2022, from https://www.itfglobal.org/en/focus/automation/gig-economy
- Netzpolitik.org. EU startet Initiative gegen Ausbeutung bei Plattformarbeit. Retrieved June 12, 2022, from https://netzpolitik.org/2021/gig-economy-eu-startet-initiative-gegen-ausbeutung-bei-plattformarbeit/
- Business & Human Rights Resource Centre. Gig economy. Retrieved June 13, 2022, from https://www.business-humanrights.org/en/big-issues/technology-human-rights/gig-economy/
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