The Gig Economy, Put Simply

By Editor in Chief Cameron Broome

The “gig economy” is a term you should expect commentators to use a lot during 2017. So what does it mean exactly? Here the “gig economy” shall be, Put Simply.

The gig economy: what does it mean?

Musicians tour the country playing gig after gig. The more gigs they play, the more they earn (and vice versa). If they so choose, they can gig every night. However, there is no contractual obligation to play a certain number of gigs; the ball is in the court of the musicians. However, music venues can also host as many (or as few) gigs as they choose. Again, there is no contractual obligation to host any gigs at all.

The “gig economy” works in the same way. Employment is semi-casual. Employers do not offer fixed hours contracts but instead offer hours as required. Employees can then work as many (or as few) hours as they so desire, subject to work availability. Examples include Deliveroo staff, Uber tax drivers and freelance writing/editing work.

Opportunities

• Flexible employment contracts arguably make the UK economy internationally competitive, helping to attract foreign direct investment (important post-Brexit)
• Working fewer hours can give individuals more opportunities for leisure time; recent polling suggests 65% of employees on zero-hours contracts are happy with their work-life balance, compared to 58% of people on regular contracts

Challenges

• Gill (2002) suggests gig economy work is rarely a choice; it is more of a necessity as a means of survival and can create huge financial insecurity for individuals
• Perrons (2002) suggests freelance work (specifically creative work) can erode the work/life divide, compounding the double shift many women already undertake
How it’s featured in the news recently
Uber employment tribunal
• Two employees claimed Uber was being unlawful by not paying holiday/sick pay
• Case taken up by GMB union; fought for holiday pay and national minimum wage
• Tribunal ruled that Uber staff are classified as workers and are not self-employed
• Uber may have to give drivers back-pay for unpaid benefits (applies to the UK only)

Deliveroo strike

• Deliveroo delivers food from restaurants to customers via bikes and motorbikes
• Employees are paid £7 an hour, plus £1 for every delivery they make
• Deliveroo proposed changing its payment scheme such that employees would receive £3.75 per delivery (with no fixed hourly pay-rate)
• Employees average two deliveries per hour but clearly this can vary due to weather/traffic, meaning some employees could have earned below the new national minimum wage of £7.20, which came into effect in April 2016
• Workers organised a series of strikes on 11th August across Central London
• Customers were frustrated by canceled orders; story made national headlines
• Aware of the damage being done to the negative publicity, Deliveroo were forced to U-turn on the proposed new pay scheme after negotiating with their employees and reaching a settlement, leading to a public apology from CEO William Shu

Suggested wider reading

• General gig economy reading, reviewing how it shaped the global economy during 2016: http://www.pymnts.com/gig-economy/2017/gig-economy-year-end/
• Uber employment tribunal ruling: http://www.bbc.co.uk/news/business-37629628
• Deliveroo strikes: https://www.theguardian.com/business/2016/aug/15/deliveroo-boss-says-sorry-for-pay-dispute
• Optimistic opinion piece on the recent emergence of the gig economy in the UK: http://filibuster.org.uk/2016/10/30/the-gig-economy-time-for-a-change-of-tune/

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