The growth of the Internet has had many impacts on society and the emergence of a growing “gig economy” is one of the most fundamental.
In its very early days, the potential of the Internet was seen as a way to connect with others around the world. It was really a network of like-minded hobbyists (especially of the “dungeons and dragons” persuasion) and academics.
As big brands began cottoning on to the Internet’s potential to connect them with customers, the Internet changed immeasurably. Money poured into online retailers and platform developers, with seemingly little regard to their financial viability. The outcome was the dotcom boom of the year 2000 – and a resultant crash as the bubble burst over four long years.
It took another 15 years for the Nasdaq to regain its dotcom peak, which it did on April 23, 2015. By this time, many new platforms had emerged. By then, the opportunity to sell your services online in global marketplaces such as Upwork, Fiverr, PeoplePerHour and Freelancer had enabled individuals to sell their work online.
Specialist sites such as CheckaTrade and TrustaTrader (for tradespeople such as builders, plumbers and electricians) have also grown to serve particular niches and connect workers with their customers. Indeed, many entrepreneurs and freelancers have been able to gain work and promote their services using general social media sites such as Facebook and LinkedIn.
These trends have taken off quickly – a recent study by the TUC and academics at the University of Hertfordshire found that 4.7 million British workers are now employed in the gig economy. This figure represents nearly ten percent of the UK workforce – and is double what is was just three years ago. In the USA, the figures are even more striking: more than one third (36 percent) of workers are involved in the gig economy – this equates to approximately 57 million people.
The degree of engagement of these workers varies widely.
For some, the gig economy offers a degree of flexibility not possible in the traditional working environment. Perhaps they have chosen to work on short-term contracts and freelance jobs to travel or finance other activities. Work that can be done online, regardless of location, can be delivered from anywhere in the world – creating a whole new lifestyle for “digital nomads” who travel the world while working freelance to pay their travel bills and living expenses.
In fact, the University of Hertfordshire study found that younger workers are by far the most likely to work in the gig economy: 60 per cent of those working regularly for platforms are aged between 16 and 34.
For others, the gig economy has opened up new opportunities to pursue a new career or side hustle. In this way, the gig economy can be a steppingstone to a career change or even for the creation of a new entrepreneurial business.
It’s also a godsend to small and mid-size businesses, which have a new way to access the skills they need as and when they need them – without having to make expensive hires.
However, the gig economy has a downside too. Because workers in the gig economy are self-employed freelancers rather than employees, they are not eligible to the same rights as an employed worker.
They don’t benefit from sickness benefit, holiday pay, parental leave, pension contributions or other rights.
Some Internet businesses have cynically used the model to underpay workers – offering freedom which is not realized while at the same time instituting worse pay and conditions and greater job insecurity.
Because of this, and as the gig economy accounts for an increasingly greater part of our national economies, it is likely the calls to regulate the sector will become more vociferous.
The movement to prevent unscrupulous employers from using the trend to take advantage of their workers is already underway. In October 2016, Uber drivers in the UK won the right to be classed as workers rather than independent contractors. The BBC reported that “the ruling by a London employment tribunal meant drivers for the ride-hailing app would be entitled to holiday pay, paid rest breaks and the national minimum wage.”
Some have raised concerns about how the gig economy can be regulated to ensure the benefits of opportunity and flexibility can be protected while minimizing the potential for exploitation by employers.
Matt Barrie, founder of Freelancer.com says: “There is uncertainty over regulation in the gig economy and a lot of work is being done around how work is classified.” Nevertheless, he predicts that despite impending regulatory changes, the gig economy, including freelance marketplaces will grow.