Don’t Move – The Gig (Economy) is Up

5 minutes to read

Monday night, 9PM: Martin Place is awash with cyclists in blue and white jackets. With huge eskies strapped to their backs, their eyes are on smartphones and not the road as they deliver burritos and thai food and the rare salad to the bankers still slaving away at this hour. Uber drivers haunt Phillip Street, picking up those clients who don’t immediately stumble onto the train or the line of taxis outside Chifley Tower, and everything ticks along very nicely. Thank you, Silicon Valley.

This is what’s called the “gig economy”, and it’s built off the backs of all those people we just talked about. Well – except the bankers. A gig in this case is a temporary job without much in the way of future prospects or the possibility of advancement, like driving for Uber or riding for Deliveroo. A “gig economy” is a workforce that predominantly features “single project[s] or task[s] for which a worker is hired, often through a digital marketplace, to work on demand.”

Uber is one of the largest ‘gig’ employers, with hundreds of thousands of drivers around the world. Source.

Many companies offering this kind of work extol the virtues of “great fees and hours you can choose“, but in reality the gig economy could be helping create a new class of the permanently underemployed.

The phrase “gig economy” entered popular usage in 2009 when people who lost their jobs in the GFC were forced into gig-style work – designing a logo or setting up a website – just to put food on the table. The gig economy has since overcome its troubling origins to become a full-blown global phenomenon, with a huge number of workers and proponents who want to break off the shackles of traditional employment. According to AiGroup Workforce Development, an increasing number of people are moving towards freelance work models like Uber and Deliveroo. By 2020, it’s believed that 40% of the US workforce will be “contingent” – that is hired on-demand by an employer.

The problem is that gig employment very rarely comes with the benefits you’d expect from traditional work. Most gig workers aren’t actually employees; they’re independent contractors who aren’t entitled to set wages or benefits like healthcare and sick leave. This isn’t an issue for all of them. A Foodora rider I talked to outside Chifley Tower spoke openly about this lack of benefits – and he appeared not overly concerned about it. He’d been in the country three months and thought about benefits as being tied to the skill required to perform in a job. Because working for Foodora didn’t require many skills – being able to ride a bike, red-green colour blindness – he didn’t feel entitled to many benefits, and seemed happy with the wage: $10 a delivery. Deliveries in the densely-structured CBD don’t take very long, so technically it’s possible to make a decent wage.

Deliveroo is facing several lawsuits over its treatment of riders. Source.

But gig “employment” is less attractive when there aren’t any deliveries to make, or you get hit by a car and the global conglomerate that isn’t technically your employer refuses to pay your hospital bills, or when you’re sick, or when you realise that there’s nothing in your superannuation fund because companies like Deliveroo don’t do that sort of thing.

The gig economy is extremely disadvantageous to its workers. Proponents of the concept say that it’s one way for people to free themselves from the tyranny of an office environment or a boss who doesn’t have their best interests at heart. But you’re swapping that to work at the beck and call of an algorithm. These companies aren’t about helping the Average Joe or Jane to take control their financial destiny à la everything Ayn Rand ever wrote. They use independent contractors for the simple fact that it’s a hell of a lot cheaper. 

Silicon Valley, where many gig employers are based. Source.

That approach is starting to become a problem for them. Litigators tend to not agree with the assertion that underpaid workers busting their arses all day aren’t employees; Uber drivers in the UK recently won the right to paid time off and minimum wage, and the company is facing similar suits in a number of countries. Deliveroo is under similar scrutiny, being forced in multiple countries – poor things – to pay their riders what they’d pay an employee. To this end, Uber has acquired a fleet of self-driving cars and a company that works on advancing that technology. Being a taxi service with drivers who are paid fairly was not what its founders had in mind. Soon (if they don’t run out of money first) they won’t need their gig workers – and that’s about as flexible as hours can get.

The gig economy is built around taking advantage of people who can’t say no. Students work in it to make extra cash. That’s what it’s for. But it also pulls in truly desperate people: people who have no other way of making money or need to make more to support themselves or their families in a foreign country. People who are willing to forego benefits in order to eat. This is increasingly being sold as the way of the future, the path that all economies will follow to a better tomorrow. Is that destination worthwhile?