On 7 February 2024, Arnaud and Karthika were interviewed by two high school students from Gymnasium Celeanum Zwolle, Hadi Kishawi and Joep Jansman. The purpose of this was to provide insights into the gig economy that would inform their school essay (profiel werkstuk) on the gig economy. More specifically, we discussed the evolving nature of the gig economy, particularly the online segment, and to help them understand its impact on the labour market. Below is an FAQ section based on this interview.
What is the gig economy?
Karthika: The gig economy refers to a segment of the labour market characterised by short-term, flexible work arrangements facilitated by digital platforms. These platforms connect gig workers, who are usually independent contractors or freelancers, with clients needing specific one-time, occasional or recurring tasks or services to be completed. The gig platforms can be broken down into two modes: on-site gigs, which are completed at the client’s premises (such as ride-sharing, delivery, cleaning), and online gigs, which are carried out on computers (such as translation, programming, content creation).
How does the gig economy differ from traditional labour models?
Karthika: The gig economy prioritises flexibility, independence, and a task-oriented approach compared to traditional employment. The most important difference is the intermediation by platforms, turning a bilateral relationship between a gig worker and a gig requester into a trilateral one with the gig platform included. This wasn’t covered by traditional labor law, which was designed for straightforward employer-employee relationships. The online gig economy further differentiates itself from the onsite gig economy by enabling work to be performed remotely, often with workers and clients located in different parts of the world.
Who are gig workers and what are the benefits of working in the gig economy?
Arnaud: Anyone completing a job through a platform qualifies as a gig worker, typically without needing specific credentials. Gig workers are usually independent contractors or freelancers, which leads to variable pay and the ability to work for multiple organisations simultaneously. The benefits include flexibility and autonomy, allowing workers to set their own schedules and balance work with personal commitments. It provides opportunities for additional income, entrepreneurial ventures, skill development, and access to a global marketplace. The online gig economy particularly benefits those who prefer or need to work from home, offering a wide range of remote job opportunities.
Who are the gig clients and what are the benefits of hiring gig workers?
Arnaud: Clients or platforms connecting workers with requesters often don’t classify as employers to avoid legal constraints like paying social security contributions and ensuring labour rights. This depends on the legal framework in the jurisdiction where work is performed. Hiring gig workers allows businesses to quickly scale their workforce based on project needs without long-term commitments. It offers cost savings by reducing expenses related to benefits and office space, and provides access to specialised skills that may not be available locally. The online gig economy allows businesses to tap into a global talent pool, ensuring that they can find the best expertise regardless of geographic location.
What are the drawbacks of working in the gig economy?
Arnaud: Gig workers often face unstable and unpredictable income, lack traditional employment protections and benefits such as health insurance and retirement plans, and experience high competition and dependency on technology. It can also lead to social isolation due to remote working conditions.
What are the drawbacks of hiring gig workers?
Arnaud: Employers face a lack of long-term commitment and loyalty from gig workers, potential communication challenges, risks to security and confidentiality, and dependence on gig platforms, which can disrupt business operations.
How does the government influence the gig economy?
Karthika: Government influence varies by country, with efforts to balance fostering innovation and ensuring workers’ rights. For instance, the Dutch government has ruled that some gig workers are employees rather than independent contractors, affecting companies like Deliveroo and Uber. Regulations often address employment status, working conditions, and social security contributions. The EU has recently reached a political agreement on a directive to improve working conditions for platform workers, impacting millions. This platform work directive includes regulations on algorithmic management, prohibiting automated decision-making based on psychological states or personal data. Platform operators must conduct data protection impact assessments and consult workers’ representatives before implementing monitoring systems. While one of its provisions (Article 1) mentions the directive’s applicability to all digital labour platforms with substantial connections to the EU, the online gig economy faces additional regulatory challenges due to its cross-border nature, requiring coordination between different national legal frameworks.
Is there a difference in the impact of the gig economy on developing countries compared to more developed countries?
Karthika: This is an interesting question that we cannot answer completely. In developing countries, gig work often provides higher income opportunities and employment that might not be available otherwise. The online gig economy allows workers in developing countries to access higher-paying markets in developed countries, benefiting from the global demand for their skills. However, since the supply of gig services exceeds demand, workers may underbid each other, leading to a race to the bottom of wages and labour standards. In developed countries, the focus is more on adapting regulatory frameworks to protect workers’ rights while accommodating the gig economy. This highlights a complex and varied impact of the gig economy across different regions
What does the future of the gig economy look like?
Karthika: As scientists, we prefer not to predict the future. However, based on current trends, the gig economy is expected to continue growing due to technological advancements and changing labour market dynamics. It will likely promote more flexible work arrangements but may also lead to increased competition and regulatory changes aimed at protecting gig workers’ rights. The online gig economy, in particular, is poised for significant growth as remote work becomes more accepted and integrated into mainstream business practices.