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What is the Gig Economy?

What exactly is the gig economy and why should you care? 

The gig economy is sometimes referred to as the ‘sharing’, ‘collaborative’ or ‘platform’ economy, and means that a worker will be paid for each ‘gig’, rather than by the hour. Gig workers are self-employed, freelancers and contractors, and therefore are not entitled to a guaranteed minimum wage, sick pay, annual leave, maternity/paternity leave, pensions or any of the other benefits and protections that employees might take for granted. Couriers and drivers are the most often cited type of gig worker, and there has been a rise in gig workers in recent years, accelerated by the development of apps and platforms, but musicians, producers and construction workers can fall into the category too.

Figures of UK gig workers vary, with the Chartered Institute for Professional Development estimating that there are 1.3 million gig workers in the UK, a parliamentary report stating that there are five million self-employed workers in the UK (15% of the population) and the TUC saying that 10% of UK workers are in ‘precarious work’. Many argue that a lack of clarity in the terminology means that we really can’t be sure. For example, there isn’t a strict definition for what a ‘gig’ is - a project, a task, a 5 minute job - so who counts as a ‘gig worker’?

Okay... What’s the big deal? 

The gig economy is a phrase heard more and more, with companies like Uber and Deliveroo being publicly criticised for their approach to their workers, and Uber being ruled against in court in October 2016 after claiming that their drivers were contractors and not employees. 

Supporters of the gig economy argue that workers can benefit from flexible work that can be fitted around other commitments - for example, students who want to earn a little extra cash alongside their studies. The issue with this is that some organisations exert control over their workers, pressurising them to work when it suits the organisation rather than the worker themselves. It’s this power balance that is also often criticised in zero-hour contracts, where staff are paid an hourly wage but are not guaranteed any number of hours per week. Using gig workers and zero-hours workers are ways that companies can manage their costs, while leaving workers uncertain of how much they’ll earn.

Gig work is sometimes referred to as ‘bogus self-employment’, since workers can be instructed and directed by the organisation in the same way an employee would be - the time and place of work, how many hours per week and when, uniforms and other details can be specified in contracts, so from the outside a gig worker might look suspiciously like an employee. The result can be workers who have to juggle several insecure, low paid gig jobs, creating financial uncertainty and not allowing the independence and freedom that are usually associated with working for yourself. Some gig workers, such as drivers, also have extra costs to worry about, like fuel and insurances which come out of whatever they earn - given that some have estimated the average hourly wage is around £2.50, some workers might not be left with much at all.

So what next? 

The Uber case was something of a landmark, with the decision expected to set a precedent over the coming years. Earlier in 2017, a London firm called Pimlico Plumbers appealed against a previous ruling that said one of its long-serving plumbers was a worker, rather than a contractor - they lost the appeal. Also this year, a courier with logistics firm City Sprint won an employment rights case, as a tribunal found that she should be classed as a worker and not self-employed. These outcomes have highlighted the issues around gig working, and are expected to set the tone for how workplace rights for gig workers will be managed. However, there are calls from trade unions and others for the burden of proof to be on the organisation rather than the worker, that the company in question should have to prove that the worker is not an employee, rather than the cost and pressure being on the worker in taking the organisation to tribunal or court.

It’s a lack of formal definition, some argue, that has given rise to the public disagreements over what an employer owes its workers. In February, ACAS released updated guidance for employers on employment statuses - employee, worker, self-employed - which can be found here; workers being entitled to basics like the national minimum wage, holiday pay and protection against unlawful discrimination, but not rights such as maternity/paternity pay or the right to request flexible working (as employees are).

The Taylor Review, published in July this year, went some way towards suggesting ways to give gig workers the rights enjoyed by employees, but not as far as some were hoping. The review recommended there be a new label for workers: ‘dependent contractors’. While they would be entitled to some employment benefits, such as statutory sick pay, a key concern is with the enforcement of these rights. Even if there was guidance on what employers should provide to their workers, would all companies follow such advice unless forced to by a clear and enforceable law?

There are more questions than answers at this stage, with constant development and debate around the position of and protection afforded to gig workers - some of whom choose this type of work, and many who don’t. Policy will need to adapt to the changing landscape of work, and we hope it catches up sooner rather than later - with the amount of press and public attention on the issue, we’re hopeful! In the meantime, Indycube and Community will continue to build the network, membership benefits and representation to help our lovely Indycubers feel less alone and precarious.