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Precarity in the Gig Economy - The Issue of Employment

Manoswini Sarkar, Advisor - Reducing Inequalities

Picture Credit: World Finance


First innovated and used by jazz club musicians in the early 1900s to describe greater work flexibility, the concept of the gig economy has come to encompass a variety of short term, fixed contract, flexible jobs with limited stringency. It received a major boost in the early 1990s, when the digital era started taking off and led to various gig economy platforms coming up such as Upwork, Craigslist, Airbnb, Uber, Foodora, Swiggy, Lyft etc. It has changed the nature of work in substantial ways and considerably impacted manager-employee relations. The gig workers don’t receive regular fixed salaries and instead get paid for the ‘gig’ they do, such as for each car ride given or each meal delivered. However, what needs to be scrutinised is if this claim of increased freedom, independence, and flexibility is underlined by widespread insecurity and precarity.


Gig economy employment


Gig Economy, also known as the ‘sharing economy’ sometimes, refers to a form of workforce management, where a ‘gig worker’ is employed on a temporary basis or as a freelancer, carrying out short term contracts or jobs. In this form of employment, tasks are broken down into simple components and allocated to maximise efficiency. So, the term ‘gig worker’ includes a wide range of worker status, such as freelancers, temporary workers, and contract workers. Some use gig economy, jobs as supplemental income, whereas for some others, it is their primary source of income.


No matter how people utilise the wages earned from their gig economy, jobs, the fact remains that companies don’t consider the gig workers as ‘employees’ but as ‘independent contractors’. At the outset, it may sound empowering to some as people have more freedom in terms of the work schedule, amount and type of work they undertake, etc., but it could become exploitative for people who rely on this form of employment as their primary source of subsistence. For a large percentage of the latter group, they cannot afford instability and unfair remuneration. As a result, several gig economy platforms have been embroiled in a number of regulatory and politico-legal battles disputing the status of the gig workers throughout the world. In the case of Aslam v UberV and others, a famous legal case supporting the discourse around employment rights, the employment tribunal noted that the model developed by Uber to support this ‘self employed’ status does not actually represent the true working arrangement.


What makes their work precarious?


There has been a substantial amount of academic literature on precarity but a common thread connecting them can be understand from Katheleen Millar’s work on ‘Towards a critical politics of precarity’ where she explains how precarity can be explained as three distinct meanings - as a labor condition, a class category, and an ontological experience. It can mainly be understood as a job which is uncertain, unpredictable, filled with risks and marred by job insecurity, absence of permanent employment, a lack of social benefits, and low wages.


Gig economy, jobs fulfill most of these criteria in a number of ways. For the most part, it is the gig worker who has to take all the risks, such as using their own money to borrow or buy the car, getting it insured, maintaining the vehicle, etc. Due to the absence of employee status by the company, drivers, deliverers and other gig workers don’t enjoy the same employment rights and protections as in traditional forms of employment. These include basic entitlements such as minimum wage, unemployment benefits, paid sick leaves, maternity benefits, retirement package or pensions and other compensations. Furthermore, it can be argued that gig economy platforms, such as Uber and Lyft, essentially piggyback on other companies where the gig economy workers are employed as these companies offer them several of these benefits. This absolves the gig economy, companies of any liability of the workers and frees them of any responsibility of providing entitlements to them. Alex Rosenblat, author of ‘Uberland: How Algorithms Are Rewriting the Rules of Work’, says that this also allows the companies to sidestep tax obligations and evade transportation and employment laws. Due to their insistence on referring to the gig workers as independent contractors and not employees also make the companies unaccountable to state legislatures governing employment laws and regulations.


In case the worker believes that he/she has been treated unfairly by the company or some other disputes arise, they cannot resort to any employment tribunals. This puts the gig worker in a weak bargaining position against powerful multinational corporations. This power asymmetry can be further explained by the fact that gig economy workers seldom have any trade unions or collective action groups to represent their interests in legal cases.


Not just the employment status, gig economy platforms also collect enormous amounts of data on their workers, which is used by the algorithms created by them to make decisions. These decisions range from allotment of work to calculating wages to even termination of employment. What makes the situation precarious is that the gig workers have access to none of these data collected on them to know how managerial decisions are made. This is due to the fact that this system of data collection, analysis or interpretation by the machines and artificial intelligence is very opaque and employers are not obligated to share this data with the workers.


Why is this concerning and what can be done?


The gig economy is expanding at exponential rates throughout the world, especially in countries like India and China. During the pandemic, with offices and schools shutting their physical doors, many have turned to gig economy jobs. The global health crisis in particular has highlighted the need for rights, benefits and protections that need to be offered by companies to their employees. There is indeed a need to adapt to the evolving ideas of employment to suit this digital age. However, it is important to ensure that the gig economy does not reinvent and reinforce old forms of exploitation but rather challenges them. It has to be warranted that the vulnerable don’t end up in weaker positions at the expense of powerful multinational organisations who have information, power, financial and other resources at their disposal.

Rideshare companies Uber and Lyft during a car caravan protest/AFP VIA GETTY IMAGES


As a result of legal proceedings faced by gig economy platforms in many regions of the world, some of them have been forced to extend the employment status to workers by which the workers can enjoy several rights accorded to them through the laws and regulations of the state the platforms function in. Successful cases include the Californian case where a judge has ordered Uber and Lyft to treat drivers as employees and in Geneva canton where UberEats is obligated to consider the couriers as employees, with it being extended to other cantons of Switzerland. These examples have set a precedent for other states to follow suit and ensure that workers are treated fairly. It also goes on to prove how with strong political will and determination, unfair and exploitative business practices by private corporations can be controlled and be forced to refashion their business models to be more sustainable and equitable.

Manoswini Sarkar is currently pursuing her masters in Development Studies at The Graduate Institute of International and Development Studies, Geneva. She has a Masters in Political Science and International Relations from Jadavpur University, Kolkata. She is also an SYLFF research fellow at the Tokyo Foundation for Policy Research. She has extensive experience in non-profit work with several organizations in different capacities. Manoswini advises on various projects at CRRSS.