Gig economy

In a 2016 publication on the future of work, the European Commission defines the gig economy as an economy in which digital technologies enable teams to be assembled around a given project – and often across borders – while platforms seamlessly connect buyers with sellers. The Commission also notes that much of the latter takes place under the heading collaborative economy which offers opportunities not only to people seeking more flexibility in their work, but also to those who have often had fewer chances of obtaining a permanent job. Several national researchers (for example, Botsman, 2015; Frenken, 2016; Schmidt, 2017) apply a more limited definition of the gig economy, by referring only to tasks commissioned through online platforms but realised in a local/physical environment (such as ride hailing, delivery services or domestic services) rather than (also) online.

The Commission argues that the gig economy has created a dynamic environment in which temporary positions are common, and organisations contract with independent workers for short-term engagements. Tasks can be broken down and distributed even more widely through apps and online platforms.

The bidding-style process through which tasks are offered, assigned, and performed allows for real-time, interactive and an often mutual rating of the performance of service providers for seller and buyer, and the reliability of users. The gig economy can also offer ways to tap into talent, services and expertise at a global level with unprecedented affordability and transparency while rewarding the reputation, demand and compensation of the best performers.

There are, however, concerns about those working in the gig economy, in terms of their risk of job precariousness due to factors such as:

• unstable working hours and income;
• lack of coverage of employment rights;
• uncertainty around social security and pensions;
• lack of access to career development and training.

Trade unions have expressed concerns about the implications of the gig economy for workers. The European Trade Union Confederation (ETUC) has stated, in a press release issued in September 2016, that the gig economy needs to meet its responsibilities to workers and society by turning undeclared work into declared work, and that the European Commission needs to help online platforms to do so. Esther Lynch, ETUC Confederal Secretary, noted that

the gig economy sounds cool but in reality many of these jobs just offer a fast route back to the problems faced by piece workers and day labourers of 100 years ago […] online platforms have the effect, if not the explicit intent, of disguising the employment relationship along with facilitating avoidance of social security and tax obligations.

The ETUC called on the Commission to ensure that online platforms:

• do not deny the existence of the employment relationship;
• clarify that the place of work is where the worker carries out the work;
• make the relevant payments to the tax and social security authorities in the right Member State.

It also wanted the Commission to ensure that:

• workers are informed of their terms and conditions, including the name of the employer;
• practices such as charging workers a percentage of their wage, payments in kind, or making deductions from wages as punishments are outlawed;
• labour inspectorates have the right tools to investigate abuses of online workers;
• workers can enforce their rights across borders;
• workers can organise in a trade union and collectively bargain.

The Confederation of European Business (BusinessEurope),the European Centre of Employers and Enterprises providing Public Services and Services of general interest (CEEP) and the European Association of Craft, Small and Medium-sized Enterprises (UEAPME) in a joint response to the consultation on the Annual Growth Survey 2018, stated that employment regulations should provide the right framework for employers to create jobs (PDF) adding that

new forms of work are more and more a reality in the context of digitalisation. Employers need to adapt to constantly changing economic circumstances. This should go hand in hand with providing appropriate levels of protection to workers and encouraging their mobility on the labour markets.

The response also stated that Europe needs to ensure that active labour market policies (ALMPs) are designed to support mobility between sectors and the retraining of workers, which will become increasingly essential as labour markets adapt to the digital transformation of the economy.

The European Commission’s 2016 research concludes by stating that work is no longer a static concept but an umbrella term for roles performed in a different manner and under different legal arrangements. It argues that public policy needs to adapt to this new situation and benefit from the agility that comes with it while mitigating the downsides: governments need to find more innovative ways to offer lifelong and personalised support for employment, skills and welfare, adapted to the needs of individuals.

Related dictionary terms

Crowd employment; digital economy; ICT-based mobile work; new forms of employment; platform work; work–life balance.