The Case Against the Gig Economy

What the gig economy is

The gig economy encompasses work arranged through digital platforms on a task-by-task basis: ride-hailing (Uber, Bolt), food delivery (Deliveroo, Just Eat, Uber Eats), task marketplaces (TaskRabbit), and freelance platforms (Upwork, Fiverr). The model is predicated on classifying workers as independent contractors rather than employees, avoiding the costs of employment: minimum wage, sick pay, holiday pay, employer National Insurance, pension contributions.

The Uber case

The UK Supreme Court's unanimous 2021 ruling that Uber drivers are "workers" (a category in UK law between employee and independent contractor, entitled to minimum wage and holiday pay but not full employment rights) was a landmark. Uber subsequently adjusted its model in the UK. However, many platform companies continue to classify workers as contractors, and enforcement of worker classification is patchy.

The workers' experience

Research on gig worker experience presents a mixed picture. A minority of gig workers — those with marketable skills, high hourly rates and genuine choice over when they work — report valuing the flexibility. A larger proportion, particularly those in lower-paid delivery and care work, report precarity, income volatility, and the reality that they have little genuine flexibility (they must work long hours to generate adequate income). The correlation between gig work and low income is consistently found.

What better regulation looks like

Several proposals have been advanced: presumption of worker status (with the burden on the platform to prove contractor status rather than the worker to prove employment); portable benefits (which accrue to the worker rather than attaching to a specific employment relationship); algorithmic transparency (requiring platforms to disclose how pay rates and job allocation decisions are made); and collective bargaining rights for platform workers. Spain, France and several US states have enacted versions of these.