Reshaping Work: 5 insights into the gig economy‘s most urgent issues

The early gig economy discussion has majorly been focussing on commodity skilled labor like taxi driving, household cleaning, and click working, but recently there is shift towards a more encompassing approach. A beneficial trend, as I’m convinced that platforms will soon be organizing work in all kinds of industries.

ING published a paper titled ‘Algorithms versus the temporary employment sector Is there a future for temporary employment agencies?’. Their prediction is that about 20-70 percent flex work market share is to be redistributed by the rise of online platforms. In this context it isn’t surprising at all to see a growing number of stakeholders joining the discussion.

October 25th and 26th, 2018, the second edition of the ‘Reshaping Work in the Platform Economy’ congress took place in Amsterdam. Although many congresses on this topic focus on one specific stakeholder only (e.g. academics, start-ups, unions, or the deployment agencies), this congress exhibits a unique multi-disciplinary approach. An approach worth copying.

This blog is devoted to the tweets I put out during the congress, highlighting and elaborating on the congress’ most remarkable insights into the gig economy’s most urgent issues.

1. What is the size of the gig economy?

Depending on definition and the duration of a gig, researchers find sizes for the gig economy from 0.4% up to 22% of the total labor market. You see: there isn’t any meaningful statement to be made. Does that matter? It actually doesn’t, as long as each and every research clearly states which variables are and which are not accounted for in the used definition for the gig economy, something apparently difficult in practice. It wouldn’t be a superfluous luxury to see a bit more unity established among researches.

One of the most important, yet still underemphasized, variables is whether a transaction is processed by an online or offline platform. When talking about the challenges and opportunities arising from a online platform processed transactions, it would by definition be perfect to include those transactions only. But when the size of the full gig economy is to be considered, and something is to be said about working conditions, it would surely be beneficial to have an accurate measure of the size of the entire gig market. No valid statement can be made about cleaners working through helpling in comparison to other unknown cleaners working through other intermediators (working without a platform or even by classifieds, etc.). A second example can be found in the food delivery sector. TakeAway.com has its own hired deliverers, for whom it has orchestrated all social securities and insurances, but they deliver only 1.4 percent of the total number of deliveries executed by the platform. The other 98.6 percent is being carried out by couriers hired by the restaurants themselves. Until we start gathering knowledge about the working conditions of this group, we can’t say anything useful concerning the market as a whole and whether a platform is a blessing or a curse compared to the status quo.

Another outstanding point of the opening keynote by my colleague Koen Frenken is the fact that many gig workers use these gigs as ‘supplemental income’. Lauren Sepoetro, public policy advisor at Uber, confirmed this later on in the congress. UberEats isn’t meant to be the main source of income. Which is virtually impossible, given the fact that work hours are generally around lunch and dinner times. It still is a plus to hear such facts confirmed by a leading platform.

2. Platforms, the new generation deployment agencies?

The ING paper ‘Algorithms versus the temporary employment sector Is there a future for temporary employment agencies?’ predicts, as stated before, that about 20-70 percent flex work market share is to be redistributed by the rising online platforms. Shocking figures. Existing deployment agencies surely aren’t passive, yet the message is clear: Their work is cut out for them.

Last week, I shared a blog on the Danish platform Meploy organizing both their own and the external flexible shell of organizations through one platform. And also the employment agency industry has published quite a few statements and editorials about their role within the platform and freelance discussion.

During the presentation of Oxford Internet Institute researchers, working on a fabulous research on online work within the gig economy, the presentation slide below was shown. Platform Sourcing (check their report ‘Platform Sourcing: How Fortune 500 Firms Are Adopting Online Freelancing Platforms’) is a term I had not yet come across, but it sounds good. The more I think about it, the more I talk about it with others, and the more I start to be convinced that the link between platforms within the gig economy and the employment agency industry is merely logical. I think that the answers to questions on social securities for platform workers could be found in this direction.

I assume all of us are convinced that the full labor system needs to be redefined. Matthew Taylor, Chief Executive of the UK based RSA (check this club!), shared his vision that no fiscal differences should exist for clients and workers between fixed and flexible forms of work. However, it is clear for such a shift to happen, we will have to wait a couple of years. And, for the time being, we will have to find our solutions…

3. Are official degrees still valid in the gig economy?

Platforms lower the threshold to enter the labor market. The majority of the gig platforms are open for use to anyone without any prior experience. No degree required. During your first gigs on the platform you’ll establish your reputation score, which will help you in receiving your next assignments.

The question at hand is: are degrees still valid in the online gig economy? The answer by colleague Andrea Herrmann of Utrecht University is clear: “No”, as she concludes after extensive research on data from one of the world’s biggest gig platforms. Moreover, the number of years of experience on a platform and the reputation score are important, the latter to no surprise. Gender, on the other hand, is sadly also of importance; men do earn more than women for the same kind of work in the online gig economy like elsewhere.

It is, on the other hand, interesting to experiment with these things. Swedish social services experimented in drawing up traditional resumes from the experiences and reputation scores of gig platforms CV. A very interesting experiment.

4. How satisfied are workers in the gig economy?

Juliet Schor, Professor Sociology at Boston College, has been researching the platform economy with her team over the last year. I met (and interviewed) her in Utrecht before, about three years ago during the first International Workshop on the Sharing Economy. Juliet shared her keynote results from the research on satisfaction, autonomy and income of workers in the (offline) gig economy.

Interestingly, those who use the platform for supplemental income, without developing a dependence, are usually very satisfied and have a great sense of autonomy and earn a decent amount. Why? Because they profit from their position to only choose the well-paid gigs and don’t fear getting lesser scores; even deactivation of their account would not have a much of an impact on their lives. They are skillfully ignoring the control mechanisms of the algorithms. Likewise, a deliverer working for Postmates who lets the client come to her car to collect the delivery. She finds it too dangerous to go up to the door herself at such a time of the day. She doesn’t mind ignoring the rules of the platform, because she isn’t dependent on the platform for her income.

The situation for those that are dependent on the platform. They have to take every available job and will choose for the lower paid gigs as well. Additionally, this group suffers from the fear of the negative consequences of a bad review and how it influences their feeling of working autonomously.

5. The gig economy from a worker’s perspective

Special to the Reshaping Work congress is the fact that all stakeholders are present and involved in the development, host round tables –of course I joined the table with the Dutch Trade Union FNV after writing my last week’s blog about them– and on the second day I shared the stage for the debate called ‘meet the gig worker’. (Watch last year’s video).

In this edition, representatives of Deliveroo and UberEats shared the stage with 6 of their ‘own’ gig workers. Some of the findings:

Scheduled or really on demand?

Deliveroo works with scheduled services. Three variables can give the deliverer an advantage in his application for a gig:

  1. Does the deliverer act on the agreements and did he work for earlier reserved sessions;
  2. Last minute cancellations (if anyone cancels a session more than 24 hours in advance it does not effect their score);
  3. Does the deliverer work during peak hours (Friday, Saturday, and on Sunday between 6 p.m. and 8 p.m.).

Of course you can sign up spontaneously, but when the maximum number of deliverers within a region is reached, newly logged in workers won’t be scheduled. UberEats doesn’t work with scheduled services and is purely on demand. You may expect the Deliveroo model to lead to better income for the couriers; because the supply is regulated, it will never be possible to have too many couriers working simultaneously in comparison with the number of assignments. At UberEats there is less grip on the supply side of the platform. It would be interesting to research which of these models shows to be most profitable to the deliverer.

To be or not to be a freelancer, that’s the question.

The foremost discussion of the moment and the years to come is on whether the platform worker will be a considered a freelancer or is to be hired by the platform? The Attorneys I spoke to about the Dutch context predict this issue to remain unclear for the coming years.

Although there is much talk about the worker, there is but little place for them to express themselves. Inviting them to speak up, may lead to interesting results. Their response on the question if they prefer to be a freelancer or to be hired, their unanimous answer is: “Freelancer.” Especially interesting as the very same workers asked for more clarity on income and tariffs earlier in the conversation. Their motives:

  • The results of your efforts show forth immediately. Cycling faster, earns more. The competitive element is experienced positively;
  • The flexibility: work when as long as you want;
  • Autonomy: be your own boss, make your own choices.

Although the choice is clear, it remains questionable if the individual deliverers are able to understand the risks concerning insurances, work disability and pension first of all, and secondly, if we would ultimately like to pay the price for the uninsured worker as a society. A number of platform representatives I talked to during the congress were open to compulsory insurances for workers. As long as it would not be considered as them becoming the employer. Bottom line, the choice is between flexibility and security. Which is no desirable case.

What is the bottleneck?

Right in the middle of this discussion, a to me unexpected and rather underexposed  stakeholder with an enormous influence on the bicycle deliverer’s fortune showed up: the restaurant. Platforms like Deliveroo and UberEats give restaurants not yet active in food delivering the opportunity to tap into their network of couriers on the platform. However, this does not prepare their processes to having their food delivered. A few points of consideration:

  • • Long waiting times: commonly other clients take precedence over the bicycle deliverers and their waiting is at their own expense;
  • • Restaurants aren’t yet accustomed to packing meals for transport. The result: flooded, mixed, neither very attractive nor tasty meals in lousy paper bags. Something the couriers will be judged on in their evaluations on the platform.

Deliveroo indicates to help restaurants with advice, but there is still much to improve for both platforms. I’m, however, interested whether these negative experiences also hold for restaurants with their own hired deliverers. I assume not to the same extent as a result of an increased feeling of ownership.

Wrapping up

Over six years ago, I decided to start working on the platform economy full time. All based on the conviction this development would be influencing every industry over a span of the next decade. First crowdfunding, secondly the sharing economy and consecutively the gig economy. I also predicted, reasoning by pure logic, the last of these to be the most interesting and to offer the most relevant issues. For, surely, the heavier someone depends on a platform, the clearer the pain of a suboptimal model.

It was wonderful to see so many different stakeholders become visible on a personal level during the debates and to noticed how they opened up for each other’s opinions and challenges. This way of communication is much more pleasant than the one in court cases. The stakeholders’ next step is to take a more constructive attitude towards the outside world on an institutional level, as that is the road to success for all who are involved.

I recognize myself taking on the task of bridging gaps by bringing several parties within stakeholder groups together and by connecting stakeholders with one another. I am excited to do so from an independent position and honored to play this part.

This post is also available in: Dutch

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