The growth of the gig economy | A blog by Business Butler

The growth of the gig economy

The number of people working in the gig economy in England and Wales has almost trebled in five years according to research published by the Trade Union Congress (TUC). The TUC estimates there are 4.4 million gig-workers, which equates to 14.7% of the working age population, this is a significant increase from 5.8% in 2016.

What is the gig economy?

There is no single, agreed definition for the gig economy. This version was created by the Department for Business, Energy & Industrial Strategy (BEIS) and the Institute for Employment Studies.

“The gig economy involves the exchange of labour for money between individuals or companies via digital platforms that actively facilitate matching between providers and customers, on a short-term and payment by task basis.”

Just Eat and Deliveroo are two digital platforms that have enjoyed the greatest growth during the past five years. In 2016 just 1.9% of the workforce held gig roles in delivery or driving platforms, whereas now the total is 8.9%. The figure has doubled for people working for gig companies in digital, remote online tasks and household services.

While the vast majority of business sectors suffered significantly during the coronavirus pandemic, the gig economy enjoyed a boost. The enforced lockdowns meant large swathes of the population turned to online shopping and food deliveries. Other companies to reap the rewards from an increase in demand include Amazon; City Sprint, a same day courier service; and hospitality staffing app, Stint.

Poor working conditions

The report about analysing the impact of the gig economy was produced jointly with the University of Hertfordshire and contained contributions from academics, trade unionists and labour activists.

With the phenomenal rise in the number of workers joining the gig economy comes a warning from the TUC that there could be an increase in more workers suffering from poor working conditions and low pay.

Gig workers are often taken advantage of by their bosses and are falsely categorised as independent self-employed contractors, which means they are not entitled to the rights enjoyed by employees.

Findings from the report highlight these labour rights issues facing people working for businesses in the gig economy and revealed:

'Common to virtually all platforms is an effort by operators to deny those who work through them an employment relationship and avoid obligations, such as the payment of minimum wages and trade union rights.

'This presents workers with unpredictable scheduling, inconsistent earnings, and unreliable long-term employment prospects.'

Banning zero-hour contracts

The TUC proposes several measures including, redefining the definition of a ‘worker’ in order to qualify for a full range of labour rights, introduce a legal right of access for unions to workplaces, and a ban on zero-hour contracts.

The General Secretary of the TUC, Frances O’Grady had some strong words regarding the issue and said:

'Everyone deserves to be treated fairly at work, but millions of working people are having to rely on casual and insecure gig economy work to make ends meet, often on top of other jobs.

'Gig economy platforms are using new technologies to carry out the age-old practice of worker exploitation. Too often, gig workers are denied their rights and are treated like disposable labour.

'Ministers must stop letting gig economy platforms off the hook. That means giving all gig workers trade union access, banning zero-hours contracts and boosting workers' rights across the board.'

Professor Neil Spencer of the University of Hertfordshire added: 'Our research shows that the gig economy is a substantial part of the UK's workforce, and I expect it to continue to grow. Gig work can offer flexibility, but many workers also experience lower pay and poor working conditions.

'Those classified as self-employed also have less rights than employees. It is vital that pay and conditions for gig workers are improved to protect those who rely on this work as a source of income.'

Platform work

Findings from the study also reveal an escalation in the number of people taking on driving roles, the majority of those are courier work but also include odd job services and errands. Almost one quarter of all workers have turned to platform work at some stage compared to one in 10 in 2016.

The term ‘platform work’ is not restricted to driving jobs. It includes a broad range of gig economy jobs that are found through an app or website and accessed by using a smartphone, tablet, laptop or other digital device.

The study found that the majority of workers using platform work were doing so to supplement other jobs. The need to juggle more than one job means workers have to endure long working days and the added pressures caused by that.

 Legal action

There's been a lot of negative publicity aimed at online platforms such as Uber and Deliveroo and legal action has been taken regarding the employment status of their staff. Earlier this year the UK Supreme Court ruled that Uber drivers had the right to be classified as ‘workers’ and were entitled to a minimum wage and other worker benefits. The consequences of this ruling are far-reaching and there will be more gig economy companies taken to court in the future.

The annual contribution by gig-based freelance workers to the UK economy is approximately £20 billion and with more people turning to platform work, either by choice or through necessity, the importance of this sector is set to become even more significant.

Business Butler is an on-demand talent platform that connects users with a panel of vetted business experts who specialise in a range of disciplines including marketing, law, finance and human resources. To find your ideal expert please click here.