Newsletter

Newsletter December 2019

The gig economy and new forms of employment

By Luisa Carrasco

The term gig belongs to the world of the performing arts. This is what the Anglo-Saxons call a gig, a
musical performance. Making a generalization of this idea and applying it to other sectors we could
talk about a service that is provided in a limited period of time. In this sense, it could be translated as
the " economy of orders" or " of small tasks". It was born more than a decade ago in the United  States.


The economy of services on demand


It is also what is called, somewhat confusingly, collaborative economics. What was initially conceived
as a system of democratization of services through online platforms that brought together users who
offered a service or users who demanded it, of collaboration between equals, which excluded
intermediaries is generating undesirable consequences, especially of a labor nature, since there is
still no formula that can guarantee respect for the labor rights of the people who provide these
services.
On the other hand, there are points in favor. This model allows for extra income to supplement
an insufficient salary and is chosen by an increasing number of people because of the flexibility it
allows and as a temporary solution while a more formal or stable job opportunity arises.

What is the weight of the gig economy?

A study carried out by the foundation of one of the most important American banks, JP Morgan
Chase &Co. Institute, wanted to analyze the importance that this type of economy has acquired in the income of millions of Americans.
By studying the behavior of the 39 million accounts of their clients in relation to the income
received from one of the 128 online platforms of the gig economy, they wanted to find out the
impact that this new economy is having on the income of the Americans. Something that could be
extrapolated to a greater or lesser extent, sooner or later to a European context.

Driving platforms increase their revenue


The study classifies the type of services provided through online platforms into four: transport, sale
of products on the online market, rental of rooms or houses or garages and those services that are
not related to the transport of people or goods, thus referring to services such as walking the dog,
making repairs to household appliances or telemedicine, provided by platforms such as Uber, Lyft,
Wag, Airbnb, eBay or Etsy. The impact is studied during the period from March 2013 to March 2018.

The conclusions reached in the report are mainly:

Online platforms that bring drivers into contact with users are gaining in number and volume of
revenue. There are more people earning money and therefore more money. In March 2013 the
revenues of the gig economy accounted for 0.3% of the total amounts received. In the first quarter of
2018 they have reached 1.6%. At some point in the previous year, 4.5 families participated in the
"order economy".


The people who participate by offering their services are active on the platform only three months or
less per year at best as is the case with transport.
The number of drivers has increased which has resulted in a 53% decrease in profits.
The profits obtained on the platforms are the highest income that families have received in the
months in which they have participated. However, they only account for 20% of the total income in
the previous year.
Unemployed are more likely to use these driver platforms as a source of income than employed
women.

Another type of analysis, such as that carried out by the ILO in a study, reveals that the average hour
of a worker on a gig economy platform is paid at $4.43, somewhat less if one takes into account the
processing time it takes to search for clients on the platform and the requirements. Then it comes
out at $3.31/hour. The issues raised by this type of economy challenge the limits of work and/or
labor rights. You must move towards regulation that guarantees the rights of all parties.

Source: http://blog.infoempleo.com/a/la-gig-economy-y-las-nuevas-formas-de-empleo/

 

Photos were taken from the site https://ahlajob.com/?p=12

Worker participation in GIG economyWorker participation in GIG economy

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