What Do We Know About the Gig Economy?

Digital Transformation

What Do We Know About the Gig Economy?

Commentary
Posted on: 13th April 2022
Kirsty Innes
Director, Digital Government Unit

Mention the phrase “gig economy” and what springs to mind? Many of us might think of a driver with a ride-sharing platform like Uber, Bolt or Grab; for others, the image is of a rider on a bike or scooter delivering take-away food for GrubHub or Deliveroo. Both are now familiar sights in cities around the world; and news stories about the risks and dangers are commonplace. However, digital labour platforms (DLPs) are used by millions of people to find work in myriad sectors, at a wide range of skill and pay levels.

Developing a clear idea of who uses these platforms, how and where, is a crucial first step towards understanding the implications for individual workers and for labour markets. As part of our research project into the gig economy, Oliver Large and PeiChin Tay reviewed as much of the most relevant recent research as possible to try establish as a full a picture as possible. Here are some of the key findings:

  • DLPs operate in almost every country in the world. They are growing rapidly in terms of both number and scale: there are now estimated to be around 800 DLPs worldwide; and a study found that the total value of transactions conducted via DLPs was $142 billion in 2018, increasing to $312 billion by 2023. 
  • Work done via DLPs generally belongs to two main categories: web-based tasks and location-based tasks. Web-based platforms are used to commission work that is done online, from anywhere in the world, such as data entry or identifying images to help train AIs at the low-paid end, through to graphic design, translation or software engineering towards the higher end of the income scale. Location-based platforms use an online service to connect workers with tasks that need to be performed in person in a specific geographic area (like on-demand ride-sharing services, or babysitting).
  • According to the ILO, the typical DLP worker is under 35, male and lives in urban or suburban areas. Over 60% of workers on online web-based platforms and 20% on location-based platforms are highly educated. 
  • The experiences of people that use DLPs to find work vary greatly between platforms and between countries. The growing number of users points to the fact that many people find DLPs a convenient way to earn money; and are often able to earn more via a platform than they would through traditional forms of employment.  Some studies cast further light on the benefits that users derive from DLPs, such as flexibility.
  • However, others find that many DLPs do not offer “good” work, with users exposed to low, unpredictable and unstable earnings; a lack of accompanying benefits (pensions, sick pay, holiday and parental pay); poor working conditions and in some cases, disadvantages resulting from algorithmic decision-making.
  • Like many of the most disruptive and exciting features of the digital economy, DLPs offer huge opportunities. By connecting individuals with tasks in real time, they allow consumers to conveniently find an endless array of products and services, and offer companies an efficient, scalable supply of labour. This helps people who would otherwise be excluded from the labour market to access work opportunities, and opens up business models that were previously unfeasible. (For instance, comparatively few restaurants can afford to employ their own full-time delivery driver, whereas many more are able to supply their products to customers at home via a service like JustEat, DoorDash or UberEats.)
  • Yet in by-passing traditional (and often less efficient) models, they also confound the delicate structures we have set up to calibrate the balance of power between businesses and employees and make sure workers’ needs are met alongside those of consumers. People who find work via DLPs are often classified as self-employed or independent, and the policy debate so far has often responded specifically to this difficulty, sometimes by allocating workers to alternative intermediate legal categories.
  • There are also geopolitical impacts to consider. The revenue from DLPs disproportionately goes to the Global North (where many of the large DLPs have their headquarters), despite the fact that a significant proportion of work allocated via DLPs is done by workers physically located in parts of the Global South. For example, in 2020, India supplied around 33 per cent of online web-based labour, yet only around 3 per cent of the global revenue from DLPs was generated in India.

The findings indicate that online task-based work will continue to play a role in shaping the global internet-era labour market, and affect a growing number of workers’ lives. Despite the intense debate, there are many unanswered questions to examine about how to make the most of the opportunities offered by DLPs, and how to solve the challenges.

To answer these questions, we first need to know more about people’s experiences. Our user research project will connect with former, current and would-be digital labour platform users in four locations – Jakarta, London, Nairobi and Singapore – to find out in detail how DLPs have impacted them. We’ll continue to blog as the research progresses and will publish initial results over Summer 2022.

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