• The Business Owner

The Gig Economy

The gig economy has been defined as the labour market in which the employed participate in freelance or short-term contract work over a permanent position. Many of these positions are carried out by millennials and gen Z over online platforms such as Uber and Deliveroo where an individual will get paid per unit of work completed compared to an hourly or daily rate of many other workplaces.

A large portion of labour-based work (filled mostly by younger generations) has become more complicated by the Coronavirus this year, with the retail sector being closed completely for a number of months and the reduction of any hospitality during the hight of reported cases. This has impacted the economy for everyone but particularly the livelihood of those in these industries.

So, how have labour workers had to overcome this hurdle the past year? Well, it has caused the increase of freelance and online work. The gig economy has therefore benefitted greatly from this and companies including PeoplePerHour, Uber and Amazon have all seen a rise in freelancing work in the recent months.

The rise of the gig economy has come with many benefits and issues brought to surface by both workers and companies. It has been recognised that those working on this basis have less protection and fair pay compared to fixed contract workers. As there is typically a lack of benefits such as sick and holiday pay, reports are beginning to suggest that these individuals may be making even less than minimum wage – an obvious issue for employees. This is currently being reviewed by the Department for Business and they aim to ensure that their policies are up to date with all methods of employment.

There are, of course, many benefits of this industry too. Employees are much freer in their working hours and are able to vary them as often as needed. Companies have also seen an economic benefit residing in their ability to only pay workers for precise workloads, meaning that they can be saving money on slower days. This work category can be used as an opportunity for employees who are also working as a permanent employee to gain experience in other sectors, should they wish, or for anyone to earn extra money with low commitment.

With a severe reduction of retail and hospitality work this year, the presence of a gig economy has been important as a method of earning extra money for people who may have lost their jobs due to the pandemic. Many have seen struggle through having to do this as they have lost the stability of a permanent employer. There are still an estimated 1.5 million people registered on these freelance sites in the UK meaning competition may become an issue for those looking for this type of work. As the sector grows, there will likely be a much higher ratio of workers to work needed.

Having such a new method of employment has attracted a lot of interest and consequently resulted in easier and quicker demand for work in larger companies. It has allowed for employees to be able to range in skill set, availability and location and still gain freelance work – making it highly convenient and accessible to most people.