Booming Gig Economy: Pros and Cons | CORPORATE ETHOS

Booming Gig Economy: Pros and Cons

By: | November 6, 2017
Gig-Economy

The concept of business, as well as work, is changing all over the world. To start/own a business, the conventional wisdom suggests this scenario: to start a bookshop, you need to own books and a store to keep those books; to start a hotel, you need access to real estate; to start a media firm you need to invest on writers and other content creators. But the Net-driven economy is altering this conventional way of doing business.

The rise of app-based collaborative online platforms like Uber is writing a new story in the annals of business history. These businesses simply aggregate the service providers (suppliers/professionals/independent contractors) spread across different locations and algorithmically match the right resource with the right customer.

The app-based businesses own hardly anything relevant to the domain in which they operate. Nevertheless,  they practically have become prominent players in those sectors: Uber, which is considered to be the largest taxi company with worldwide operations, own no vehicle. Facebook has become a central hub for content creators and is increasingly becoming a major news source (http://www.journalism.org/2017/09/07/news-use-across-social-media-platforms-2017/). Facebook does not create content on its own, but it allows anyone out there to create content. So, this makes Facebook a big media owner without creating any content. The amazing story of Amazon becoming a major bookseller without owning books is familiar to all of us. One can point out a plethora of such examples.

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The emergence of different types  of online marketplaces that aggregate buyers and sellers of a specific service is having its impact on the concept of work also. Many of today’s work can be done online and this enables the companies to source talent globally. The advantage of this type of service is that it enables one to market her skills globally. Such services provide you independent one time tasks in exchange for a specific payment- of course, the remuneration depends on the complexity of the task and the skills required to accomplish it.

Amazon Mechanical Turk (https://www.mturk.com/mturk/welcome), an online marketplace for work, is a pioneer in this realm. The service lets job providers post their work at a specific price. In the Amazon Turk parlance, such work assignments are called HITs (Human Intelligence Tasks). So, any registered worker can look at the HIT listings, and select the HITs that suit her talents. The service hosts a range of tasks that include Audio/Video Transcription, Data cleaning, cataloguing data, content tagging, rate sentiment/tone of tweets/customer comments, etc.  Anyone can apply for worker registration, but the registration approval is not automatic.

Freelancer (https://www.freelancer.com/) is yet another service almost similar to Amazon MT. The job categories listed on the service include ‘Mobile Phones and Computing’, ‘Saled and Marketing’, ‘Translation and Languages’, ‘Business services’ and so on. People-per-hour (https://www.peopleperhour.com/), Upwork (https://www.upwork.com/), etc. are some other known players in this realm.

The core idea to be drawn from this trend is that a variety of jobs are available in bits and pieces. Each unit of work is self-contained and can be taken up by anyone (from anywhere) with the required skill/reputation. With the help of an app, these services simply match the task with the right talent/resource. If you possess multiple skills, you can switch to multiple types of jobs. This freelance on-demand economy is being called the ‘gig’ economy. The word gig used in this context has been hired from the music industry (https://www.macmillandictionary.com/buzzword/entries/gig-economy.html). Musicians without full-time jobs live from one performance to another. The performances they do are called gigs. In the emerging task-based economy, you take up a self-contained task (gig) at a time, receive one-off payment for it and look for another ‘gig’ from the same domain or from a totally different domain. Once done with the work, you are completely free. If your performance is good, your reputation and potential demand/remuneration will automatically go up- this is fully controlled by algorithms and there is little scope for any kind of favouritism/subjectivity. Performance and project-based way of working is the reason why this emerging global economy is called the gig economy.

The shift towards freelance on-demand economy is spreading like wildfire and is conquering many industries. According to this report (https://www.recode.net/2017/5/25/15690106/gig-on-demand-economy-workers-doubling-uber), by 2021 the number of on-demand jobs (in the US) “will surpass the current number of jobs in finance or construction”.

The new economy certainly offers a flexible life. But the benefits are skewed to the highly talented ones. For a good writer, artist or technocrat the gig economy presents an opportunity-ridden environment. But for an average person, this may not  be the case.  The environment is becoming very competitive and as the ‘gig’ economy is not controlled by conventional labour rules and regulations, a full-time freelancer’s job is not as rosy as one would imagine.

Being your own boss is good to hear, but not easy to implement. There is no fixed income,  no guarantee of what you will earn  the next day. Income volatility also means you may find making future plans difficult. The problem will further aggravate when you become old and unable to work- no pension, no retirement benefits and all that.

Of course, we cannot control the technology-driven social/cultural innovations/changes. These online freelance platforms offer huge benefits to consumers and must certainly be addressing certain shortcomings in the conventional way of doing business. In this regard, we can only hope that a new ecosystem to protect/support the interests of the different players in the gig economy might emerge.

 

The Uber Game

As mentioned earlier the ‘gig’ economy is not roses for everyone. To succeed in this highly competitive economy – you need to be always on toes. If you want to know what it is like to be a ‘gig’ worker, take a shot at the Uber Game, recently released from the Financial Times.  The game ‘Can you make it in the gig economy” (https://ig.ft.com/uber-game/), is ‘based on real reporting and interviews with several Uber drivers’. In the game, you simulate as being an Uber Driver, who has a family and $1000 mortgage payment coming up in a week. You can play the game either as someone with fewer difficulties (‘Easier’) or as an unlucky guy facing ‘Harder’ problems.

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While the game progresses, you will face different situations that are generally faced by Uber drivers. With each decision point, the choice you make determines your ultimate success in the game. If you make the right choices (and ultimately win), it is likely that you would turn out to a good Uber driver or at least it is an indication that you possess some of the skills required to survive in the gig economy. If you are a non-US person, you may find it difficult to relate to all the events shown in the game. Still, the game is worth a try as it will expose you to the struggles/difficulties faced by an Uber driver.

 

 

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