California dealt a big blow to ride hailing companies, such as Uber and Lyft, with its recent decision to invalidate Proposition 22, a 2020 ballot proposal, that allowed these companies to classify their workers as independent contractors.
To cut a long story short, these companies wanted to continue treating the riders on their app as independent contractors so they don’t have to pay for their sick leave, medical insurance and other employee benefits. They lobbied hard to put it on the ballot paper during the 2020 elections and 58% of Californians voted in favour. Now a judge has said that this is unconstitutional because it stops the government from regulating compensation for workers’ injuries.
The decision could be appealed and the case could end up in the US Supreme Court but that does not take away from the issue at stake here: the rights of gig workers.
This week in The Global Tiller, we take a look at what the gig economy landscape looks like, how this practice, or malpractice, transcends geographical and cultural borders, and what are some upcoming challenges to this way of doing business.
While the idea of taking on multiple jobs and offering your services to whoever demands is not a new phenomenon, it did take off significantly in the aftermath of the 2008 financial crisis as companies were cutting back on labour costs.
Of course, the growth of the internet accelerated this trend to the point that here we are: 65% of hiring managers across the globe say the gig economy is rapidly becoming the new norm for how businesses organise workflow, with 43% of global organisations who engage these part-time workers saying they save at least 20% in labour costs. In the Asia-Pacific region alone, 84% of hiring managers outsource to gig workers.
We see these numbers in action all around us: when we take an Uber to visit a friend, use Foodpanda to order takeout, and get groceries delivered right at our doorstep. During my recent trip to Karachi, I met a couple, both of whom were gig workers. She offers salon services at the door while he is a "captain" for the local ride-hailing app, Careem.
On the face of it, it seems to be a sweet deal for the young couple who would probably struggle to find full-time employment with the same flexibility. But there are major structural issues with this kind of work. She can work up to 20 hours a day around holidays and still has to take on her own personal clients to make enough money, while he roams around idly all day when the city locks down due to Covid-19.
I’m sure the managers of this ride-hailing app received their full salaries during the lockdown but their drivers - on whom rests the entire business model - have nothing to fall back onto. In fact, an Indian food-delivery company, Zomato, put up a request for funds from their customers to help the delivery workers with food and income support. When asked why the company does not help its workers, the co-founder said 'it’s beyond our financial viablity'.
This fight to recognise gig workers as employees is being fought successfully, to some extent, in Europe where they have moved beyond employment status, towards regulating the algorithms that govern these workers. Recently, Italy fined a food-delivery outfit €2.6 million for the way its tech discriminated against workers. In fact, there are growing concerns that some of these algorithms are designed to make sure a worker’s earning does not cross a certain threshold even if they put in twice the number of hours.
Is gig economy the future of work as we know it? There is no doubt that it offers employment (in places where there are, otherwise, no options), flexibility and a chance to diversify our sources of income. But how can we make sure that our convenience of having salon services at home does not come at the cost of the wellbeing of these workers? If there is one lesson that this pandemic has taught us, it is that health care is a fundamental need for every human being. How can we restructure our economy so that it provides for this fundamental need without breaking the backs of those who work in it?
Until next week, take care and stay safe!
Hira - Editor - The Global Tiller
If you’d like to read our previous issues, you can access our archives here.
‘What’s Going on’ Certificate Series
The Global Tiller team is excited to be a part of the East-West Center Leadership Program’s 'What's Going On?' Certificate Series!
'What’s Going On?' is a five-week course designed to enhance your understanding of core regional (Asia-Pacific) issues and global trends, and how they impact your area of interest. Each week, we will take a deep dive into specific themes and some signals of change in those areas. We will also use the Covid-19 pandemic and the climate emergency as a lens to understand them.
This certificate is open to the public.
…and now what?
The gig economy provides quite a lot of comfort and convenience. Lying on the couch and wishing for a pizza? It’s now just a click away. Need a ride but too lazy to drive? Someone will do it for you. Us, humans, have managed to find ways to avoid making too much effort. We invented agriculture to stop foraging around. We invented the printing press to avoid having to memorise (or lose) too much knowledge. We invented machines to work on our behalf.
And all this was supposed to lead to greater happiness, as it was sold as at every new technological revolution. But has it really? The question is worth asking and I’ve asked this question in the past issues as well: where is the less work and more leisure that we were promised in the 21st century?
The reality of this century is people tirelessly trying to make ends meet, doing several jobs at the same time. Since many of those jobs are gig economy jobs, they are sacrificing their health, their kid’s education, and more, just to make a living.
Indeed, the gig economy has created jobs for people who have no other opportunities. But it’s no different than the kind of jobs we still see here in Tahiti: people manning service stations to fill up your fuel tank. Sure, it creates a job for some people, but what kind of jobs? Shouldn’t all the progress we have made allowed us to create better jobs? Not everyone can be a lawyer (or wish to be one, trust me on this) or an engineer but have we given everyone an equal opportunity to make that choice?
There’s another element to this question of how gig economy fails to empower or provide opportunities for self-growth as jobs should do. It relates to another basic human need: our need for belonging.
As human beings, we are social animals. We need to be part of a group, a community. We need to belong. Isn’t it why we created sports teams? Nations? And ugly uniforms in organisations? We always thrive to be a part of something. All the way to being willing to spread misinformation just for the ultimate feeling of being a part of something - no matter if it’s real or bonkers.
But how do we create this sense of belonging when there’s nothing to belong to? How do we make gig workers feel like they belong when they’re not part of the team? When despite running the business for you, you leave them out of the organisation?
The gig economy, despite all its benefits raises a deeper question: how can we make sure that people feel good with work even if it does not provide for their basic needs. How can we create a resilient organisation, if there’s no sense of community within it?
In light of the Covid-19 pandemic, many managers are wondering how to maintain work, collaboration and efficiency in remote work. For myself, I’m wondering why no one is trying to see how this is already a problem in the gig economy.
If we dig deeper in this rabbit hole, there’s an even deeper question: as the number of people who are left on their own to make a living grows, how can we maintain the sense of collective at a wider scale. How can we promote solidarity and belonging in our societies when we can’t accept providing everyone with the same status?
I wonder if the gig economy will not eventually create a “gig” social contract when everyone will just come and go, and won’t feel obliged to a broader collective and a sense of belonging. This may already be unfolding as we watch our communities become so divided.
The gig economy is convenient, yes, but let’s try not to have it at the expense of what’s really important for us.
Philippe - Founder - Pacific Ventury