Gig economy as a new form of economic transformation

In today's age of information and communication technology, the rise of the 'gig economy' bears the testimony to the fact that the nature of work is changing. The term "gig" is  used to refer to a single performance by a musician or group of musicians. 'Gig work' refers to the increase in short-term/temporary contracts for contingent jobs rather than permanent or stable jobs that happen through, via and on digital platforms. The gig economy consists of work that is transacted via platforms but delivered locally through physical presence of workers, and work that is transacted and delivered remotely via platforms. Local gig work includes food delivery, transport and manual labour. Remote gig work consists of the remote provision of a wide variety of digital services, including data entry to software programming. The gig economy is a subsection of the overall economy that predominantly relies on 'on-demand' work. It is the higher granularity of work (where firms can buy work in ever smaller quantities) that lies at the heart of the gig economy (Bieber, & Mogga, 2021). Gig economy facilitates the path for economic transformation where workers find their full-time regular jobs unsustainable and instead gets temporary and part time jobs. Workers under this economy have flexibility of time at their job rather than the stifling nature of some traditional employment contracts. The gig workers do not have real bosses. They work for apps.

Clients and customers can reap the benefits of the flexibility gig environment offers: getting food delivered quickly, hiring a web developer and ordering a taxi on demand has never been easier. It is to be noted that the gig economy became the norm during the financial crises when people faced unemployment or under-employment problems and had to look for other sources of work. Gig economy has now ventured into two major segments: knowledge-based gigs and service-based gigs. Knowledge-based gigs, for example, include jobs performed by machine-leaning data scientists and independent management consultants. On the other hand, service-based gigs include trade people and delivery drivers. Thus, the gig economy through technology and software platforms is driving a sizable portion of the economy. This includes services such as Uber, Pathao, AirBnB etc. which have become a part of our everyday lifestyle.

FACTORS THAT POWERED THE GIG ECONOMY: A number of factors led to the rise of gig economy. The main reason for the rising popularity of the gig economy may be attributed to the emergence of ICT, and the flexibility that online based part-time, temporary jobs offer for both employers and workers. Higher quality and lower costs of information technology (IT) infrastructure, and the development of international finance and information flows have created an enabling environment for new jobs and forms of work globally. Digital technology has supported users to seek work, and enabled employers to overcome skills shortages and meet fluctuating labour demands promptly, e.g., through online recruitment websites (Green and Mamic, 2015). According to the OECD, rise of the gig economy is powered by digital platforms that facilitate temporary employment of an on-demand job. MNCs' practice of employing contract-based workers has also paved the way for gig culture. MNCs are gradually embracing contractual hiring of young talent for small ventures. They are doing flexi-hiring to curb operational expenses and manage time of huge recruitment procedure. The flexible working arrangements offered on ICT platforms is another factor contributing to the advent of gig economy.

Under the gig system of work, the owners of firms reduce their business risk by demanding greater flexibility of their workers. Generally, gig work results in a shift of risk from capital owners to workers. This reduction of business risk exposes workers to increased personal risk: risk moves away from an organisation to the individual. The gig economy signals further evolution of digitally-mediated human resource management and online purchase in the on-demand economy. This trend of online good and services delivery has been driven by significant growth in the number of tech-savvy, middleclass consumers. Such platforms offer affordability and greater choice -and are therefore more desirable - to workers than other forms of labour market participation.

The global trend of moving away from the 'standard employment' model, under which workers effectively sell some level of control over their labour to their employer in return for a salaried wage also facilitated the growth of gig economy.

WILLINGNESS OF SHARED SERVICE RECIPIENTS TO HIRE GIG-BASED SERVICES: Shared services include commonly utilised services across industries, with differing degrees of usage by corporates and MSMEs. Willingness to hire gig-based services depends largely on the frequency, criticality of the role, credentials and reliability of the service provider. For example, in a study, employers indicated significant hesitation in hiring gig-based services for accountants. In this respect, an interviewee notes: An accountant needs to have a personal connect and cannot be hired from a gig platform - my accountant knows more about me than my wife! (BCG, 2021, P.69)

IMPLICATIONS AND CHALLENGES OF GIG ECONOMY: Hunt & Samman (2019) argued that the implications of the gig economy for workers vary according to context and the pre-existing configuration of the labour market.  Cross-country experience shows that being a high-income country, UK divides individuals into broadly three categories: self-employed, employees and a middle-category called "worker." Gig workers can fall into any of these three categories. While the "self-employed" are entitled to almost no benefits and the "employees" have complete employment benefits including parental leave, the "worker" category is entitled to a minimum wage, paid vacation and pension.

The ride hailing, delivery and personal errand services are the manifestations of such instances.  Whatever be the case, the gig economy enabled by digital platforms is growing rapidly, and increasingly replacing non-platform gig work. Globally, more than half of gig jobs are for low-skilled, low-wage work. Only around 30 per cent of them require specialised skills and expertise. According to the 2022 report by India's public policy think tank, NITI Aayog, on 'India's Booming Gig and Platform Economy', the share of gig workers in total workers increased from 0.54 per cent in 2011-12 to 1.33 per cent in 2019-20. This study reveals that about 47 per cent of the gig work is in medium-skilled jobs, about 22 per cent in high-skilled, and about 31 per cent in low-skilled jobs.

GIG ECONOMY, FIRMS (EMPLOYERS) AND HR: Gig economy allows firms to rid themselves of well-paid employees, replacing them with cheap freelancers. This seems to be a benefit for firms (employers) to rid of the lifelong commitment towards employee's welfare. Employers no longer need to hire someone full-time and commit to a monthly package of benefits. Instead, they can choose to hire the worker just for the hours the service is required for. However, this is a big challenge for workers to have job security and sense of belongingness to any particular job/organisation.  The rapid growth of the gig economy represents one of the most significant challenges for the HR department/human resources professionals. In the gig work environment, human resources/HR professional face a big challenge in leading the change in culture, programmes, processes, and policies originally designed for full-time employees to a new era when more of the work is/will be done by contingent workers (also referred to as platform workers, temporary workers, agency workers, on-call workers, contract workers, independent contractors, or freelancers).

GIG ECONOMY-- BENEFITS FOR WORKERS: Gig economy has both benefits and costs for workers. Among the benefits, workers enjoy more flexible autonomous work environment. They can supposedly choose what to do, how, when, where and for whom. Many of them are able to find jobs and income previously hard to obtain. Gig employees can dedicate more time to learning new skills than traditional workers because they can engage in low-intensity jobs while learning complementary skills. A gig economy can increase work-life balance of the workers over many traditional jobs that most millennials and GenZ seek. The rise of the gig economy is also considered beneficial for new generation of employees, as they can have multiple sources of income, as gig workers can work on several jobs simultaneously providing new job opportunities. Further, gig economy lowers barriers to entry.

GIG ECONOMY-- CHALLENGES/ COSTS FOR WORKERS: In spite of these benefits, workers also face/suffer challenges/costs associated with gig environment. They are deprived of the benefits associated with formal employment, including sick leave, casual leave, annual leave, insurance, gratuity etc. The platforms deny worker rights and protections; Online labour platforms frame their workforces as 'on-demand'. They could be 'fired on the spot' by ending their contract without notice.  Moreover, these platforms typically classify gig workers as independent contractors rather than employees. Platforms typically retain significant control over the labour process, through their automated systems of work allocation, surveillance, and discipline. This has led many to argue that workers are not independent contractors, but are in fact workers for the platforms.

But in reality, firms tend to classify workers as independent contractors. Potential misclassification of workers as independent contractors rather than employees may result in lack of workplace entitlements and job security. For example, employees are entitled to minimum wage, paid leave, minimum/maximum hours, pension, unfair dismissal protection. But these benefits are not entitled to workers who are classified as independent contractors. Example: Drivers for Uber and Lyft, as well as most workers in the gig economy, are classified as independent contractors, although their employers direct much of their work activities. Uber tells drivers where to pick up passengers. It also deactivates drivers' accounts if they consistently receive poor feedback from passengers. As they are classified as independent contractors, drivers are responsible for insuring their own vehicles, and the company does not provide them with health insurance, paid vacation etc. Gig form of employment also increases the vulnerability of workers.

The shift of business risks from firms to workers (in gig economy) provides extensive power to firm over the conditions of employment. Such control over the conditions of work in gig work environment puts gig workers in vulnerable situation. The increased personal risk of workers as stated earlier, often results in cost externalities borne by families, communities, and the society (Bieber & Moggia, 2021). In a gig economy environment, the greater granularity of work contracts enables firms to wield more, and perhaps arbitrary power over conditions of employment. Gig economy also weakens the labour market standards.

PUBLIC POLICY/REGULATORY RESPONSE FOR GIG ECONOMY: New legislature in the UK provides rights to gig workers to request permanent roles and paid time-off. Under new legislation, firms will have to provide a 'statement of rights'(SoR) on the first day of a person's employment. This SoR specifies the paid leaves they are entitled to, including sick, maternity and paternity leaves. The Australian government has recognised the importance of regulations for gig workers and brought out the Fair Work Amendment to ensure that all workers have the protection of the Fair Work Act, 2009, and access to the labour standards, minimum wages, and conditions established under the Act. China is yet to formally define or recognise gig workers in its employee classifications. In India, the legal framework does not seek to equate gig or platform workers with employees. Indian jurisprudence refers to gig workers as independent contractors.

GIG ECONOMY AND BANGLADESH: As a low-income country,  gig economy in Bangladesh has grown significantly (i.e., there has been a meteoric rise of gig companies in Bangladesh, e.g., Uber, Pathao, HungryNaki etc) in the last decade without any categorisation like UK. The online freelancing segment of the gig economy includes some 500,000 active workers. Bangladesh's ridesharing industry is worth USD 259 million, representing 23 per cent of the transportation sector. Within the next five to seven years, the estimated market value of ridesharing in Bangladesh is likely to reach USD 1 billion, according to a local newspaper report.

Gig workers in Bangladesh such as ride-sharers, delivery drivers, domestic workers often face dangerous conditions and high levels of insecurity, perpetuated by the business models and policies of digital labour platforms (Fair work Bangladesh Report, 2021 n.d. p. 3). It is a matter of concern that there are no safeguards for gig workers in the workplace. A study titled, "Fairwork Bangladesh Ratings 2022: Labour Standards in the Platform Economy" reveals that the majority of workers in Bangladesh's gig economy do not receive fair pay, benefits or even a contract from online platforms, revealing the awful situation in ensuring the rights of those workers. Bangladesh is yet to have regulations concerning gig workers. But there are few developments. In 2017, the government issued The Ridesharing Guideline to regulate ridesharing companies and providers. Ironically, the guideline does not lay down a clear legal guideline / protection for platform workers.

Thus, there is a growing public policy debate over how to regulate and measure new labour models (including protection of workers and ensuring the safety and social security of gig workers) given the growth of the gig economy. With this, it remains unclear whether Bangladesh's legal framework supports platform workers' collective representation.  Section 176 of in Bangladesh Labour Act, 2006 specifies a right of the 'worker' to form trade unions.  However, in reality, forming a trade union by temporary/gig Gig workers is difficult. Gig workers deserve recognition and protection under the Labour Act, 2006, since they occupy a crucial portion of the country's workforce and national productivity, and provide a significant contribution to GDP.

RECOMMENDATIONS TO PROTECT/REGULATE GIG WORKERS:

Much of the existing labour market legislation is still based on people having a standard employment contract. The platforms have no specific policies for gig workers for grievance redressal. It seems necessary to find the right balance between protecting workers and allowing firms the flexibility to make HR decision. In that case, establishment of a dispute redressal body would be especially effective where both parties could complain if there is any problem that emerges during service delivery. The following provisions may be considered for protecting gigsters from exploitation by employers:

n Employment contracts should ensure at least reasonable protection for all workers, including gig/temporary workers.

n Labour law/factory law should treat temporary or part-time employment workers like permanent/full-time workers.

Further, there should be a safety procedure for workers who visit the client's house for their service. If the service professional feels unsafe during the course of service delivery, there is no recourse to end the service immediately without facing negative consequences.

In most of the countries across the world, there are no legislations or institutions to comprehensively regulate digital platforms. Thus, a new and updated set of regulations is required, especially in the light of the expansion of gig economy network. The need of the hour is to establish a body or a "Platform of Platforms" with legislative backing, which would not only establish a standard set of guidelines that the platforms must adhere to but also monitor these platforms.

To conclude, although workers enjoy considerable autonomy in deciding their working hours, and nature of work (consumers are also benefited), these benefits can come at a cost to workers. Firms in the gig economy deny basic social inclusion of labour by treating labour as a constantly transferable commodity. Workers also face exploitation due to the temporary nature of work and lack of formal employment contract in most of the cases. In such a scenario, policymakers must find a way to ensure a greater degree of stability and protection for workers in the gig economy.

Kowser Nasrin is a public policy analyst.

nasrinnu@yahoo.com.

Dr Mohamad Abu Yusuf is an adjunct faculty at AIUB, Bangladesh.

ma_yusuf@hotmail.com