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The Dark Side Of The Gig Economy: How The Future Of Work Puts Reputation In The Balance

24/08/2017 11:42

From taxi rides to hot meals, couriers and crowdsourcing, there's no doubt that we're living in the age of on-demand. Mobile technology has enabled us to source thousands of goods and services at the swipe of a fingertip, whether they're from around the corner or the other side of the world, as and when we need. This radical shift in consumerism and provision of services has only been made possible by an equally radical shift in the way we work, resulting in the birth of the gig economy.

A double-edged sword

At first, the gig economy provides a compelling proposition. Workers' time isn't controlled by an over-bearing boss, but instead can be flexible, picking and choosing the work, and indeed the hours, they wish to undertake. Supposedly this puts the power back into the hands of the workforce - now self-employed contractors.

The reality, however, is quite different. Often, the gig economy strips these contractors of the rights and benefits of permanent, full-time work - such as sick pay and holiday pay - and, as a result, is souring the reputation of the facilitating companies and attracting scrutiny from all angles, including regulators, trade unions and the ILO. According to the companies, they are simply connecting supply with demand. But a wider argument is developing around the ethics of the gig economy and the responsibilities that a company - whatever their role or purpose - should undertake.

Indeed, these conversations are leading to a greater focus on the legal status of workers and the potential misclassification of their employment status by certain companies. In some cases, these discussions are being escalated to the Supreme Court - as shown by the recent news that a high-profile plumbing firm, Pimlico Plumbers, has been granted permission to appeal against the ruling that a self-employed contractor working for the firm should have been made a permanent member of staff.

Workers of the world, unite!

A recent report by the former work and pensions committee chair, Frank Field, found that without the benefits and protection of permanent employment, some gig economy workers are being paid as little as £2.50 an hour. The report urges the government to stage an 'emergency intervention' to ensure that workers in the new economy are being treated fairly.

New technology firms - such as Uber, Deliveroo, Amazon Mechanical Turk or Crowdflower - whose proposition relies on connecting supply with demand must now walk a tightrope between the financial merit of the business model and the reputational and regulatory backlash that can occur if the public feel that workers are being exploited. This is clear when looking at the risk and reputation-focused concerns expressed in online conversations.

Data from Polecat has shown that in recent months 'treatment of workers' has been the most prominent cause for concern in the context of the gig economy with 'welfare state' being a recurrent phrase, highlighting the worry that the lack of employment protection for gig economy workers is simply transferring risk away from business and leaving taxpayers to pick up the bill.

In the spotlight

The disruptive, 'uberisation' of industries has been discussed with much anticipation over recent years, but concerns related to the casualisation and informalisation of work are now also increasingly coming to the fore, with zero hour contracts also in the spotlight. It all begs the question; how sustainable are these business models should the regulatory environment change and demand adherence to well established employment law?

The numbers employed in the gig economy are notoriously hard to estimate for obvious reasons - this is a highly distributed and irregular workforce that is often extremely hard to identify. Indeed in certain instances, prosecutors and regulators have leveraged social media to engage and identify such a workforce community to inform investigations. According to the McKinsey Global Institute, there are five million workers currently within the UK's gig economy and that number will continue to rise as each new, disruptive tech startup blooms.

Piece work - where an individual gets paid for a piece of work - has been around for a very long time. The smartphone revolution has put piece work on steroids and led to the rise of the gig economy. Regulators, courts and trade unions are catching up and there is ongoing scrutiny of the crimes and misdemeanours of certain business models. However, there is nothing inevitable about the future of work and in the same way that the likes of Uber caused disruption to the transport sector, so in turn, they may face disruption from changing societal expectations of what classifies as the acceptable treatment of workers. Reputations are in the balance and the companies that are proactive, responsible and accountable are likely to be the ones that stay around longest.

With thanks to my colleague, Jeremy Holland, for helping to inspire this post.

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