Gig Work Unveiled: From Origins to Modern Realities

WHAT EXACTLY IS GIG WORK?

The gig economy has a history that spans several decades, evolving in response to changes in technology, labor markets, and societal needs. It dates back to the 1940s the rise of temporary work and the idea of flexibility where temporary work agencies emerged in the post-World War II era providing businesses with short-term labor to meet fluctuating demands. Later in 1980s and 1990s, the concept of freelancing and independent contracting gained traction, driven in part by the growth of technology and the ability of individuals to offer specialized services to multiple clients. 

With the advent of the internet, online platforms started connecting freelancers with clients on a global scale in 2000s. Websites like Upwork (formerly Elance and oDesk) and Freelancer.com emerged, providing a marketplace for freelancers to showcase their skills and find work. The gig economy expanded further in the 2010s with the proliferation of on-demand platforms for various services, including transportation (Uber, Lyft), accommodation (Airbnb), and task-based work (TaskRabbit).

In 2020, the world turned upside down by the seismic shifts of the COVID-19 pandemic, traditional work norms crumbled. As office doors closed and the concept of the 9-to-5 became a distant memory for thousands who lost their jobs, the gig economy further expanded. Beyond a mere buzzword, the gig economy represented a profound reimagining of work to many more thousands across the world, where digital connectivity has woven a global tapestry uniting businesses in need and skilled professionals ready to seize the opportunity.

What is the gig economy and gig work?

However, there is still some ambiguity on the term gig work and gig economy. Although at its most basic level, gig work typically involves independent contractors or freelancers performing various services or tasks, some organizations have provided their own definitions and indicators that characterize gig work.

For instance, Merriam-Webster defines a gig worker as a person who works temporary jobs typically in the service sector as an independent contractor or freelancer. MasterCard describes gig workers as freelancers connected to customers via digital platforms. The UK government emphasize the role of digital platforms in facilitating matches between gig workers and customers on a short-term, payment-by-task model. Mercy Corps, on the other hand, has provided three indicators that characterize gig work. First, gig workers typically enjoy a high degree of independence and flexibility in how and when they work. Second, the relationships between gig workers and those they perform services for are often short-term in nature, with work done on a task-by-task basis. Third, gig workers tend to be paid per completed task rather than on a salaried basis.

One common theme that is observed in these definitions and characterizations is the link that is made between gig workers and digital platforms. These gig platforms or gig and professional marketplaces (GPMs) are online skills matching platforms that connect gig workers with gig customers. They are different from product trading platforms (eg, Amazon), service trading platforms (eg. banking services) and asset sharing platforms (eg. Air BNB) since the traded element is gig workers’ skills.  Ride-hailing platforms such as Uber for instance are most popular among such platforms operating in over 10,000 cities globally, with drivers completing over 30 million trips daily.

Furthermore, the gig economy caters to individuals with different types of skills. White collar jobs such are available for skilled individuals, such as professional consultants and freelancers that perform project/contract-based assignments. Semi-skilled and unskilled individuals can also find blue collar jobs, such as household, maintenance services and construction jobs.  Supported by digital platforms, the gig economy have afforded these gig workers flexibility, temporary work and a source of income.

Negative Views

However, this view about gig work is not shared by all. There are some negative sentiments that have surfaced recently against gig economy. One of the main criticisms is that gig workers often lack job security. They don’t have traditional employment benefits like health insurance, retirement plans, or job stability. Gig workers are also typically classified as independent contractors, which means they may not have the same employment protections as traditional employees, such as minimum wage guarantees, overtime pay, and workplace safety regulations. Some argue that gig work can lead to low wages, especially when factoring in unpaid time spent waiting for gigs, transportation costs, and lack of benefits. Gig workers may also face unpredictable income due to fluctuations in demand for their services. This can make budgeting and financial planning challenging.

Their lack of collective bargaining power also makes them vulnerable to exploitation and prevent them negotiating for better wages and working conditions. This is also worsened by their limited legal protections in case of workplace issues or disputes. The lack of traditional employment relationships can complicate matters when it comes to addressing grievances. Some critics also claim that gig work may exacerbate existing social and economic inequalities, with certain demographics facing discrimination and unequal access to opportunities within the gig economy.

Nonetheless, it’s reasonable to conclude that certain sectors or types of work may be more conducive to gig arrangements, while others may face more challenges or have inherent limitations when it comes to gig work. The suitability of gig work can depend on various factors, including the nature of the work, skill requirements, and the preferences of both workers and employers. Here are some considerations

Over the years, there are six sectors in particular that have proven to be more conducive to gig works than others. Creative Industries come at the forefront in this regard since it often offers freelancers in graphic design, writing, photography, and other creative fields gig work suitable due to the project-based nature of their tasks. Many professionals in the Technology and IT sectors, such as software developers, programmers, and IT consultants, can also easily take on freelance or contract roles based on specific projects. Marketing and Digital Media professionals, social media managers, and content creators often engage in gig work as they can contribute specialized skills on a project basis. The Consulting and Advisory Services are also among these offering consultants and advisors in various domains, including business, finance, and legal services who choose gig work to provide expertise on specific projects. Transportation and Delivery also has a well-established gig model with platforms like Uber, Lyft, and DoorDash connecting drivers and couriers with customers. Additionally, Domestic Services performed in people’s homes present another common global avenue for gig work via platforms such as handiwork, including cleaning, repairs and caregiving. Hence, it’s essential to consider the specific characteristics of each industry when evaluating the feasibility and desirability of gig arrangements.

Sectors Conducive to Gig Work

Certain industries have emerged globally as natural fits for flexible gig arrangements accommodating independent contractors. Transportation platforms like Uber and Lyft enable individuals worldwide to utilize vehicles and time for booming ride-hailing gig work. Delivery and logistics also provide huge cross-border opportunities through Foodpanda, Doordash and more for services like meals, packages and documents delivery that have taken off internationally. Skilled crafts production also relies on independent contracting models globally, with artisanal goods regularly produced on a commission basis by gig workers. Additionally, knowledge-based freelance platforms enable wide-ranging international gig opportunities for web development, writing, translation, and other skilled services by connecting workers to clients worldwide via marketplaces like Fiverr or Upwork. These industries accommodate flexible gig labor through platforms operating on a global scale.

Gig Sector in Developing Countries

The gig sector offers several additional benefits to developing countries, contributing to economic growth, employment opportunities, and individual empowerment. It can primarily help increase employment rates by connecting individuals with work opportunities including jobs that might not be available through traditional job channels. This is especially beneficial in regions with high levels of unemployment or underemployment where formal employment opportunities may be scarce. The gig economy can help fill these gaps, offering alternative income sources and reducing dependence on a limited number of industries.

The gig economy can also be particularly empowering for women in developing countries. It provides them with opportunities to work from home, balance family responsibilities, and participate in the workforce on their terms. In most cases, digital payment is a key component in gig arrangements which can contribute to financial inclusion by providing individuals with access to formal financial services. This can be crucial in regions where traditional banking infrastructure is limited. However, it is also crucial to recognize that challenges and concerns, such as job insecurity and lack of labor protections including setting minimum wages, exist which might even be worse for gig workers in developing countries.

The Socio-economic Survey 2018-2019 revealed that Ethiopia had 3.72 million part-time or casual workers which accounted for 10% of Ethiopia’s total employed population. This is indicative of the substantial role of gig work has in creating job opportunities for people, even without well-established online platforms facilitating such work. Traditionally, those needing services from construction workers, plumbers, or electricians would rely on intermediaries like brokers, specific meeting places, or social networks through friends and family to find suitable workers. As such, part-time and casual laborers can be considered representatives of offline gig work activities.

Conclusion

In conclusion, the gig economy presents a myriad of potential benefits, offering flexible employment opportunities, and increasing job rates by utilizing their unique skills. It also fosters economic diversification and financial inclusion, particularly benefiting women and contributing to the overall adaptability of employment models to local conditions. Additionally, the gig economy encourages technology adoption and skills development, promoting a more versatile and tech-savvy workforce. However, it is essential to acknowledge and address concerns related to job insecurity, lack of labor protections, and potential inequalities. Policymakers, businesses, and workers should collaborate to ensure a fair and supportive gig economy that maximizes its positive impact while mitigating potential challenges in developing countries.

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