By Nadia Zaifulizan
We are currently living in a gig economy.
This means that more and more people are getting paid for the service that they provide, but usually not in a permanent employment setting. In this economy, employment is usually short-term, freelance or project-based. Workers are independent and the work arrangement is usually flexible, but there are less long-term compensation and job security. All remunerations are short-term, mostly immediate. There is no EPF (Employees Provident Fund) and no medical protection. You are only as employable as what you can do and how much you can do at required times. As time pass by, if you are unable to fill all the needs of this equation, then the job may not necessarily continue to be yours. There is no long-term ties that bind you with the organization. There is no company ‘loyalty’. But you will have plenty of job freedom and the flexibility to offer your services with multiple potential employer.
Sounds familiar? We can look at the examples of how a gig economy works.
The gig economy can cover many different areas including delivery services (Foodpanda, Grabfood), accommodations (Airbnb, OneFineStay), and transportation (Uber, Lyft). What is chosen and paid for by consumers or clients are subject to the timely availability of services offered and how closely it fits with their demands.
Inevitably, in current times more and more forms of work in the gig economy are reliant on technology-based platforms and the “gig” type of companies. These platforms are needed because it presents the service to the clients or consumers in a comprehensive way and with easy accessibility. These companies create the space and opportunity for gig workers to offer their services, while providing a platform for clients or consumers to search for the type of services that they wish for. In this system, the companies operate by taking a percentage of the income coming from clients or consumers.
Technology platforms help the gig workers by optimized algorithms, spatial data, intelligence predictions, which offer services that is the closest to what a client might need or want, to the most compatible clients or consumers. This opens more opportunities for gig workers to be able to offer their services.
However, with every platform-based service there is a trade-off that the gig workers are subjected to: which is the changing amount that the platform companies extract from each service. By current standards, this amount may continuously change. In fact, recently gig workers are already facing the brunt of the impact. In California just days ago, hundreds of Uber and Lyft drivers were launching a protest caravan across the locality due to the increasingly lowered remuneration that drivers are receiving, when business returns were growing massively for Uber and Lyft. The pay rates for drivers are decreasing, and the surge rates (peak demand) were capped at a fixed amount instead of using a multiplier that could double the amount that the drivers earn.
On top of congestion, long hours to meet a basic fulfilling income, and health implications, drivers are struggling to sustain a living.
In Europe, policymakers has expressed concern over labour rights in this gig economy, since millions of Europeans are engaged in independent “gig” work. Legislation for minimum rights in “casual or short-term” employment was passed, but some platforms were able to circumvent the legislation by reclassifying workers for digital platforms as non-employees. Digital platforms continuously have a strong influence over the gig economy ecosystem. When Deliveroo, a digital platform provider for deliveries decided to leave its German market to escape from stiff competition by Takeaway.com, 1100 riders across Germany were only given 4 days’ notice. Riders allegedly have to manage 3 or more rides per hour to gain an hourly income of €16.50. But riders too are burdened by insurance and taxes, to make an acceptable living in a European city.
On the contrary, the gig economy also has its perks. If you’re young, creative, and are just starting out to get an even footing while you hustle through to achieve your dream career, you can do a short gig using your creative skills and qualifications while you earn a basic amount
through another gig, to survive until the next big opportunity arrives. You could continue to flexibly hone your skills and gain experience while you earn enough to support your expenses. It is a good opportunity for the creative soul. The struggle of making it big will sharpen your abilities and re-centre your long-term goals.
Looking through the fundamentals of the gig economy, we can see that employment patterns are constantly changing, and job opportunities may not always be robust. There are constant challenges in staying relevant for employment, but for short-term necessities, the gig economy provides a huge opportunity. The path to a fulfilling career is a long one, but riding on the gig economy might just be the stepping stone (albeit a rocky one), to utilize your abilities for specialized goals. In the long run, you might need to be skills-ready too, if the gig economy becomes the main employment model of the future.