Current outlooks for the gig economy

The last time we wrote about the gig economy, we focused on building an app for it. Since then, there have been a number of conversations and changes in the marketplace.

Gig worker benefits?

For starters, California changed the way gig workers are classified. Obviously, the pandemic has accelerated the way everyone is assessing this economy as well. Gig workers are eligible for unemployment benefits in response to Covid-19, but they need to prove how the pandemic has impacted their work. 

Moreover, discussion around how to provide gig workers benefits is frequent and rightfully so as more companies rely on them. How this can be achieved is still being debated and as workers unions and governments discuss with companies what this model looks like. 

Workers push change

The frustrations of participants in this economy have moved beyond being upset and into action. In New York City, Uber and Lyft have already been regulated to provide a minimum wage for drivers, but that doesn’t mean it will continue without a fight in other cities. In Seattle, the city is sorting through conflicting reports around drivers’ incomes and what they should be paid as minimum wage. Meanwhile, Massachusetts is suing both companies.

Riding sharing isn’t alone in its call for changes by states and participants. Target owned grocery shopping app, Shipt, is under fire for its new algorithm determining how shoppers are paid, leading workers to boycott. The compensation which has traditionally been commission based for completing a job has shifted to a black box algorithm. As a result, it’s now unclear how wages are being calculated, but it’s clear Shipt shoppers are being paid less.

Independent contractors vs. Employees

Many of the arguments for gig workers receiving benefits from their company center around the ability for them to control their pay. If they are setting their own wages, this would fall more in line with independent contractors. Otherwise, companies using an algorithm to calculate workers’ pay makes it appear as if these workers are employees since they aren’t in control of their wages. At least, that’s the legal argument being presented in court cases both locally and abroad. 

Flexible schedules

For many, gig work is convenient as they can set their own schedule. As cases of Covid-19 continue to surge, work from home is still what many prefer or what they’re used to and most work collaboration can be handled via phone or video calls.  Even conferences have shifted online with pre-recorded events. However, not everyone has the privilege to work at home. Workers who need to be out and about are taking the necessary precautions of PPE and limiting their contact with people. 

More app usage, more workers

People are spending more time on their phones, which means more pick ups, deliveries and app based decisions. In fact, usage is at an all time high. With this trend, you can expect more people joining the gig economy workforce, whether to supplement their income or as their primary job. While there are a number of trends to watch, the increase in this workforce will inevitably change the dynamic of how companies operate.

Redefining work dynamics

The gig economy provides everyone involved a reason to reassess the employee and employer relationship. Gig workers, which include freelancers, have traditionally not seen as many protections, but as their classifications start to change, so will their rights as workers. It’s unclear what benefits workers will receive, but it’s becoming clear that change is coming. For companies entering the economy, it’s important they consider how to compensate their workers. While the  marketplace is still evolving, with future policies and the effects of automation affecting the workforce, it’s clear this style of work is growing and will continue to stay around.

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