The gig economy: freedom or serfdom?

A study out of Sydney's University of Technology shows the gig economy is not all positive. Photo / AP

The gig economy - for some people it's a chance to choose their own jobs, hours, and work from home. For others, it's a form of exploitation, with little workplace protection.

The gig economy has become the name for the systems and software that allow workers to do a range of jobs for different employers at the same time, or work short spells between different companies.

Globally, companies are springing up to capitalise on this workplace revolution, and the likes of Uber, AirBnB and food delivery firms may be just the start.

Traditionally, freelancers or gig workers have included the likes of graphic designers, photographers, journalists, actors and translators, but the types of freelancers today have become far broader.

The economy includes professional people like doctors, accountants and lawyers, as well as aged care work with companies that provide a platform for workers and clients to connect for individual jobs.

The flexibility and ease of working in the gig economy has been lauded by businesses and those who run platforms that offer work.

However, a study from the University of Technology in Sydney shows not all opinions are positive.

Some labour activists and commentators view the shift in working practices as being exploitative.

Study researcher Sarah Kaine said of 60 ridesharing and food delivery workers interviewed, most described the costs and benefits of gig work as a difficult tradeoff.

"When you think of flexibility and autonomy at work you think of control, but almost every aspect of how the gig economy works is dictated by the digital platforms," Kaine said.

"You have to behave in a certain way otherwise you don't get certain ratings and then you get deactivated, so there's very little scope for true autonomy or control over how you work."

Kaine said the reality for most Uber drivers was that in order to earn about A$800 a week they would need to generate about A$1500 before fees and costs, which could mean working about 70 hours a week.

"It works well for people using it as a stop gap or part-time so if it's while you're waiting to do something else or thinking about what you're going to do next," Kaine said.

"For those wanting to make it work as a full-time gig, that became much harder."

But the study also highlighted the benefits of the gig economy. Many interviewees preferred gig work over other forms of low-paid employment in cleaning, hospitality or retail, and also viewed it as being a more appealing work environment.

"Workers in the study saw social interactions as part of their gig work as one of the more enjoyable aspects," Kaine said.

"A lot of the interviewees said they enjoyed the social aspect and talking to people, although some drivers said it was more isolating working from their car."

Uber Drivers Association chair Ben Wilson said the reality for most drivers was that fulltime gig work would not pay the bills.

Ben Wilson, chairman of New Zealand Uber Drivers Association, photographed at his New Lynn home. Photo/Nick Reed.

One Uber driver, who Wilson said kept very good books, had worked 30 hours a week for a year, picking all the best times to work and had made just $20,000 profit for the year.

"For these guys trying to do it as a main job, the only way you can support a family if a 30-hour week is paying $20,000, is if you do a 60 or 70 hour week - and that's a meagre living," Wilson said.

"The danger also exponentially multiplies so every 10 hours you add is doubling your risk of having a fatigue related accident."

A recent study from the McKinsey Global Institute showed that up to 30 per cent of working age people in the US and Europe are engaging in independent work, with 70 per cent of those doing it out of choice, due to time and flexibility.

The remaining 30 per cent, however, were doing it as a last resort, the report found, with poorer households more likely to participate in independent work for lack of better options.

Wilson said for a significant number of Uber drivers, the draw was the social side.
"For the most part, drivers here don't last," Wilson said.

"The exceptions are people that can't get any other job or absolutely need the flexibility for whatever reason and the other is people that aren't motivated by money.

"And it's a surprisingly large number of people that fall into that category so it's very common for retirees to drive Uber for the social aspect."

Studies by the Commission for Financial Capability have shown that despite the retirement age in New Zealand being 65, most Kiwis were still willing and able to work past that age, with the gig economy seen as a good way to continue part-time and flexible employment.

Wilson said research from the US had shown the average time people worked for Uber was just four months.

He said the reality of the cost of fuel, vehicle, insurance and other factors resulted in most drivers making just $10 an hour.

The flexibility of work was also seen as a misnomer, Kaine said, with gig workers often having to take work at the busiest times of the day or accept any work available to make freelancing worthwhile.

Classifying workers as independent contractors also came with other issues, with gig workers often missing out on benefits such as holiday and sick leave, and job security.
Last October Uber drivers in the UK won the right to be classed as workers rather than independent contractors, setting a precedent for the company.

The ruling meant drivers would be entitled to holiday pay, paid rest breaks and the minimum wage.

According to Kaine, most workers understood the trade-offs between the positive and negative features of gig work but saw it as the reality of their position in the labour market.

"A number of our interviewees felt exploited and/or would prefer better paying 'real jobs', validating concerns about regulation, pay and conditions in this industry," Kaine said.

"But, gig work allows these workers to meet their immediate needs and gives them a sense of being their own boss."