By Restaurant Business Magazine

Thoughts on the gig economy and the ill-defined “digital labor platform.”

Last week, the EU Commission drafted rules that would potentially significantly improve working conditions for the 28 million people in the EU who participate in what is known as the “gig economy.”

In the age of the iPhone, the term “gig worker” might bring logos of multi-billion dollar companies like Uber, DoorDash, or Deliveroo to mind. But during a time in which more individuals than ever are self-employed via what the EU Commission calls a “digital labor platform,” it seems worth it to start by distinguishing the “gig worker” from the freelancer, IC, or other.

Merriam Webster defines “gig worker” as: a person who works temporary jobs typically in the service sector as an independent contractor or freelancer : a worker in the gig economy. “Freelancer” is defined as: not sponsored by or affiliated with an organization or authority, while “independent contractor” is: a person hired to do work who controls how the work is done.

All definitions allude to the independence and autonomy which comes with the type of work to which they refer and seem relatively interchangeable. But legal and social implications of the ill-defined classes of independent workers say otherwise. For example, tax law requires that traditional “gig” workers (i.e., Uber drivers) file 1099-Ks (specific to third party networks) vs. 1099-MISCs, which are most commonly reserved for “freelance” workers (i.e., artists, painters).

Proposed changes to the future of gig work by the Commission have ultimately placed responsibility onto the platforms, as only two of the five following criteria must be met for a platform worker to be classified as a true employee:

“(a) effectively determining, or setting upper limits for the level of remuneration;

(b) requiring the person performing platform work to respect specific binding rules with regard to appearance, conduct towards the recipient of the service or performance of the work;

(c) supervising the performance of work or verifying the quality of the results of the work including by electronic means;

(d) effectively restricting the freedom, including through sanctions, to organise one’s work, in particular the discretion to choose one’s working hours or periods of absence, to accept or to refuse tasks or to use subcontractors or substitutes;

(e) effectively restricting the possibility to build a client base or to perform work for any third party.”

Ultimately here, the Commission is leaving it up to the platforms to tweak their models, AI or otherwise, to reduce the level of control they apply. It will be interesting to see how these platforms will adjust their algorithms to either lessen worker stringency or maintain it, as employee and contractor demand shifts over time.

While this will certainly be interesting to watch play out, there is another piece of the EU Commission’s proposal that seems somewhat more interesting: The Commission uses the term “digital labor platforms” to describe the platforms on which “gig” work takes place. The EU defines them as “digital networks that coordinate labor service transactions in an algorithmic way.” But which platforms can be classified as a “digital labor platform,” and which can not?

Here is where a distinction between the gig and creator economy makes sense to draw, given the sheer amount of creator platforms. This is especially true as it relates to ensuring an ideal environment for the self-employed.

I can envision a world in which YouTube or Instagram can be viewed as “digital labor platforms,” as they are some of the major platforms on which the modern day self-employed ~employ themselves.~ But let’s break that apart. This is more of a philosophical exploration than it is a legitimate one, as I do believe that the products and services provided by independents on Uber and YouTube are inherently quite different, but I think it’s one worth partaking in, as the most desired job amongst children remains “YouTuber.”

The main difference between the Instagram influencer and the Deliveroo driver to the platforms which support their gigs or projects seem to be the types of products and services they support. The Deliveroo driver does not touch ownership of product at any point, but simply provides a service.

In contrast, for most social media creators, there is a very clear product (and or blended product/service in so far as it entertains): curated content. The creators are coming up with this content, generating it in some way shape or form, and sharing it. If the content is shoppable, which, let’s assume it is — Instagram takes 5% per shipment (traditional platform fee) and the creator and brand work out the subsequent split, assuming they are different entities. Here, the creator provided both a product (content) and service (sharing that content).

There is certainly a world in which the creator simply shares (or delivers ;)) pre-generated content, such that it reaches the creator’s mass audience. In this case, I’d argue, the creator is providing a service; a service not too dissimilar from that of the Deliveroo driver. But for the most part, it seems to be a product/service versus strictly service distinction.

Nonetheless, it poses the larger question of — how might some of these other “digital (labor) platforms” be held responsible in the future for both the health and wellbeing of those who work on / within them? With stories about the violence faced by delivery drivers around the globe, it seems fit that we’ve started to ask these questions in the context of delivery service platforms. But as stories surface which shed light on the negative mental health implications of using (and therefore “working” on) large social media platforms like Instagram, I wonder if it’s only a matter of time until we discuss what the future of work should look like for influencers, or those individuals who spend the most time on these platforms.

How might we better define “digital labor platform” and ensure the health and wellbeing of all those who are self-employed by these platforms, gig-worker, freelance creator, or otherwise?

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Early Stage VC // Media Tech

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Juliette Rolnick

Juliette Rolnick

Early Stage VC // Media Tech

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