Gig Economy-the new normal

GIG ECONOMY

A gig is a job that lasts a certain period. A worker who performs such jobs is known as Gig Worker or Freelancer. They do such jobs on a contractual or part-time basis, for example — drivers, musicians, technicians, tutors, etc.

Most of the time these gig workers do multiple jobs at one time, to earn some extra (part-time) income or do it voluntarily and out of a passion to polish their skills.

Economy comprising such contractual/ temporary or part-time job market is known as the gig economy. Today such job market is increasing rapidly against the full-time job market. Some real-life examples are Uber and Airbnb. On a global scale, design and tech freelance jobs are the most popular with 59% of gig workers doing them. Some of the major industries that hire gig workers are education, writing, computer and network, food, transportation, etc.

GROWTH IN GIG ECONOMY

The global Gig Economy is expected to grow from $204 billion in 2018 to $455 billion in 2023, a Compound Annual Growth Rate (CAGR) of 17.4% — according to a report from Mastercard.

It all started as a solution for some problems like financial crunch, rigid working laws, underqualified, recession, pandemic, etc.

The gig economy is helping people to overcome these problems to a large extent if not fully. They can work with multiple organizations or work on different projects at one time to earn their deserved income. They can also work from any part of the world for an organization, placed in any part of the world, at their own specified time rather than following a particular 9–5 working time. There is no need to pass any eligibility criteria if required or to have some specified qualifications but what matters is the skill sets, required to get the job done. In India, several giant organizations are famous for hiring gig workers, some of the software companies are Wipro and Infosys who hire them on a project-to-project basis.

We have seen a boom in this job market during the time of recessions. When people are fired from their full time or permanent jobs because of the recession, most of them find their place in the gig market and becomes a gig worker to support their life. Hence, these are quite real examples to explain the growth in this economy.

MERITS OF GIG ECONOMY

Nowadays organizations are hiring more freelancers than full-time workers because one, it cost them much lesser and second, they get the required niche skills to get the job done.

To take care of the client’s needs and the problem of different time zones in different parts of the world, organizations can hire freelancers in different parts of the world to work remotely for the regionally distributed clients.

The gig economy is more about innovation. Organizations are trying to set up a gig economy model by providing various career certificate courses and organizing events like hackathons, where people solve real-life problems to gain niche skills in their field and start taking up freelancing projects. For example — Google is providing Google Career Certificates in various fields like data analytics, IT support, UX design, project management. In return, gig workers help these organizations to realize gains from the knowledge transfers to their full-time workers in the process.

DEMERITS OF GIG ECONOMY

The most important point to quote here is that earlier there were no rules and regulations to govern this economy. Earlier the gig workers weren’t provided any additional benefits like minimum wage guarantee, paid leaves, health insurance, etc., by the employers. If they do the job, they get paid otherwise they don’t but now as the time is changing and adopting this new culture of work very rapidly, governments are taking action to set up the rules and regulations in the interest of everyone. For example — on 19 February 2021, Britain’s top court ruled that ride-hailing giant Uber’s drivers are entitled to workers’ rights as they are workers but not independent contractors, in a judgment with huge implications for the “gig economy”.

One more point to note in this section is the issue regarding the confidentiality of the product. Since gig workers are not full-time workers and can leave the job or half-done project at any time with the knowledge of a new product which an organization is going to launch in the market, this could turn out to be very costly to the organizations considering a large amount of competition and rival organizations in the market.

IMPACT OF THE PANDEMIC ON GIG ECONOMY

Almost every economy went into recession as the pandemic hit it hard. Some companies in the gig economy done well in the pandemic. There was an increase in demand for the online delivery of food, medicines, and products of daily needs as everyone wants them to be delivered at their doorstep without putting a single step out of the house, maybe because of the fear of getting infected with the virus or the quarantine regulations. For example- Zomato, the online food delivery company done well in the pandemic.

Though in some respects the gig economy has done well than other economies but not every company of it done well, like in the case of Uber. According to one report, Uber rides were 73% lower in the second quarter of 2020 in comparison to the same period of the previous year.

Gig workers are not full-time workers, they can’t take paid leaves and have to continue their job to get the income, as a result, gig workers are more prone to health risks during the pandemic. For example — taxi driver is one of the occupations with the highest number of Covid-19 related deaths.

Another disadvantage for the gig workers is that, since they are not registered with the government in any form, they could not take the benefits of various welfare schemes provided by the government to the registered workers in such a pandemic. For example — they can’t be covered with Self Employment Income Support Scheme.

WAY FORWARD AND CONCLUSION

A new area of engagement or work in the gig economy should be the formation of new rules and regulations for labor protection. Big and private companies who hire gig workers are the only ones who have the power to formulate their job contracts, as a result, the conditions of working were more in favor of the big companies. So, the government should step to formulate new rules and regulations to eliminate the exploitation faced by the gig workers.

The gig economy is shaping India’s new work culture by adding more flexibility and autonomy to it. More and more workforce is getting attracted towards it because of its numerous work features over the traditional full-time employment. A large number of women are also joining this economy by utilizing its feature of remote and flexible hours of working, as a result, it will prove to be a big step towards financial freedom.

We can see that there is a limitless potential that is left yet to be realized by the workforce, hence holds a promise for a better future.