Gig Economy

Question 1

What type of services come under the Gig economy?

Answer 1

Courier-type services
e.g. Deliveroo
Uber vs. Taxis

Question 2

Define Gig Economy

Answer 2

A way of working based on people having temporary jobs or doing separate pieces of work, each paid separately via Digital Platforms

Question 3

What are the differences between Gig economy + Zero-hour contracts?

Answer 3

Zero-hour contracts: -Working hours NOT guaranteed
-Little job security- but still seen as Employees
Both types of workers:- Not entitled to Sick pay

Question 4

Name 2 well-known Controversial cases of the Gig economy

Answer 4

Uber vs. Taxis- Uber drivers won right to be classed as ‘workers’- Not self-employed–> Gain worker rights + Insurance etc.
Pimlico Plumbers- Court of Appeal agreed to Tribunal- workers entitled to basic worker rights

Question 5

What are the benefits of the Gig economy to Firms?

Answer 5

• Cost reduction- lower payroll, less investment, less infrastructure required- e.g. Uber drivers use own cars
• Flexibility to meet demand- Firms can adjust required amount of labour according to expected demand

Question 6

What are the benefits of the Gig economy to Workers?

Answer 6

• Additional, Flexible working hours
• Gain Additional Income
• Possibility to work from home- avoid commuting costs

Question 7

What are the costs of the Gig economy to Firms?

Answer 7

• Lack of control over workers
• Unreliable Supply of Labour
• Unhappy employees–> Lower Productivity

Question 8

What are the costs of the Gig economy to Workers?

Answer 8

• Job + Income uncertainty
• Workers bear additional risks in job
• Lower Benefits- less sick pay, less holiday

Question 9

What are the 3 main issues with Gig Economy?

Answer 9

1. Legal Issues- workers classed as Self-employed or employees
   - Employees have Worker rights
2. ‘Gig Workers’ tend to displace workers in many Traditional jobs- e.g. Uber vs Taxis
3. Entry of new companies/services (due to technology)
   - Lower Earnings + Employment
   - Increased Competition

Question 10

Case Study: UBER

Answer 10

• Uber Entry into Market–> 10% decline in earnings for incumbent taxi drivers
• –But no significant impact on Taxi drivers’ labour supply or composition of Driver pool
• Increased Competition (low-cost substitute)–> Downward pressure on Earnings for incumbent drivers–> DEMAND effect
• more Productive drivers- exited Taxi workforce + joined Uber