Regulating work in the ‘gig economy’

Janine Berg, Senior Economist

Janine Berg, Senior Economist at the ILO and Valerio De Stefano, ILO Technical Officer on Non-Standard Forms of Employment

The ‘gig economy’ which includes ‘crowd-work’ and ‘work-on-demand via apps’, is often seen as the future of work.  And though it makes headlines nearly daily, many important questions regarding labour protection have yet to be addressed.

Crowd-work is work that is performed on on-line platforms by groups of individual workers, responding to on-line calls.  It can include skilled jobs such as programming and translation to more routine jobs such as cleaning data, tagging photographs or compiling lists of books or movies that on-line customers may be interested in purchasing.  The work is performed on-line by the ‘crowd’ who may live anywhere in the world so long as they are connected to the internet.

With ‘work-on-demand apps’, workers perform duties such as providing transport, cleaning, home repairs, or running errands, but the workers learn about these jobs through mobile apps.  The jobs are performed locally.

Although there are important differences between the two types of work, they both facilitate a quick match between demand and supply, rendered possible by the internet and mobile technologies.  The technology enables business and individuals to mobilize workers on a ‘pay-as-you-go’ basis, at the click of a button.  It can also offer workers flexibility in their hours and place of work, and can be particularly attractive to workers who may be home-bound due to disability or other circumstances.

The challenge of regulating work

While the ‘gig economy’ can offer new opportunities, it also poses some important risks for workers that have yet to be addressed.

To begin with, we need to recognize that we are not talking about ‘gigs’, ‘tasks’, ‘favours’, or ‘rides’— but work.  And work is done by workers.

Yet many of these workers have become invisible.  When you stream a movie on-line, the site will recommend another movie you may like.  This recommendation is based on information supplied by workers who have hand-tagged television shows and film for content, based on their knowledge.  There is a worker behind the computer.  But is this person benefiting from prevailing labour laws?

And in the cases where labour laws are applied, it is not always clear what to do when the worker is in India but the on-line platform is based in California and the client is in Germany.  If there are workers from different parts of the world, which minimum wage law prevails?    And how can workers ensure income security amidst such competition?  Also, how flexible is working time when compensation is so low that one has to work very long hours to make a living?

Another challenge is eliminating the misclassification of employment status.  Many on-line platforms are quick to dismiss any responsibility as employers, categorizing these workers as independent contractors.  Some situations fall into a grey area and need to be addressed.  But there are other cases of blatant misclassification, with important consequences for the worker today and in the future. The rise in the number of disputes and litigations on this issue indicates the need for responses.

In addition, workers have little recourse if their work is rejected by the ‘client’, giving rise to cases of wage theft.  Workers risk becoming ‘unlisted’ (or in practice dismissed) if their star ratings fall, adding pressure to be always connected, always available and always cheerful.

There are also risks for the fundamental principles and rights at work.  How can we ensure that work isn’t being performed by children?  How can we ensure that compensation is not discriminatory? How can faceless workers spread across the world organize for better conditions?

Labour protection and technological innovation can be compatible

The ‘gig economy’ may be the future, but we have to begin by recognizing that it is indeed work and that the work should be decent.  Labour protection is not incompatible with technological innovation – it just needs to be adapted. The questions were addressed during two dedicated sessions at the Fourth Conference of the Regulating for Decent Work Network, held at the ILO on 8-10 July.

One thought on “Regulating work in the ‘gig economy’

  1. Interesting post! I would add that the flexibility and efficient use of assets promoted by the ‘gig economy’ can be very beneficial for the final consumers. In addition, the platforms on which the ‘gig economy’ is based basically allow anybody to tap into a global network at virtually no cost.
    I wouldn’t be surprised if a sizable numbers of the jobs that have been created within the flexible arrangements of the sharing economy, were to disappear after the implementation of much stringent regulation.
    I agree that, at some point, we may want to have a legal framework to better regulate these new types of employment, but too much regulation (especially too soon) may lead to a much more unfavorable outcomes for all the parties involved.

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