From Uber to Deliveroo, the ‘gig economy’ is increasingly visible. But with flexibility for workers comes uncertainty, so what is the future of the gig economy including the role of government?
In this episode, joining podcast host Michael Kitson, University Senior Lecturer in International Macroeconomics at Cambridge Judge Business School, are Cambridge Judge colleagues Dr Chris Coleridge, Senior Faculty in Management Practice; Dr Belinda Bell, Director of Cambridge Social Ventures at the Cambridge Centre for Social Innovation; and Dr Thomas Roulet, University Senior Lecturer in Organisation Theory & Information Systems.
This is the 17th in a series of “Cambridge Judge Business Debate” podcasts featuring faculty and others associated with Cambridge Judge Business School and the broader Cambridge community.
This latest podcast focuses on the gig economy – its benefits and drawbacks, and the role of government in ensuring that benefits from gig economy technology are shared throughout the ecosystem.
Here is an edited transcript of some of the podcast discussion:
What is the gig economy, and is it really new?
Michael Kitson: “It’s been suggested that the world of work is changing as increasingly workers are no longer salaried but are employed as independent contractors, and are paid by consumers for a particular job or gig, often arranged through a technology platform. Research by the Trades Union Congress estimates that one in 10 workers in the UK now regularly does platform-allocated work. Is the gig economy empowering workers, providing flexibility and encouraging entrepreneurship, or is it the product of big technology companies enabling the exploitation of workers? First of all, what is the gig economy?”
Belinda Bell: “When people mention the gig economy they’re usually talking about Uber drivers or Deliveroo and these platform-driven businesses. But it’s also reflected in the precarious positions of all sorts of people across our economy, the increased casualisation of their labour, and this includes academia and the medical profession. So it’s helpful to consider it more broadly in terms of precarious work and lack of salary security.”
Chris Coleridge: The last 30 years have sort of prepared the ground for the gig economy. We used to think that workplaces had a social function providing people with their social capital and the opportunity to socialise and learn things and develop themselves, and that idea has really weakened across the economy.”
Thomas Roulet: “We now have this intermediary who can concentrate a lot of power because they have information about the customer, the market, the suppliers, and they bring the demand and the supply together and take a cut out of it. In the UK where we have zero-hours contracts we already had the casualisation of work, but in France the gig economy is creating a lot of casualisation that wasn’t there before.”
The gig economy and consumer trust
Chris Coleridge: “Where the platform owners are adding value is that they’re dealing with the issue of trust: how does the consumer trust that a very random person plugged into the platform will deliver the service to a basic standard? The platforms are adding some kind of uniformity and some kind of trust.”
Belinda Bell: “We’ll see increasingly whether or not the trust lasts through data security breaches which are an inevitable development on the horizon.”
The role of government
Michael Kitson: “What would government policies regarding the gig economy look like? How are we going to regulate this sector in a way that it remains competitive? Should we break some of these big platforms up?”
Chris Coleridge: “Competition is already doing that to some extent, as Uber has competitors in many of the markets it operates in. Perhaps government could force platforms to provide portability to workers: portability of the proof of work, the proof of reliability, the proof of good reviews. That might be a way the government could help lubricate the situation for drivers without upsetting the stability of the platform itself.”
Belinda Bell: “What about sick and holiday pay, and what do training and development look like in the gig economy? We’ll all have long careers, so it’s important to have these discussions now.”
Thomas Roulet: “There have been mixed research findings on whether gig working is good for mental health. Being self-employed provides a feeling of freedom and drives up motivation, but zero-hour contracts take a toll on people in terms of their relationships and a lack of sleep. So it’s important to focus on the conditions of workers.”
Chris Coleridge: “It’s painful to watch neo-Dickensian conditions emerge in the economy again, but these platforms do bring increased fluidity in terms of people being able to determine their destiny in even a small way. We see around the world that this is one way of people getting out of poverty, as they seize even small trickles of opportunity and make something out of it.”