Why we shouldn’t talk about the gig economy
Blog post by Dr Christina J. Colclough, Founder of The Why Not Lab. Published 14 September 2024
When we say “the gig economy” or any variation hereof, we are implicitly saying that another economy exists that is somehow different from the gig one. This division is false. It is leading to a fragmentation of workers’ rights and regulatory responses that risk locking this division firmly in place at the detriment of the rights of all workers.
The gig economy goes by several names, including the platform economy and the collaborative economy. The terms cover work that is controlled, distributed and managed by digital platforms and algorithms. The work can be done remotely or locally. Most workers are hired as independent contractors.
But why do we speak of this kind of labour as belonging to a particular economy? We don’t speak of the agricultural economy, the construction economy, the temporary agency workers’ economy, nor of any other sector characterised by seasonal, temporary, or other forms of precarious work as an economy.
The political consequences
Work that is controlled, distributed and managed via a digital platform is occurring in many sectors ranging from graphical design, to click work, to delivery riders, domestic workers, baby sitting and much more. Many of the platform owners claim they are not employers: they are merely offering a digital service that matches the demand for a particular kind of labour, with the supply of said labour.
By avoiding the employer status and the costs and obligations that go with that, digital platforms are driving down labour costs in many countries leading to the potential of a hollowing out of quality jobs.
Responding to this new way of distributing work, the co-legislators in the European Union after a long battle reached a provisional agreement on the Platform Work Directive (PWD) in 2024. The directive introduces two key improvements:
it helps determine the correct employment status of people working for digital platforms by introducing an effective, rebuttable legal presumption. Here it is legally presumed that a person performing platform work is in an employment relationship when facts indicating control and direction are found
it establishes the first EU rules on the use of algorithmic systems in the workplace. This chapter introduces stringent transparency requirements, it puts limits in place concerning data collection and processing in monitoring and decision-making, it puts ‘due process’ safeguards in pacing giving workers the right to obtain justifications, request human review and challenge or rectify those decisions which infringe on their rights. And importantly it stipulates that automated systems will have to be overseen closely by platforms’ employees—with the involvement of worker representatives—to avoid discrimination and occupational hazards.
Whilst the above is a far cry from the Commission’s original proposal, it does offer affected workers some sound and much needed rights. In effect, though, the PWD has given more rights in relation to algorithmic management to workers in this part of the economy than all other workers.
The European Trade Union Confederation (ETUC)
The EU AI Act was proposed by the Commission in April 2021. The PWD was proposed in December 2021. A year later in December 2022, the ETUC adopted an official resolution calling for an EU Directive on Algorithmic Systems at Work. Rumours would have it that the 2019-2024 EU Commissioner for Jobs and Social Rights Nicolas Schmit has been open for the idea of such a Directive, but nothing has happened. Instead, the PWD has made it’s slow way through the EU system, watered ever so much down relative to the EU’s draft proposal.
Given the political climate in Europe, this begs the question whether the ETUC’s strategy for an AI At Work directive will ever materialise?
So why did a directive for platform workers make it through the legislative system during the same period as the EU AI Act, but not the idea of an AI at Work Directive? Did it seem easier to get the sceptical parliamentarians and member states onboard when it was only a subsection of the economy that was directly impacted?
Given the political climate in Europe, this begs the question whether the ETUC’s strategy for an AI At Work directive will ever materialise? Even if the Commission did propose an ‘AI At Work’ Directive, we can only expect that it will be watered down significantly by the Council and the Parliament. It almost certainly wouldn’t be improved. Given that the PWD now exists, and should an AI at Work Directive never materialise, we risk ending in a situation where workers will be afforded different rights depending on how they earn their living.
The International Labour Organisation (ILO)
The ILO is currently in the process of working towards an instrument for decent work in the platform economy to be tabled in 2025. The “Realizing decent work in the platform economy” report sets out the aim to establish “a clear framework for addressing new and specific challenges to decent work in the platform economy, particularly in relation to the use of technologies impacting on working conditions.” It further, and rightly, adds:
“Nevertheless, work on digital platforms also poses new challenges, particularly due to the use of algorithms to organize, supervise or evaluate work. These challenges relate to different dimensions of decent work, including the employment status of the workers, their remuneration and working time, their access to social security and occupational safety and health, their representation and access to social dialogue and the termination/deactivation and access to dispute resolution mechanisms. This includes the lack of access by workers and their representatives to information concerning how algorithms affect their working conditions, and in this respect, the extent to which the use of algorithms results in fair outcomes.” (page 103, paragraph 290).
Shouldn’t the ILO have been bolder and worked towards a standard that covers all workers?
Again, the fact is that whilst some of these challenges are specific to those who find work via digital platforms, many are not. Workers across all sectors in the economy are increasingly subject to algorithmic management. Shouldn’t the ILO have been bolder and worked towards a standard that covers all workers? Maybe it could have been called: Realizing decent work in digitalised workplaces?
The Platform Work Directive and the proposed ILO standard directly mention “the platform economy” in their texts. Thereby they implicitly set in stone that there is an economy that is different than, and separate from, what can only be perceived as the remaining economy. Both instruments will afford valuable and important rights to a certain group of workers, but not all. But will this fragmentation of rights lead to an acceptance that workers have a different status depending on how and under which contractual relations they earn a living? If so, this seems at odds with the historical quest of the union movement to ensure decent work for all workers.
Whilst the ETUC in Europe did table their demands for an AI at Work directive, albeit slightly delayed relative to the PWD and EU AI Act, the PWD beat them to the legislative table. It seems like a missed opportunity that the ILO hasn’t picked up on the experiences in Europe and the inherent risk of rights fragmentation. They had, at least in principal, the opportunity to propose a standard for realizing decent work in digitalised workplaces, and not only in the platform economy.
The alternative(s)
Progressive forces must work together to prevent this fragmentation of workers’ rights. Work is work. No matter how it is conducted and under which contractual form, all workers should benefit from the same social and fundamental rights.
We should all stop speaking of ‘the gig economy’ or any of its’ alternatives and realise that the digital technologies used by platforms are being deployed across all sectors in the economy under the guise of algorithmic management.
Drawing inspiration from the rebuttal presumption in the PWD, maybe we all should turn things upside down, prevent the rise in precarious work and the downward pressure on wages and working conditions, and revamp our social services and labour market regulation by saying all workers regardless of contract or form of work have the same social and fundamental rights. This, in turn, would imply that digital platforms are legally perceived as employers, and should contribute via taxes and social costs to the societies in which they are embedded and on which they depend. In other words, all economic actors will be competing on the same terms.
Following up on the two points above, maybe the ILO could expand the scope of their instrument to include challenges to decent work that arise out of the adoption of platform technologies and algorithmic management systems in all work settings?
In conclusion, whilst it can be argued that improving the rights for some workers is better than improving them for none, ‘some’ is also opening the door for a further fragmentation of the labour force, which in the end of the day most likely will have a negative impact on all workers.