The media cannot resist talking about the gig economy. The eyes of journalists must have lit up when they saw that on the same day the government published its response to the Taylor Review, it also published a report into the experience of people working in the so-called ‘gig economy’.
But the evidence from this report, titled The characteristics of those in the Gig Economy, did not fit the usual media narrative of people suffering and being exploited by larger companies.
Instead the survey, conducted by the Department for Business and the Institute for Employment Studies, paints a much more positive picture. It highlights how people are enjoying the flexibility of self-employment and using it as a way of topping up their main income.
What is the gig economy and who works in it?
According to this study, what defines the gig economy is the ‘exchange of labour for money… via digital platforms’. In particular, it is platforms which allow people to post jobs or find work on a short-term basis and usually on a payby- task basis.
App-based platforms like Uber and Deliveroo would fall within this sector, as would websites such as PeoplePerHour and Task-Rabbit. Excluded from this definition are platforms that facilitate the provision of goods rather than services, such as eBay and Etsy.
Despite its prominence in the national media, the gig economy is still a relatively minor part of our labour market. Just 4.4 per cent of the UK population has worked in this way in the last twelve months. And the majority were using it to supplement their main source of income.
It is disproportionally popular among younger people, with over half of those involved (56%) aged 18-34. The study also found the levels of educational attainment were similar between the general population and those involved in the gig economy.
How much time do they spend and what do they earn?
Individuals are generally working on a fairly regular basis in the gig economy, but not on a full-time basis. Over half (55%) worked at least once a month, while only nine per cent were working in the gig economy daily.
This is reflected by the fact that only eight per cent see the money they earn in the gig economy as their main source of income. Two thirds also earned less than five per cent of their total income from the gig economy in the previous twelve months.
The earnings picture is incredibly mixed, and unsurprisingly depends on what type of gig work is being undertaken. The majority of those involved in food delivery services (55%) earn less than £8.44 an hour, while couriers earn significantly more – with 31 per cent earning between £8.45-£12.99 an hour and a fifth earning between £13-£20 an hour.
How happy are they?
The answer is “relatively”. More than half of those involved in the gig economy are either very or fairly satisfied with their experience of providing services through websites and apps. Independence and flexibility are the key reasons cited for this satisfaction. Looking to the future, 41 per cent said they are going to continue in this type of work while 39 per cent said they will not.
What approach should the government take?
Policymakers are right to want to tackle exploitation wherever they find it. But the evidence shows that this is not actually a particularly big problem in the gig economy. People are generally happy with this way of working, particularly because it affords them independence and flexibility.
When they are considering the best legislation to deliver in response to the Taylor Review of Modern Working Practices, the government would be wise to take extreme caution. If nothing else, the report by the Department of Business and the Institute for Employment Studies showed just how complex and nuanced the gig economy is. Any government legislation on this area must reflect this complexity or risk doing serious damage to legitimately self-employed people. The government should be particularly careful about any measures that could push people out of self-employment and towards ‘worker’ employment status.
Of course, this doesn’t mean they should ignore the challenges people in vulnerable work in the gig economy face. But to get the balance right and give people in vulnerable work the support and protection they need, the government should focus not on shifts in employment status, but opening up training options. As IPSE research has shown, improving access to training is one of the most effective and direct ways to improve conditions for people in vulnerable work, empowering them to improve their circumstances.
Across the gig economy, people generally do not want shifts and an employer telling them what to do. The government’s report shows that by and large, people in the gig economy actually want flexibility and freedom. We must defend their right to this, as well as the many other benefits our flexible economy delivers for worker and consumer alike.
By Jordan Marshall