The rise of the online gig: How can policy and the labour market adapt to modern gig work?

The rise of online platforms and apps means the nature of work is changing for many. Although the majority of workers in the UK are traditional employees, increasing numbers are turning to the gig economy, using widely accessible technology to reduce search frictions and connect workers with clients. Uber and Deliveroo are now household names, but the gig economy goes beyond transport and delivery services alone; performers, programmers, plumbers and proofreaders can all be found on the array of specialist platforms. Such arrangements offer flexibility to both firms and workers: workers can choose when and where to work, while firms can adapt their labour force to changing business needs. At the same time the instability of irregular employment can jeopardise workers’ ability to save, build a pension and cope with income shocks. Workers are not entitled to holiday pay or sick pay and can often work alone for extended periods of time. The UK government also faces lower tax revenue as a result of increased self-employment and firms lack incentives to invest in and train their workforce.

Is the gig economy a recent fad, or does it represent the future of work for many? Do the benefits outweigh the costs for workers, firms and government? Can the situation be improved for all parties? Does the gig economy feed inequality or does it help reduce it? Are the young more or less vulnerable to the gig economy than others? Can a country solve these problems alone or does it require wider cooperation? Do solutions lie in policy, technology or elsewhere?

Good Work: The Taylor Review of Modern Working Practices,  (2017)

HM Government, The experiences of individuals in the gig economy (2018)

Adam, Miller and Pope (IFS), The IFS Green Budget: Tax, legal form and the gig economy (2017)

Eichhorst, Hinte, Rinne and Tobsche (IZA), How big is the gig?: Assessing the Preliminary Evidence on the Effects of Digitalization on the Labour Market

Gig Working” by Abhijit Bhaduri is licensed under CC BY 2.0

In cooperation with the Department of Economics at the University of Bristol

Author of the topic: Dr. Annika Johnson