Gig economy: What is it? Who works in it? Why is it in the news?

What is the gig economy?

Strictly speaking it’s any economic activity that involves the use of temporary or freelance workers. However, it’s become synonymous with digital service platforms that connect consumers with various businesses.

Think of an Uber driver or a Deliveroo cyclist. Each piece of work is akin to an individual “gig”, hence the name. Gig workers tend not to be employed directly by companies and work instead as independent contractors.

While this gives them greater flexibility, they don’t get the benefits that permanent employees enjoy, such as holiday pay or sick pay, and can be left high and dry when work isn’t available.

Over the past 20 years, there’s been a gradual shift away from stable, permanent work and a rise in temporary or contingent work.

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This trend is driven by globalisation, which has increased competition in the workplace and liberalised markets; and by digitalisation, which is providing new ways to work and new business models.

How many people in the Republic work in it?

This is hard to gauge, but studies suggest about 200,000 workers here are in temporary or contingent employment arrangements. This equates to 8 or 9 per cent of the workforce.

However, Seamus McGuinness of the Economic and Social Research Institute (ESRI) says while most gig jobs tend to be temporary, not all temporary jobs are gig jobs. Gig workers are likely to make up a relatively small share of temporary workers.

“For instance, individuals in service and sales occupations, where we expect many gig workers to be located, make up only 25 per cent of all temporary (non-student) employment,” he says.

Is it a good thing or a bad thing?

That’s a difficult question as it covers a multitude of work arrangements, some good and rewarding, others precarious and badly paid. Some gig economy workers are what you might call micro-entrepreneurs running their own businesses.

Many are well-paid professionals for whom it makes more sense to work flexibly. But that’s a world away from someone on a zero-hours contract, employed to clean a hospital or deliver takeaways.

These workers typically find themselves on rolling, fixed-term contracts with little or no control of their work arrangements.

They often end up working similar hours to permanent employees but with zero job security and zero benefits. Getting enough work to provide a stable income from gigs alone isn’t always easy either, and many workers have low incomes as a result.

Why is the gig economy in the news?

The potentially hazardous working conditions of gig economy workers was highlighted this week by the tragic death of Deliveroo cyclist Thiago Cortes.

Cortes (28), originally from Brazil, was killed in a hit-and-run incident while out working in Dublin on Monday night. Advocacy groups claim the food delivery sector here, which employs mainly students and migrants, is poorly regulated.

So what about the rights of these workers?

This is a very contentious area. Categorising workers as independent contractors or “riders” has enabled some gig economy companies to avoid paying employee payroll taxes, while leaving workers without vital benefits and protections. There are legal ramifications to calling your staff “employees”.

The employment status of gig workers in companies such as Uber and Deliveroo has been the subject of legal cases in several countries. Workers are fighting for their status to be changed so they are afforded minimum wage entitlements and other protections.

Earlier this year, the Irish High Court rejected an appeal by a company in the Domino's Pizza franchise against a finding by Revenue that their delivery drivers should be classified PAYE workers. It was the first major judgment in this jurisdiction on the gig economy.

However, the line between “employee” and “worker” remains blurred and there has been no major policy initiative in the area. Deliveroo has been calling on the Government to amend legislation covering self-employed workers to allow the company offer them benefits without making them employees.

It insists its workers do not fall under new EU rules designed to give gig workers greater protections.

The company has launched a free insurance package for its delivery agents, or riders, in Ireland, covering personal injuries as well loss of income while incapacitated.

What else?

Food delivery platform Just Eat has vowed to stop using gig workers in Europe, with its chief executive Jitse Groen saying he wants to employ people who get benefits and have workplace security.

Mr Groen, who founded Takeaway. com in Holland in 2000, said the coronavirus pandemic had made him more considerate of the difficulties that gig workers face.