The gig economy in the US has reached its peak – at least that's according to JP Morgan's latest research.
Some are suggesting recent legal action could sound the death knell of the UK gig economy – but in my view, these concerns are misplaced and underestimate the demand for innovative, tech-enabled services.
But these tech firms (among others) have proved that consumers want these innovations and many individuals engaged in the gig economy do want more flexible, no-ties working arrangements. This level of demand on both sides means that our gig economy will not only survive, but thrive.
The problem for Uber was its micro-management of drivers on matters ranging from performance ratings to pricing and payment collection. Perhaps understandably, it wanted to maintain as much control as possible over the quality of the service and its brand reputation. However, this meant that the drivers worked for Uber, not the other way around.
I think it is possible however, for a gig economy business to act as a genuine match-maker between consumers and independent business owners, but still insist on some minimum standards.
For example, if a company launched an app which put passengers in touch with executive limousine chauffeurs, it would surely be allowed to check that the driver’s vehicle met the right specifications. And if passengers complained that they did not get what they asked for, that business should be able to terminate the driver’s access to the app. Aside from this, if the drivers were largely left alone to run their own businesses, it seems unlikely that they would have worker status.
Control at a price
The issue boils down to this – whoever wants control over the work must accept that this comes at a price.
Individuals who want to move from gig to gig strictly on their own terms must forego workers’ rights such as the national minimum wage and holiday pay. They can take advantage of tech platforms to increase their pool of potential customers, but they should do so on the basis that no-one else is responsible for them.
Equally, gig economy businesses that curtail the freedom of individual users to do the work in their own way will probably need to accept that this will bring the associated costs and legal risk of maintaining a bank of workers.
There is no reason why gig economy business models cannot succeed. However, a person wanting to work in the gig economy can only use the apps and tech platforms that are available. It is the market disruptors creating such platforms who have the final say in setting up their businesses in the way that best suits their commercial priorities.