April 10, 2018

The ‘Uberization’ of work: Labour markets are evolving, so should the systems that support them

The ‘Uberization’ of work

If, like me, you’re a reader of any sort of news media at all, then there’s a good chance you’re sick of the term “gig economy.”

That’s because, all of a sudden, it’s everywhere.

From stories on Uber doing battle with government, to industry studies showing Millennials prefer gig work because of less stress and more flexibility, to coverage of the gig economy’s growing impact in Canada, the topic of temporary work is hotter — and, in some ways, more contentious — than ever.

It’s a mistake, though, to label gig work as a new phenomenon. The very term “gig economy” is just a trendy descriptor for freelancing, after all.

What’s new is its potential scale, thanks to the internet and an explosion of digital matching platforms like Uber, Upwork, TaskRabbit and PeoplePerHour. These are essentially dating sites for work, with gig marketplaces like Upwork taking around 20 per cent per transaction.

Indeed, the gig economy is growing worldwide at a pace that would make even the most aggressive venture capitalist blush: According to the Financial Times, around 40 per cent of Europeans are now involved in gig work.

Staffing firm Intuit said last year that nearly 40 per cent of U.S. workers were also involved in the freelance economy. Randstad says the number for Canada is between 20 to 30 per cent.

Naysayers will surely point to the rise in temporary employment being spurred, at least in part, by the financial meltdown of a few years ago and related cost cutting. There are also legitimate worries about gig employees becoming a sort of “precariat” — a subclass of precarious workers, living from hand to mouth and gig to gig.

And, no doubt, there are bad companies out there who take advantage of their workers. There are stories of unreasonable demands. Low pay. Zero loyalty.

But the counter argument to the above is simple: People, on average, seem to enjoy gig work.

According to a ManpowerGroup study from late last year, 90% of those surveyed said they’d continue gig work by choice. A further 87 per cent said they’re open to gig employment in the future, while 81 per cent of gig workers said they do it by choice.

Add all this up, and it’s fair to say the gig economy isn’t going away.

If these trends continue in step with the continued automation of work, temporary jobs will almost certainly be a primary driver of new job growth in Western economies.

Which is why the most recent federal budget was something of a disappointment in this regard.

Sure, it doled out small tidbits that could be useful for gig workers. Tweaks to maternity leave rules should incentivize more mothers to take on gig work, if they so choose, while on leave. The Canada Workers Benefit was expanded to provide more money to low-income workers.

But this is at the same time the EU is proactively looking to expand protections for gig workers, such as a minimum level of unemployment benefits and maternity leave. In the U.S., independent workers are now able to write off up to 20 per cent of their business income, thanks to the new tax code.

A U.S. Senate committee is even looking at ways to help gig workers save for retirement, while some in the U.S. are pushing for a portable benefits fund to provide health insurance, paid time off and other benefits for gig workers.

Considering the implications for the economy, the Canadian government should do the same.

That’s not to say the industry doesn’t share a responsibility to protect its workers: it absolutely does. And as gig economy companies grow, there’s an opportunity to partner with providers and the fintech sector to provide benefits to gig workers at scale. We’ve seen this already, in fact, with companies like Lyft promising educational relief for its workers.

In Canada, the Urban Worker Project is a not-for-profit pushing to “give a voice” to those involved in temporary work.

But it’s not enough. Canada is already behind. We need to catch up, and not just because it’s the right thing to do. It’s also because it makes economic sense.

Jim Donnelly
is a leading data-driven content creator, communicator and marketer, serving as CATA’s Chief Media Officer (email: jdonnelly@cata.ca ) in pursuit of advancing Canada’s innovation and competitiveness rankings.

Community Comments

” People can become self-employed or small businessmen/businesswomen at the click of the mouse and transact business anywhere in the world at the time most convenient to them. Starting a business under the digital revolution seems easy. This is why the gig economy is expanding exponentially.” (Rene Ofrenio at the Daily Mail)

” Reading over your CATA op ed piece, it certainly resonates with me personally. After 20 years of being a gig worker / freelancer I have my own views on the lack of government programs that recognize the needs of independent workers and they align with yours. Of course success should not depend on the availability of government programs. One should be successful on their own – or not. And the market will
certainly let you know that in short order.

While the Internet is a critical tool, I can’t stress enough the importance of learning how to market and sell your services – in person. You have to get in front of people and discuss your services and their needs. I can’t count the number of times I’ve been in conversations and discovered that the individual across from me had an entirely different need than the one I presumed them to have. In those situations, I turned on a dime and revised my services to fit the need, sometimes successfully, sometimes not.

One of the most daunting aspects of being a gig worker is the isolation. You are on your own and that can be a very sobering if not disturbing fact. It is you and only you that will move the yard sticks of your endeavor. You have to find the work, do the work, invoice for the work and collect your receivables; none of those are trivial. Gig
work in the short term can be a refreshing change from working inside an organization within the parameters of a specific job description. To contemplate a multi year career based on gig work is quite a different prospect. It certainly can be done but should be approached strategically and with much care. Wouldn’t it be a refreshing and welcome change, for those people who choose to do so, that there might be some support mechanisms in place to increase the chances of success.” (Shaun Markey, of Shaun Markey Communications Inc.)

“Good summary, I agree with the need to introduce protection for people in the gig economy and encourage them to make retirement savings (which can be more difficult to think of when you’re doing such ‘in the moment’ work).” (Tina Barton, Community Foundations of Canada)

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