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Opinion: Legislation should help rather than hinder the gig economy

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Peter St. Onge, senior economist at the Montreal Economic Institute, and Daniel Dufort, senior director of external relations at MEI

Now that British Columbians can finally hail a ride-share on their phone – a right Quebeckers only won last year – a new threat is emerging, this time from California.

Casual or “gig” work has been around a very long time, but the sharing economy has put freelancers in the spotlight. It’s especially important for workers who can only work part-time: single parents, college students, the elderly and seasonal workers. These groups have long counted on the ability to work flexible hours when they really need to, be they waiters, nannies, deliverymen or translators.

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What has changed is the dramatic creation of new part-time jobs thanks to the internet and cellphone apps. These have expanded the range of services people are willing to hire for, and made it much easier both to work and to hire people for casual work. The sharing economy has created more than 60,000 Canadian jobs a year on average between 2005 and 2016. This has been fantastic for consumers, who can now easily hire someone to deliver the groceries, shovel the driveway, walk the dog, mow the lawn or walk them to their car safely at night. And, of course, now you can call a cab that actually comes on time.

So far, labour laws have helped by sheltering casual workers from the hassle of paperwork, and employers from the risks inherent in hiring permanent employees. Unfortunately, regulators are becoming hostile to this new job creation. California Assembly Bill 5 (AB 5), which took effect on Jan. 1, effectively turns freelancers into employees. The goal was to improve conditions for gig workers, but, in practice, it has meant the disappearance of their jobs. Mass layoffs of part-time and full-time freelance workers have occurred in the media and the film industry, with fears of more to come.

The experience of California illustrates why governments should avoid interfering in the sharing economy. Despite good intentions, forcing employers to provide benefits to contract workers risks pricing low-wage workers out of employment altogether. Studies have also shown that even when the company is paying for the benefits, the costs get directly passed along to the employees. So even workers who don’t lose their jobs end up paying for the mandated benefits through reduced wages.

Empirically, job losses from mandatory benefits disproportionately target low-income workers. A similar phenomenon occurred in Ontario where an Montreal Economic Institute study estimated that 50,000 young workers lost their job in the wake of a hike in the minimum wage from $11.49 to $14 on Jan. 1, 2018.

Losing one’s job not only hurts the worker today, but can negatively affect future job prospects. One study found that the simple fact of having a part-time job reduces the odds of being unemployed a year later by more than 80 per cent – from 25 per cent for unemployed workers to just 4 per cent for part-time workers. Working part-time also considerably increases the chances of having the work situation you prefer a year later, whether full-time or part-time, from 41 per cent for those unemployed to 69 per cent for part-time workers. In other words, a great way to get the job you want is to work any job right now.

Flexibility is key to the sharing economy: to work, to hire, to buy and sell. Even those who do it for the money may only be able to work part-time because of school, or are semi-retired workers who prefer only working a few hours each week. Statistics Canada estimates that only one in four part-time workers (24 per cent) are led to work part-time for economic reasons. Nearly half (48 per cent) have to care for children or other family members, have a disability, or are going to school, while 28 per cent have voluntarily chosen to work part-time. A poll conducted in the United States in August, 2018, showed that only 7 per cent of American contract workers would rather be considered as full employees.

The Canadian economy is already one of great upward mobility. A 2012 study of census data found that 83 per cent of Canadians in the bottom 20 per cent of income earners in 1990 had moved up to a higher income category 10 years later. In 2009, the percentage of those who had risen into a higher bracket was 87 per cent, with 40 per cent having even reached the two highest quintiles. However, temporary jobs at the bottom of the ladder are often a prerequisite for this phenomenon to endure.

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Too often, lawmakers propose reforms that might sound good, but actually make the problem worse. Instead of making it harder to hire freelancers and part-time workers, lawmakers should be making it easier. The freedom to contract and work as one pleases is not only a fundamental right, it is among the most effective ways to help marginal workers who need that first rung on the ladder.

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Gig Economy Helps India’s Women Workers Gain Financial Independence

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women in uber swiggy and heydeedee(Left to right) Hey Deedee’s Nasima Shaikh, Swiggy’s Priyanka Thorat and Uber’s Harpreet Kaur have found newer opportunites in the gig economy
Image: Aditi Tailang

For nine years 34-year-old Seetha Laxmi, a single mother of two, had a routine: Head to Mumbai’s Borivali railway station during peak commuting hours, jostle her way into packed trains carrying a big basket full of imitation jewellery—earrings, anklets, bracelets—and try and sell it, making about ₹300 a day.

After her husband abandoned her, Laxmi had turned to hawking on trains to make ends meet. She started her day early, worked for three to four hours before taking a break to return home and check on her children—then a year-and-a-half and four—and then went back to selling her wares on the Matunga-Borivali route.

Last year in January, she heard of Hey Deedee, India’s first all-women last-mile delivery service for ecommerce, retail and other businesses. Fed up of avoiding the police and switching compartments to win over that elusive buyer, Laxmi decided to grab the opportunity at Hey Deedee.

She had always wanted to learn to drive and this was an ideal platform to do that as well as earn a living. “When I was a train hawker, nobody knew me. But once I joined Hey Deedee, I got my own identity. That feels good,” says Laxmi, a resident of Sion.

“A lot of things changed in my life after joining here as a delivery associate. I learnt many new things. I even picked up some English and try to use it in my day-to-day life,” adds Laxmi, who starts her day at 5 am, completes her household chores, gets her son (the other lives in a hostel) ready for school before heading to work. “I earn about ₹18,000 a month. I’m now saving after a long time as I plan to buy a two-wheeler. At times I also support my parents financially,” she says.

Founded by Revathi Roy in 2016, Hey Deedee operates in 15 cities, including Mumbai, Pune, Bengaluru and Nagpur, with clients such as Nature’s Basket, Amazon and Flipkart, among others. Women who join the platform undergo a 45-day training programme where they are taught to drive a car and a two-wheeler. They are also instructed on how to get a licence and trained in self-defence. Once on the road after the formal training, they deliver 30-50 parcels a day. Hey Deedee employs over 1,000 women in 15 cities.

Nasima Shaikh, 30, a housewife, is another woman who was economically empowered after she joined Hey Deedee. “My husband is an auto driver and I decided to start working too to ensure my three children get a better education,” says Shaikh adding that since she learnt to drive and became a delivery associate, she has become more confident of herself.

“A woman or man is empowered only when they are in a position to earn their own money and spend. Unless this happens, our society cannot progress,” says Roy, who was on Forbes India’s W-Power list in 2017. 

For the longest time, people in blue-collar jobs remained faceless and nameless, with few options to pursue their aspirations. However, an emerging gig economy and the increasing participation of women in it provide a glimmer of hope.

According to the Employment Outlook Report by recruitment platform TeamLease, the gig economy is expected to generate more jobs in the future. It projects that the gig economy will have half of the urban workforce by 2025 and 80 percent by 2030. In 2019 alone, women gig workers accounted for about 68,000 jobs in India. Priyanka Thorat was one of them.

The 24-year-old has become a celebrity of sorts, acceding to selfie requests when she delivers food to customers. In 2018, online food ordering and delivery platform Swiggy signed up five delivery women, including Thorat, for the first time. Initially, she found reading maps and locating restaurants difficult. But now navigation has become a breeze after she learnt how to read maps with assistance from the company. “People appreciate me. I’m treated with double respect which I never got when I used to work as a domestic help,” says Thorat, whose parents passed away after she entered her teens. Since then, the resident of Worli’s BDD chawl in Mumbai has been single-handedly taking care of her three siblings.

Swiggy provides certain options for its women delivery executives. “They are free to log in at any hour and we encourage them to end their shift before 6 pm. There is also a policy where they operate in areas that are identified as safe zones. Also, as a precautionary measure, they are all provided with a pepper spray during their onboarding process,” says a Swiggy spokesperson.

Founded in 2014, Swiggy has more than 1,550 women delivery partners across 22 cities, including Mumbai, Pune, Bengaluru, Nagpur, Hyderabad, Chennai, Kochi and Kolkata.

Apart from becoming financially independent, women in the gig economy will also steer the country’s economic growth. The McKinsey Global Institute said India’s GDP could rise by $0.7 trillion if the workforce participation rate of women increases by 10 percentage points by 2025.

However, it’s easier said than done. Women in the country still battle stereotypes. Access to education and employment is a privilege for many. And convincing in-laws to allow them to work after marriage remains a major hurdle. Startups like Curryful are working to break such barriers by enabling housewives to make money by preparing meals from the comfort of their homes. Founded in 2018 by Ben Mathew, Rakesh Sasidharan and Roshni Joseph, it is a home-food marketplace that delivers homemade meals to customers. All the meals are freshly prepared and delivered in 40 minutes. “Our idea was born out of strategy as well as from our personal obsession to change the economic participation of women in society. Through research, and through opportunities we saw in our past roles, we arrived at the Curryful business model where we wanted to build a shared-economy and mobile-internet-based food service powered by women entrepreneurs,” says Sasidharan.

curryful chefAnuja Shah is able to make ₹6,000 a month by being a home chef on Curryful
Image: Mexy Xavier

Anuja Shah, 40, a chef at Curryful, had to discontinue her job as a lecturer at SNDT Women’s University  in Mumbai due to domestic responsibilities. She was always passionate about cooking and Curryful gave her the opportunity to exercise her culinary skills. Women like her have turned their homes into cloud kitchens and their food is in demand among the millennial workforce.

Curryful has its home chefs listed on Zomato and Swiggy. “My specialty is Gujarati dishes. I keep experimenting and adding new dishes to my menu once Curryful approves them. The price ranges from ₹80-120 per dish and I manage to cater to 10-12 orders per day. I’m only preparing lunch as of now… if I start doing dinner, my income will be higher,” says Shah, who earns ₹6,000 a month. “My family is extremely supportive. In fact, there are times when my husband helps me with the packing of the food.” 

Operating out of South Mumbai, Curryful has over 50 chefs and plans to expand to 25 cities and partner with 250,000 women entrepreneurs over the next three years.

According to BetterPlace, a platform for blue-collar workers, the gig economy accounts for more than 1.4 million jobs in India. Most of these include drivers, delivery associates, beauticians, maintenance workers and so on. However, TeamLease points out that there’s an 8-10 percent salary difference between male and female delivery executives; women are paid less for the same jobs.

Pravin Agarwala, co-founder and CEO of BetterPlace, disagrees. “I don’t think so. It’s completely driven by demand and performance. On the contrary, the supply is less and hence they [women] can ask for more [money],” he says. Roy of Hey Deedee concurs. “There is no pay disparity. In fact women are more diligent compared to men. They don’t waste their time after work… their focus is on going back home to their kids. Although the attrition rate is high, we are doing our best to retain employees by offering good incentives and insurance.”

It will soon be a common sight to see a woman behind the wheel while booking a cab as online ride-sharing companies have also started onboarding more women. Harpreet Kaur, 45, for instance, is a registered driver on Uber. “I joined Uber India four years ago. Since the age of 13, I was passionate about driving cars… my father was a driver and I was inspired by him. I learnt driving at a young age. But I cannot tolerate Mumbai’s traffic and so, I prefer doing night duty when the roads are empty and I can do more trips,” says Kaur, who quit studies after class 10 and now earns more than ₹60,000 a month.

swiggy partner and dance teacherSwiggy delivery partner Laxmi Prajapati is also able to continue teaching and learning dance
Image: Aditi Tailang

“A lot of people said this job is not meant for girls, it’s not safe. I listen to everyone, but do what I feel is right. I’m doing something I’m passionate about and where I have the freedom to work whenever I want. There is no boss breathing down my neck and no pressure. When your family members are supportive, things become easy. Everyone in my family has been supportive as a result of which I feel powerful,” says Kaur, who lives in Chembur in Mumbai. She is the sole breadwinner of the family currently as her husband lost his job. She bought a new SUV recently on a monthly installment basis and mostly does airport pickups at night. “Customers are happy when they see a female driver. During night time, women are relieved to find a woman driver,” says Kaur.

“Through various initiatives and programmes, we aim to onboard more women and gender-diverse partners by devising a value proposition that offers earnings, safety and a support experience to them. We would like to continue onboarding more women driver partners so that they can make a mark in the industry of mobility and earn a sustainable livelihood,” says an Uber India spokesperson. He, however, refused to divulge the number of women the company has employed.  

It’s not just all work and no play. Companies also give women a chance to pursue their hobbies on the side. Recently Swiggy started a campaign called ‘Swiggy Starhunt’ in which the company encouraged its delivery partners to showcase their talent on video-sharing app TikTok.

Laxmi Prajapati, 36, a Mumbai-based delivery partner with Swiggy since the past year, was enthused when she learnt about this. A dance instructor in the morning and delivery executive by afternoon, she never misses an opportunity to make a TikTok video while she is waiting at a restaurant for an order. “I love to dance… all my stress goes away. With Swiggy I’m able to pursue my passion. I teach dance in the morning and learn in the evening. There are no restrictions with Swiggy… there are days when I get orders for choreographing a wedding sangeet. I don’t have to worry about losing my job… I just go offline for the day and take up sangeet orders,” says Prajapati, who got married at 16 and has three children (a daughter and two sons). “I’m able to earn money and pursue my passion because of my family’s support. My 17-year-old daughter helps me with household work and my youngest son, who is in class 3, is also quite self-reliant. I feel blessed. I never imagined I’d get so much recognition and respect. At times when I deliver orders, people say things like, ‘We’re glad you delivered this, more power to you’,” says Prajapati, a resident of Malad. “In the future, I want to ensure my children get the best education and all the facilities that I did not get in my life. We live in a small house now and I want to buy a bigger one. Recently I bought a two-wheeler on EMI and put my children in a better school. Everything will be alright soon.”

(This story appears in the 13 March, 2020 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)

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Growth of the gig economy | New Straits Times

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IN October last year, Prime Minister Tun Dr Mahathir Mohamad said the gig economy had been identified as a new source of economic growth and would be made part of the 12th Malaysia Plan.

The word “gig” used to be associated with musicians or performing artistes hired to play for specific events or short-term engagements. But this buzzword has trickled its way to almost any kind of employment, particularly on an ad hoc or temporary basis.

It concerns mainly freelancers, project-based workers, independent contractors as well as part-time hires. They are all part of a growing trend called the gig economy.

According to financial planning lecturer Associate Professor Dr Mohamad Fazli Sabri, people have been doing “gigs” for decades.

Mohamad Fazli, who is Universiti Putra Malaysia’s Faculty of Human Ecology deputy dean (Graduate Studies and Industry and Community Network) said: “Working part-time and freelancing have been around for ages. These jobs are becoming more pronounced due to the rise of digital platforms such as smartphones and the Internet.

“Technological advancements have paved the way for those who are interested in offering services through websites or mobile apps,” he said, adding that it is more popular among young people.

“There has been much debate on what comprises a gig economy and how it is different from freelancing. To put it simply, both terms are synonymous. It can also be referred to as a sharing or collaborative economy.

“While we are familiar with food delivery services, professionals are now starting to offer services like legal consultation, journalism and copywriting, among others, under what classifies as gig economy.”

Mohamad Fazli said the gig economy has benefited consumers as they are provided with an array of options and services to choose from.

Freelancing allows individuals to work for companies anywhere in the world and not limit their talent to geographical boundaries. PIC FROM https://www.freepik.com/free-photos-vectors/man

For large organisations, it increases flexibility and efficiency while lowering the cost of doing business.

“Gig workers enjoy flexibility, lucrative pay and the freedom to choose the type of work. No wonder people are turning away from desk jobs to be a part of the gig economy,” he said.

When done right, working on gigs come with the perks of independence, peace of mind and good pay.

Mohamad Fazli said that in the United States, gig workers are expected to make up around 40 per cent of its workforce by this year.

“In Malaysia, food delivery services are flourishing. To date, there are 13,000 Foodpanda and 10,000 Grab Food riders in the Klang Valley.

“There are people who undertake side jobs on top of full-time jobs to bolster their income or even to maximise productivity,” he said.

PROVIDING OPPORTUNITIES

Freelance-hiring specialist and gig economy platform Workana allows companies to engage talented and qualified freelancers for project-based job opportunities worldwide.

The Latin company, which started in 2012 in Buenos Aires, Argentina, recently set up its Southeast Asia headquarters in Kuala Lumpur.

According to Workana co-founder Tomas O’Farrell, over 100,000 freelancers signed up on the platform since April last year.

Workana co-founder, Tomas O’Farrell

“Most talents are Malaysians, with the rest coming from across the region. We now have an excellent pool of talents comprising graphic designers, coders, writers, social media experts and marketing experts. This platform is a way of connecting companies with the talented people they are looking for, and reducing much of the friction of hiring remotely.

“Companies are also posting more jobs on our platform. Workana has over 30,000 job postings each month coming from all over the world.

“Our growth here in Malaysia is amazing. What makes it interesting is that Malaysian freelancers are now able to work for companies anywhere in the world and not limit their talent to geographical boundaries,” said O’Farrell.

He added that the workforce has changed in the last decade with Gen X and Gen Y being technology-savvy individuals who prefer to work independently.

“Experienced and professional freelancers cherish their freedom to work at their own pace and commit to projects with less supervision.

“Many companies, especially startup businesses, are looking for top talent. Employing a freelancer is an option that works for growth and return of investment (ROI).

“For example, if a company only needs a person for a limited period to complete a project, hiring a freelancer makes perfect sense.”

Technological advancements has paved the way for those who are interested in offering services which are found on websites or mobile apps.

O’Farrell added that Workana provides opportunities for its freelancers to develop their skills by inviting them to conferences and think-tank sessions.

However, he said, professional skills enhancement needs to be done on an individual basis.

“Since developing a skill is a learning process and needs time and commitment, this means freelancers who are motivated will need to enrol for courses as they deem fit.

“For example, a freelance social media expert who is also proficient in Adobe Photoshop and can use social media tools effectively will be highly sought after on the platform.

“In the end, the gig economy becomes an altogether wider topic. Given the popularity of remote working, technology advancement (emails, live chats, video calls, collaboration software) and mushrooming co-working spaces, hiring freelancers is something which is destined to become a big part of the human resources industry.

“It is definitely here to stay,” O’Farrell concluded.

PITFALLS

While the unemployed, students and fresh graduates struggling to land a first job may find the gig economy platform advantageous, there are rising concerns about worker welfare and a deteriorating safety net.

Employment issues from the gig economy are mainly on having financial security like Social Security Organisation and Employees Provident Fund savings.

Mohamad Fazli said: “Many gig workers are from the younger generation. They may not be fully aware of the importance of having Employees Provident Fund (EPF) savings which provides retirement funds and benefits.

“They must be equipped with financial literacy or else they will be financially vulnerable.

“Besides EPF, full-time workers enjoy a certain amount of security in terms of consistent pay and health benefits.

“Those who are working gigs at the low-skill level have little room for career growth and development. There are no opportunities to climb up the ladder and secure promotions.

“Gig workers with higher education backgrounds must think of ways to move towards a professional level befitting their qualifications,’’ he added.

O’Farrell explained that freelancers face common challenges such as irregular workload and getting paid on time by different clients.

“To overcome this, we have a secure way of paying freelancers. We take advance payment from the companies and work as a mediator to ensure that payment is made to the freelancers once the jobs are completed.”



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Foodora Workers Just Won The Right to Unionize And It Might Disrupt the Gig Economy’s Business Model

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Management-side lawyers are warning it could ‘erode the foundational basis of the gig economy’

February 26, 2020