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Gig economy must share rewards as well as risks with workers

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Jai Vipra is a technology policy researcher focusing on the economics of digital platforms in the Global South.

Among the masses of the newly unemployed in Asia, thanks to COVID-19’s economic damage, are millions of workers in the gig economy: people on precarious contracts with digital platforms like Uber, Gojek or Deliveroo.

When times were good, digital platform startups were able to raise capital because they could grow fast, rapidly hiring gig workers with the promise of fast cash. That dream did not last long, and as these companies continued to grow and raise investments, gig workers’ conditions deteriorated. Now that times are bad, gig workers have been left with nowhere to go; a few charitable funds for employee welfare are the extent of the protection they enjoy.

Meanwhile, gig workers who did not lose their jobs put themselves at risk of contracting coronavirus to deliver food and medicine to locked-down residents.

Gig workers’ misery has called into question the business models of digital platforms. If their workers have had to bear economic risk, why should they not be participants in economic prosperity? The questions COVID-19 has prompted are going to loom large over the digital era of capitalism.

The pandemic was yet another illustration of how the gig economy has failed to live up to its promise of empowering workers. For those who lost work, there was no specific government assistance in most Asian countries because they are not classified as workers but independent contractors.

At the advent of the “sharing economy” around a decade ago, companies assured workers that as independent contractors with digital platforms, they would have more flexible work hours and higher earnings. They also told workers that they could convert their existing assets, such as cars, into productive assets, for example by driving them for a cab service and earning some extra cash.

The reality in both developed and developing Asian countries is that gig workers have to work very long hours to make a living. Worse, many gig workers took out loans to finance these productive assets. When their earnings failed to live up to promised levels, they struggled to pay them back.

Unlike in the West, in some Asian countries gig workers do not even own these assets — they work through traditional contractors who own, for example, a fleet of taxis. These contractors take a cut of workers’ meager earnings. They end up having neither flexibility nor security.

Gig workers ought to be paid much better when the economy normalizes, but that should be just the beginning. They need to be covered by basic labor protections like unionized workforces and by specific protections, like the right to algorithmic transparency and fairness.

Many drivers complain that taxi apps skew algorithms to cap their earnings. Food delivery workers play a guessing game on what makes their ratings go up — sometimes ratings are even tied to how quickly customers review services after delivery. Workers for TripAdvisor in Indonesia have complained that new people cannot possibly compete on ratings with early adopters.

All these examples point to the need for companies to be held to a minimum standard of transparency and accountability with respect to algorithms that determine workers’ pay, benefits and working conditions. Workers deserve information about how these decisions are being made and the kinds of behavior that are rewarded or punished by algorithms.

Secondly, gig workers deserve protection against policies that promote customer welfare at their expense. Platform policies as a general rule favor customers over workers.

Zomato, a food delivery platform in India, sacrificed workers’ privacy at the altar of customer reassurance during the pandemic. It shared minute details about delivery workers with customers, including their exact body temperature.


A security guard check the temperature of Zomato delivery personel in Gurugram on Mar. 25: the company sacrificed workers’ privacy at the altar of customer reassurance.

  © Hindustan Times/Getty Images

In another example, ride-hailing apps Uber and Ola have instituted numerous safety measures for riders but few for drivers, who are also at risk from riders. Last year, their drivers in India went on strike for these measures, among other demands.

Across Asia, gig work has replaced fast-disappearing formal work. We do not need to take the pitfalls of such labor arrangements as a given: gig workers deserve labor protections extended to other workers and specific rights that are tied to digital technology. The severe blow to gig workers that the COVID-19 pandemic has caused, and the exemplary role gig workers played on the front lines, only underscore this pressing need.



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Gig Economy Digital Platforms Get Tax Reporting Rules from OECD

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Daily Tax Report: International

July 3, 2020, 9:01 AM

A new global tax reporting framework for digital platforms released by the OECD on Friday seeks to promote standardized rules for how individuals on those platforms report their revenues.

Such platforms, including peer-to-peer online marketplaces, food delivery companies and sharing economy companies like Uber Technologies Inc. and Airbnb Inc., are a rapidly growing segment of many countries’ economies, but tax authorities are finding it hard to tax them effectively. The OECD is aiming to create consistency among tax administrations’ measures and to help digital platforms avoid unnecessary reporting burdens from differing unilateral rules.

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New lucrative offers for gig & blue collar workers to fill roles, Technology News, ETtech

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Illustration: Rahul Awasthi
Illustration: Rahul Awasthi

Gig workers are back in demand, although big technology firms and offline retailers are unable to fill roles quickly since many of these workers have returned to their hometowns following the Covid-19 induced economic crisis.

Open positions for gig and blue-collar staff were at 250,000 in March, but increased to 600,000 in April and currently stand at around 500,000, according to TeamLease data.

The vacant positions that companies such as Amazon, Zomato, Swiggy and PharmEasy, as well as Future group’s BigBazaar, are seeking to fill include ones in warehouse management, packaging and delivery, and for electricians, cooks, ward-boys, operations and healthcare workers.

Interestingly, these companies are offering the gig workers three-times their previous salaries and an additional 15% incentive compared to levels before the pandemic. They have also offered flight tickets and are going ahead with virtual onboarding, experts tracking the space said.

Online grocer Grofers, for instance, has hired people from industries deeply impacted by the current crisis — manufacturing, textiles and car rentals.

“We also encouraged supply chain hiring through referrals by giving bonuses to those who are referring friends and family for work and collaborated with other platforms for their delivery fleet,” said Rohit Sharma, head of supply chain at Grofers.

The demand for workers and incentives offered, however, differ across industries, the experts said.

“These workers now have ‘virtual job fairs’ wherein they can choose multiple companies to work and onboardings are done within an hour, from the earlier 15 days at least,” said Kaushik Banerjee, vice president and business head of TeamLease.

The volume of hiring, too, has largely increased.

Further, startups such as Swiggy, Grofers, BigBasket, Urban Company and Flipkart, are now training these employees in soft skills virtually, in just one-three days, and have pushed the envelope with respect to workforce safety measures.

“Over the last two months, we have hired over 3,000 people for our supply chain operations, and plan to hire another 2,000 warehouse and delivery staff in the coming months,” said Sharma of Grofers.

Amazon India is offering close to 20,000 temporary jobs in its customer service department. The new positions are open in Hyderabad, Pune, Coimbatore, Noida, Kolkata, Jaipur, Chandigarh, Mangaluru, Indore, Bhopal and Lucknow, it said in a statement.

Background verification has also become a significant part of such onboarding and firms are doing so even if the workers are away from metro cities and are only expected to return once the situation normalizes.

“During the lockdown, we built a digital background checks service through which complete onboarding is done virtually and…in a few minutes,” said Varun Mirchandani, co-founder of background verification firm HelloVerify.

The electronic Know Your Customer forms are being undertaken through WhatsApp, emails and SMSes.

Swiggy, for instance, said its onboarding and training has gone fully digital over the last few months.

Further, onboardings are now being completed in one hour, a stark shift from the earlier process of walk-ins where the process took at least two weeks.

“We moved to 100% digital learning during the delivery partner onboarding stage by December 2019. During Covid-19, we banked on our Zero Touch Learning approach and achieved 100% of the learning interventions to be driven digitally,” a Swiggy spokesperson said.



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Tom Stimson: Gig Economy ‘Is Going to Save’ Live Events Industry

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If you thought you could make minor tweaks to your business model in the hopes of skating through the economic downturn triggered by the coronavirus outbreak around the world, think again.

The financial struggle remains severe almost four months after the pandemic reached U.S. shores and, at least in some segments of the AV and live events industry, there’s no end in sight soon, says business consultant Tom Stimson in this week’s edition of his “The Show WILL Go On” webinar series.

“The lack of consensus about how to manage the pandemic is feeding uncertainty,” said Stimson. “That’s pushing the event economy further and further on down the road. Hybrid events are going to be difficult to pull off in the current climate. It’s pushed our recovery down a few more months.

“I think Q4 is going to be pushed more into streaming events. You need to get ahead of it. These are things that affect your clients’ best interests. There’s a lot of uncertainty out there,” he said.

Streaming events “may not be as fun or sexy” as traditional live events, “but it’s what we have right now,” said Stimson. “If you want the business, you’re going to have to claim some of that space.”

“We’re no longer in a sprint trying to get to September,” he said. “We’re now in a marathon that could last another year or more.” He says business stabilization comes with a cash flow plan, minimized expenses and broadened services.

Stimson advised business leaders to “look at every single expense, including rent, and ask yourself if it’s worth it” and explore strategic partnering with other small companies to help secure larger, more lucrative assignments.

“A lot of small companies sharing the risk on a large event is a big company,” said Stimson. “It’s time to move from defense to offense. Figure out what you can make happen and get out there and make it happen.

“Let go of the constraints of your old business model,” he said. “The gig economy is going to save our industry. Your business will continue to survive and deliver valuable service to your customers without the extra burden of overhead and the obligation that goes with it.

“There’s always going to be demand for gig employees and that demand is going to explode as our economy returns,” said Stimson.

Gig Economy

How to Succeed in the Gig Economy

In the gig economy, location still matters as much as it always has, said Stimson. Depth and quality matter too, of course, so businesses need to be “credibly broad on what you do” when location matters, he said.

If you’re in the right location for a given job, said Stimson, be the best value. If you have the right resource, make it easy to move, he said. If you are the best at what you do, don’t discount your specialization, said Stimson.

Hiring freelancers on retainer, setting up project-based fees and offering incentives and bonuses will position you for success in the gig economy, said Stimson.

“The same things that motivate your employees can motivate gig workers as well,” he said. “You want freelancers who are selling their craft, not just their time. Good freelancers will share what they know with your team, but not responsible for teaching them.

“A good freelancer in the gig economy wants to be involved in prep and planning for an event and they carry their own tools and accessories. They also respect the channel and offer tiered fees as a bonus,” said Stimson.

Business leaders can attract the best freelancers with standardized pay schedules, pre-production involvement, being treated in a similar way as full-time employees, training opportunities and loyalty, he said.



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