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We’d better get to know the growing gig economy

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Gig workers are often perceived as having autonomy and flexibility. But their choices are constrained. (File photo: Lucian Alexe/Unsplash)

The number of people doing “gig work” has been rising for decades, and the precarity of gig workers has been underscored by the pandemic. Gig workers have been on the front lines, delivering food and products, and getting people to their destinations while putting their own lives in danger as a result. Social distancing has exacerbated particular vulnerabilities for those with limited access to benefits or job security. And while most gig workers are Canadian-born, racialized Canadians and new immigrants are over-represented in the most precarious and least well-paid gig work jobs.

Now, with many Canadians suddenly unemployed and landmark rates of business closings, how well do we understand gig work?

First and foremost, it is not new. Piecework is much older than the Industrial Revolution. The term “gig” was popularized by musicians at the turn of 20th century in reference to short, paid performances. Today, contract-based self-employment known as gig work is strongly associated with the use of digital platforms that connect people with skills and assets, and task requesters looking for temporary labour. Some gig workers are pushed into gig work because they are excluded from other employment opportunities. Others are drawn by the promise of flexibility and control over their work. For some it is their principal source of income, but for most it is a supplementary side hustle.

Gig workers are unincorporated self-employed workers who do not report a business number on their T2125. These on-demand, freelance workers are self-employed but do not own a business. They gig through platforms like Uber, Skip the Dishes, Airbnb and Task Rabbit. Not all gig workers use digital platforms, but, between 2005 and 2016 the percentage of gig workers rose to 8.2 percent of all Canadian workers, up from 5.5 percent. Gig working also spiked between 2008 and 2009, and again from 2012 to 2013, corresponding with the entry of gig work platforms into Canadian markets.

Statistics Canada uses tax and administrative data to identify people within the self-employed category whose work is characterized by particular forms of payment, contract types, work schedules, schedule of earnings and supervision.

The Foodora case from earlier this year illustrates the precariousness of gig work. In February, drivers for the app-based food-delivery service won the right to unionize in Canada – a precedent-setting victory. Soon after, in April, the company announced it was closing its Canadian operations, blaming stiff competition during COVID-19. The timing raised eyebrows.

Gig workers are often perceived as having autonomy and flexibility. But their choices are constrained. For example, on some gig work platforms, price algorithms make some shifts more profitable than others. Gig workers might only turn a profit by working those particular shifts, undermining the notion that they can freely choose their schedule. While the 2016 median after-tax income of Canadian households was $59,200, the median net income for a gig worker that year was only $4,303. During the COVID-19 crisis, many gig workers operating without security or benefits have faced a trade-off: risk exposure to the virus by working or give up needed income to stay safe.

The drawbacks and trade-offs of gig work are detailed in a July 2020 paper – Understanding the Nature and Experience of Gig Work in Canada published by the Public Policy Forum and the Diversity Institute. Policy-makers must consider these aspects when shaping recovery period labour policies. They include the question of:

  1. Choice. What conditions lead to people to choose gig work? How much of a choice do people really have when they sign on for work characterized by a double edge of independence and isolation?
  2. Flexibility. Companies present it as a perk, and workers value it. But this freedom is not absolute. For example, Foodora drivers are given options for when to work, but schedules and payment rules restrict and influence their choices. Choice is largely designed and controlled by the app.
  3. Exploitation. Gig workers are decentralized and disaggregated, presenting opportunities for exploitation. The lack of visibility and reduced lines of accountability make the gig economy difficult to regulate, and gig worker status poses barriers to unionization and collective bargaining.
  4. Benefits. Gig work presents challenges in terms of accessing benefits, and skills and training opportunities critical for economic recovery. Solutions such as portable benefits, and skills programming detached from employers are growing in importance and many jurisdictions are experimenting with models.

Not all gig work is undesirable. Consultants often make good, if cyclical, incomes and we need to create opportunities for entrepreneurship that don’t require access to deep capital. Gig workers can use gig platforms to enter markets and incubate business ideas. As task-based roles are gaining in popularity, the economy could end up being rebuilt with millions of micro sole-proprietor businesses rather than 9-to-5 jobs. The “gig economy” may become just “the economy.”

A lack of common definitions for gig work has contributed to a lack of understanding of the gig work experience. There is a significant difference between the experience of an Uber driver and a Java developer. By the end of this year, Public Policy Forum and the Diversity Institute will release a second report on gig work, setting out a typology for better understanding the diversity of gig workers. This work will help inform the development of effective policy as we move into recovery. Sophisticated policy solutions will be critical in responding to the growing uncertainty, vulnerability and precarity amongst Canadians who have lost jobs because of COVID-19 and who may be pulled or pushed into gig work in increasing numbers.

Periods of unemployment are often the catalyst for a move into gig work, and there is good reason to believe that an increasing number of Canadians could be considering gig work. Between February and June 2020, about 301,960 Canadian businesses closed (compared with 195,492 business closures during the same time period last year). The unemployment rate in the core working age (25 to 54 years old) in August 2020 was 8.9 percent, up from 5.5 percent in August 2019. Additionally, 100,600 more people had dropped out of the labour force — were unemployed and not seeking work — over August 2019 figures. Behind those numbers are Canadians who can’t find work or have closed their business. Some have gone back to work on reduced hours; others have chosen not to return to work as an employee because of care-giving responsibilities. They could make up a new wave of Canadians bringing different skills and qualifications to gig work.

We do not have timely or adequately detailed public data about gig workers — the sectors they work in, their incomes, their demographic characteristics, or an understanding of their lived experiences and needs as gig workers, all of which might be changing as we speak. In the recovery period, we need timely analysis of who is gig working and how, and what their needs are. Further, we need to explore systems of support such as portable benefits untied to individual employers to ensure gig workers are not vulnerable now or later in life.

As the gig economy takes up a greater share of the Canadian economy, we might also question how to bridge interested gig workers into business-ownership; after all, many gig platform operators funnel profits outside of Canada. It is time to take gig work seriously as a part of the Canadian economy, and to get creative with policies that will mitigate the cons and capitalize on the pros of gig work for Canadians.

This article is part of the Tackling inequality as part of Canada’s post-pandemic recovery special feature.

This article first appeared on Policy Options and is republished here under a Creative Commons license.



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Also on California ballot: Gig economy, race in admissions

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Written by Karishma Mehrotra
| San Francisco |

October 26, 2020 4:01:40 am


Supporters of “pro-black” initiatives on the ballot at an event hosted by the California Democratic Party Black Caucus. (AP)

Should Uber drivers be considered employees? Should public schools consider race when accepting students? Should 17-year-olds who will turn 18 by the time of a presidential election be allowed to vote in the primaries? Should prisoners be able to pay cash to get bail?

Other than choosing between presidential candidates Donald Trump and Joe Biden, in what is being called the contest for “America’s soul”, these are some of the questions Californians will be voting on come November 3. Debates in this Democratic state have long been leading indicators of social issues roiling America — and the propositions on the ballot this time are no different.

“To study California initiatives and referendum is to study a microcosm of the major… issues that people and politicians have cared about,” wrote historian John Allswang in his book on the state’s proposition system.

This year’s propositions, put on the ballot by citizens who garnered at least 623,212 signatures in support of each, come from a long tradition of direct democracy in the country. US citizens can suggest propositions — or legal measures — to be put to popular referendum in a state, bypassing the legislature.

California was the second (after its close liberal sister Oregon) to institute the system in the late 1800s and has used it most frequently. A series of propositions in the 1900s dealt with politics over oil exploration and insurance companies. In 2008, Proposition 8 was one of the first legislative debates about gay marriage. In 2010, voters were asked to choose between emission standards and employment rates — all issues that made their way eventually to international discourse as well.

This year, the most contested proposition, Prop 22, has voters asking if Uber drivers should have flexibility or stability. With stickers on Uber vehicles and on bags of online grocery service Instacart, app-based companies have spent $181 million — the most in California’s history on a proposition campaign — to get voters on their side. If it passes, it would exempt companies like Uber from providing employee benefits to their drivers. A group of gig workers sued Uber for $260 million on Thursday for the company’s aggressive in-app messages asking riders to support the prop.

Currently, companies like Uber, Lyft and food delivery firm DoorDash use a contracting model so that they don’t have to pay their workers unemployment insurance, overtime, or compensation. The companies claim most of their drivers, a million Californians, would prefer the flexibility of contract work over the stability of employee benefits.

“(E)mployment comes with a cost: hundreds of thousands of drivers would lose work opportunities overnight,” wrote Dara Khosrowshahi, Uber CEO, in a blog post. “To be clear, I’m not arguing that gig work is perfect. On the contrary… we should be honest about how independent work must improve to meet the needs of the moment.”

Uber and the companies argue that if this proposal doesn’t pass, drivers would be forced to become full-time or leave the platform, and prices will increase.

Those who are voting against the proposition want drivers to get full employee protections and say companies shouldn’t write their own labour laws. Democratic nominee Joe Biden has endorsed this side.

Another contentious measure, supported by Democratic Vice-President nominee Kamala Harris, would allow public entities in employment, contracting and education to consider race, sex, colour, ethnicity, or national origin to address diversity. In other words, it would allow affirmative action, giving preferential treatment to historically disadvantaged groups. The state had outlawed this practice in the 1990s. The system is different from quotas, which are banned by American federal law.

This is most often brought up in the case of university admissions. Many Asian Americans believe affirmative action measures hurt them, as their higher scores are de-valued for another’s identity. Others say diversity should focus more on class, not race.

A social media campaign directed at Asian Americans targets Chinese American politicians who support the proposition: “Will Assemblyman Evan Low Betray You?” one flier reads. Signs across the state read “Don’t Divide Us” or “Opportunity for All”.

Prop 24, calling for consumer data privacy protections, is more than 50 pages long. It wants changes to the California Consumer Privacy Act of 2018, redefining sensitive data, limiting the time companies could hold onto data, and creating a new regulatory agency — with several parallels to the Personal Data Protection Bill currently pending in Indian Parliament.

California and several other states are also tackling criminal justice reform, in the backdrop of this summer’s Black Lives Matter protests. In Ohio and Maine, voters are considering a civilian review board to investigate police misconduct, and in Michigan, the police may need a search warrant to access electronic communication. Other states are tackling campaign finance reform and recreational marijuana use. Mississippi is considering a new state flag, while Rhode Island might change its official state name.

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Direct Selling Industry To Benefit As India Embraces Gig Economy

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Direct selling remains a compelling option for young entrepreneurs

In these tumultuous times, direct selling has provided hope for millions of people who were looking to utilize their skills to go the startup route

20 Mn individuals could be engaged in direct selling by 2025, FICCI-KPMG

Times are tough, Covid-19 is unrelenting and with no clear end in sight. No one predicted how severe and lasting the cascading impact would be on the economy when lockdown started. Pay cuts, job losses, and business closures have debilitated a system already battling a fiscal downturn. According to the Centre for Monitoring the Indian Economy, the unemployment rate in India is estimated to be at 27.1% as of early May, as nearly 122 MnIndians lost their jobs in March and April 2020.

India, like other countries, refocused their gaze within as the infections began to rise rapidly. Initiatives like ‘Vocal for Local’ and ‘Aatmanirbhar Bharat’ urged businesses and individuals to recalibrate and realign strategies. This approach encouraged local manufacturing, but also created a sense of ownership and determination among budding entrepreneurs.

Direct selling remains a compelling option for young entrepreneurs. It provides a business opportunity at negligible initial investment or operating costs. The option lends flexibility to work on their own time. However, it is Aatmanirbharta that has always been a central tenant in direct selling.  Running your own business means you decide whether your business sinks or floats.

In these tumultuous times, direct selling has provided hope for millions of people who were looking to utilize their skills to go the startup route.  The 2019 sales figures of $2.47 Bn proves that direct selling industry is thriving and illustrates its potential with the continued growth. The direct selling industry is growing at a healthy rate of 12.1% YoY and India currently ranks 15th, four places up since last global rankings. The pandemic notwithstanding, direct selling is bucking the trend and continues to make a rapid recovery.

Apt For Remote Working culture

So, what is to account for this continued growth during unprecedented strife? The conventional work models have seen a paradigm shift with an exodus to digital. However, direct sellers have always been nimble and adaptable.  Most importantly though, the direct selling industry has always depended on person-to-person (P2P) interactions.

Social media tools like FB live, Instagram live, video conferencing, podcasts and webinars showcase the one-on-one skills marketers have by increasing the number of encounters and focusing direct sellers’ energy towards individual customers . This move has opened new possibilities for direct sellers, and this augurs well for the recovery of the industry and its workforce that thrives working on its own terms. 

Empowering Entrepreneurship

As per the report by FICCI-KPMG, 20 million individuals could be engaged in direct selling by 2025. Direct selling is a business and allows you to be your boss without the commitment of high initial capital and overhead costs. Today, direct selling comprises of millions of professional sellers who are extremely skilled at what they do and can achieve seemingly lofty goals. It also provides flexible work hours to homemakers, which is an important reason the sector has a large percentage of its workforce as women.

Vocal for local

The local growers and manufacturers stand to benefit as the demand of homegrown product continues to rise. As per the industry report, the direct selling industry employs close to 6 Mn representatives and has added to this workforce during the pandemic. The industry has seen a demand spike in wellness products which are rich in vitamins, minerals, antioxidants, phytonutrients. Such products are essential for building immunity and homegrown firms in this segment have benefited by building significant manufacturing capabilities in India.

In summation, the direct selling industry has created a robust ecosystem which provides an avenue for entrepreneurial aspirants to own and operate their own business. The sector continues to attract a ready workforce in search of stable earning opportunities without the trappings of a mundane work life, just the way the gig economy works.



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Irish gig economy app expects to sign up 30,000 users by January

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Gigable, an Irish app aimed at the freelance economy, expects to sign up almost 30,000 people by year end as Covid-19 boosts restaurant deliveries and the demand for drivers.

John Ryan, founder of the company, said that the number is up from 7,000 since before the pandemic took hold and growth accelerated as restaurants sought freelance drivers.

Gigable allows freelance workers to connect with delivery jobs offered by restaurants in Ireland and Britain.

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