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How COVID-19 Exposed The Hard Questions About The Gig Economy

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Consumers are convinced. Wall Street is buoyant. Demand around the world for app-based services is booming, with entire nations stuck at home during COVID-19 lockdowns and the prospect of goods and services at their door with just a click. As the so-called “Gig Economy” spreads alongside the pandemic, society has struggled to keep up.

• Online sales in South Korea have grown by 17% this year, and 42% in food deliveries.

• The freelancer platform PeoplePerHour registered a 300% increase of users in March of this year in the UK, 329% jump in Spain, and 513% in Japan.

Upwork reported a 24% increase in signups over the summer.

Investors and founders of the likes of Doordash and AirBNB are cashing in, with the two companies IPOs hitting record highs and earning Wall Street approval for their respective market dominance. Still, the stock market is not the economy, and white-collar and blue-collar workers alike have been forced to turn to gig-work out of financial necessity — offering little in the way of social benefits or long-term prospects.

“I have to work twice as much to make half of what I was making to survive,” said Tyrita Franklin-Corbett, a former retail worker turned Instacart gig-shopper, to Reuters in October.

How it works: Rather than earning a regular wage, these apps pay for each “gig” completed. While it’s not uncommon that people turn to freelance work during periods of economic downturns, the health crisis presents a unique scenario in which freelance workers risk being exposed to the virus in order to get paid.

• In the UK, a recent survey by the Centre for Economic Performance (CEP) found that 78% of app workers thought their health was at risk while working.

Exploited & Exposed: The pandemic has exacerbated the vulnerabilities of millions of workers already in precarious financial situations and without a safety net. Deliverers are considered “essential,” but they don’t receive the same protections (both physical and economic) as other essential workers.

• With Uber Eats in France offering 10 euros to customers on three orders during lockdown, workers have accused the tech-giant of “promonavirus,” that is, using them as “cannon fodder,” to serve meals while everyone else stays at home, Le Monde reports.

• “We have no protection,” migrant food delivery rider Diego Franco in Australia recently told the Sydney Morning Herald.

• Already this year, 15 delivery workers in South Korea have died from “kwarosa,” literally “to die of overwork.” The gig-world is at its tipping point.

At a rally by Uber and Lyft drivers calling for basic employment rights in Los Angeles — Photo: Ringo Chiu/ZUMA Wire

Pushing back & shutting down: In the face of this harsh reality, gig workers have responded with work shutdowns, lawsuits and union organizing.

• In the U.S., thousands of Amazon workers have gone on strike in New York City after reports emerged that several employees had tested positive and still lack safety gear.

• The Independent Workers’ Union of Great Britain (IWGB) won a lawsuit which accused the UK government of failing to extend health and safety protections such as PPE to gig workers.

• The Italian food delivery industry, Assodelivery, has threatened to protest in order to give legal status to relationships with workers.

• As a result of the increase in demand during the pandemic, Scottish workers created the Workers Observatory union to discuss difficulties and track data in order to “challenge conditions in self-employed and gig work.”

Fixing a fairer future: Ultimately, gig work has thrived until now on its lack of regulation. Yet the pandemic has clearly displayed the need for basic regulations, both for the workers and ultimately for the companies as well.

• La Stampa reports that Italy is attempting to strike a solution, where companies like Uber, Deliveroo, Glovo, JustEat will recognize workers as employees starting in 2021, earning a minimum wage of 10 euros per hour, along with overtime pay equal to 10%, 15% and 20% linked to following night work, holidays and bad weather.

• California recently passed Proposition 22, which seeks to provide contractors with health insurance and retirement benefits. The ballot initiative was funded by $200 million from Uber and its competitor Lyft, who presented it as a way to add some protections for its drivers while leaving them flexibility in when and how they work. Still the measure’s main point was to specifically exclude gig workers from basic health and retirement benefits of a new law. Californians overwhelmingly supported the proposition, passing it 58 to 42 %.

France is offering € 1,500 to self-employed entrepreneurs who have experienced a drop in turnover of at least 70% as a result of COVID-19. But some gig workers simply cannot afford to face this drop to begin with. For them, it’s even more crucial to keep working, even if it means extra hours and health risks.

The real takeaway? Critics have argued that these efforts are mainly face-saving measures that protect the platforms in the long run, and do little to address exploitation. In Europe, labor experts say that reforms that have long been driven by the rights of permanent employees must now focus on the broader status of “workers.” Others are pushing for the implementation of a universal basic income (UBI) to address the entire economic system. The pandemic has offered further proof that the Gig Economy is not going away. But it has also shown that it is built on a system of inequalities that, IPOs aside, are not sustainable in the long run.






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5 Gig Economy Tips That Will Help You Succeed

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The gig economy has been expanding at a scorching pace, with some surveys indicating that nearly one in three American workers now participate in it, whether part-time or full-time.

A Harvard Business Review study showed that participants in the gig economy do well because they avoid the distractions, pressures, and monotonous routines associated with the traditional workplace.

Here are a five tips that can help you thrive in the gig economy.

Master time management

As a freelancer operating in the gig economy, you are not bound by the fixed timings of a physical office. While this is an excellent advantage, you will not be able to maximize your opportunity if you are not managing your time efficiently.

Download a task manager app on your phone, utilize the calendar app on your laptop, and set up daily reminders for your video meets and phone calls.

Smart time management techniques will help you enjoy the work-life balance you always wanted without diluting your income.

Cultivate your brand

If you are offering your skills or services as a gig worker, the most important product you are selling is you. Focus on building a personal brand that will set you apart from the competition. Clients will find it easy to recall you each time they have a project to outsource.

Get a professional brand name and logo done online, update your LinkedIn and Facebook profiles (if you have a Facebook account), and build a solid digital portfolio to present your skills.

Request client testimonials from past clients, and showcase them effectively.

Create passive income

When you are operating alone as a gig worker, you only have 24 hours in a day. You can only complete a limited number of client projects at a given time. But that does not mean that your income has to be limited. You can find ways to earn additional money without excessively stretching out your time.

Consider getting a roommate if you have a spare room, or become an Airbnb host. If you are working from home, you may even rent out your car using the Turo app. These gigs can create a stable passive income stream.

Control your finances

When you work as an independent contractor, an online entrepreneur or a freelancer, managing your money will require some careful planning.

Unlike permanent employees working for a company, the gig economy does not provide you access to 401(k) or some other employer sponsored retirement plans and health insurance.

It is vital to focus on securing your own financial future when you are a gig worker. Consider automating your bill payments, participate in a systematic investment plan (SIP), and get adequate health and life insurance coverage. Talk to a certified financial planner if necessary.

Keep skills sharp

In a full-time job, complacency can often set in and learning becomes static. As a gig worker, you have the freedom and flexibility to constantly update your knowledge and skills and stay on top of your niche.

Take some free or paid online courses and training that can help you deliver more value to your clients. Learning will also widen your horizons and propel you to do bigger things.

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Entrepreneurs-by-chance who set up a thriving marketplace for gig workers – Business Standard

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View: Gig workers are employees. Start treating them that way

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One of the nation’s largest grocery chains, Albertsons, announced this month that it would replace many of its staff delivery drivers with independent contractors working for the delivery service DoorDash. Those contractors will not receive important labor protections that have been provided to the full-time employees they will be replacing.

For years, companies and legislators have debated whether so-called gig workers like those who drive cars for Uber or deliver groceries for DoorDash should be entitled to benefits like minimum wage and unemployment insurance. But in the wake of a California ballot proposition passed in November and a rule just released by the Trump administration, it appears that the erosion of labor protections is advancing aggressively.

When the gig economy sprang up during the Obama years, it seemed novel. Companies like Uber used software to offer assignments to people on call who set their own hours. One major caveat: As independent contractors, these workers wouldn’t get traditional wage protections, workers’ compensation, health insurance or unemployment benefits. But that didn’t stop the quick expansion of the gig economy.

In 2019, California legislators sought to improve life for gig-company workers, passing a law that required companies to treat app-deployed workers as employees. In response, the companies spent $200 million promoting Proposition 22, a state ballot initiative that affirmed gig companies’ classification of their workers as contractors while enshrining limited protections.

This hybrid labor category came from an unexpected source. In 2015, Seth Harris and Alan Krueger, labor economists from the Obama administration, argued against giving gig workers employment status. Instead, they proposed a compromise: App-deployed workers could receive some rights, like tax withholding and a right to organize, but not others, such as a minimum wage and unemployment insurance.

But researchers like us who have documented the exploitive conditions of gig work worried that this approach would hurt a much larger group of service workers — just as the Albertsons decision will.

App workers need the same benefits afforded to traditional workers, including payment for time between assignments, unemployment benefits and the right to organize. The pandemic, which greatly worsened conditions for delivery workers and “shoppers” (the people assembling grocery orders), has exposed just how vital basic protections are for vulnerable workers.

In ongoing research with colleagues at Northeastern University, one of us, Dr. Schor, analyzed a delivery platform that converted its California workers to employees before the passage of the 2019 law. Both top and middle management said they felt positively about the switch, citing improved performances and increased productivity that partly offset the costs of employment protections.

In ethnographic research on Uber and Lyft ride-hail drivers, Dr. Dubal found that, contrary to the companies’ promises of freedom and flexibility, longtime drivers feel trapped in grueling work schedules and controlled by their algorithmic bosses. Notably, these findings undermine Uber and Lyft’s arguments against employment status.

In a bad omen for workers outside California, Dara Khosrowshahi, the chief executive of Uber, has vowed to support efforts similar to Proposition 22 elsewhere. Lyft, a competitor, is behind political action committees that will support candidates who will protect its business model. Shawn Carolan, a venture capitalist whose firm has invested in Uber, has written that the Proposition 22 model should be extended to other industries, such as education, health care and computer programming — which would increase the number of Americans who toil without a safety net or predictable earnings.

In some sense, gig-economy companies have been moving in parallel with Washington. The Trump Labor Department this month released a rule, set to go into effect in March, that will make it easier for companies to designate their workers as independent contractors.

But the incoming Biden administration can undo the rule. And working with Congress, it can move to dignify app-deployed work by calling it what it is: employment.

The Biden administration can end the state-by-state, sector-by-sector battle over basic workers’ rights. It can clarify that exemptions from employment and labor laws violate the Fair Labor Standards Act, therefore invalidating Proposition 22.

Marty Walsh, Joe Biden’s nominee for labor secretary, can also move to revoke a Trump administration letter from 2019 that classifies gig workers as contractors. Perhaps most important, the Biden administration could work on winning passage of the Protecting the Right to Organize Act, which would untie the hands of workers who seek to organize their workplaces.

As inequality reaches record highs, the hybrid-worker category threatens the future of all service workers. With the building of progressive momentum to address racial and economic inequality, the Biden administration should expand protections for all workers, not allow them to erode for millions more.



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