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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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What is the gig economy and what does it mean for gig workers?

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The gig economy is a widely popular term for contractors and freelancers these days. Today’s labor economy is divided into many segments, and one of them is reserved for the gig economy. This economy is characterized by aspects that are not connected to the traditional workforce. Then, we wonder what the gig economy is? It is an economy that is related to independent contractors, contract firm workers, online platform workers, and temporary workers.

Gig workers are part of the flexible workforce that is still under debate in terms of legal classification. Many gig workers want to be legally recognized as employees in the companies they work for. At the moment, the gig workers are classified as independent contractors, which is not the term that many workers want to acquire.

Find a gig job online

Some workers in the gig economy often do their job from home, and they are characterized as freelancers. Many freelance jobs are available on gig economy platforms, like UpWork or Fiverr.

what is gig economy and gig workers gig jobs online find

Having gig jobs is still under debate as many prefer security with regular jobs over a side gig.

We can also find gig jobs on other platforms and there is a huge range of jobs that gig workers can do. Some of these gig jobs are:

  • Digital Marketing
  • Graphic Design & Branding
  • Virtual Assistant
  • Freelance Writing
  • Pet Sitting and Dog Walking
  • Web developer/Coding
  • Driving for Uber or Lyft
  • Deliver Food

Most of these gigs are paid on an hourly basis, and these jobs are available on the platforms that offer secure payments. If you want to be part of the platforms, it is usually enough to register with your information and apply for a gig.

In some segments, the occasional work is better than a regular job, but most Americans decide now prefer to have a side gig along with the regular job. They want the security of a regular job and often choose to have a side gig as an additional source of income. This kind of combination brings them the money they want to have at the end of the month.

On some occasions, gig workers decide to have only the gigs and this may be their complete income. If they earn enough for the proper living, they usually leave the regular job and focus on the gigs to earn their income.

The gig economy has risen in recent years as many technologies evolved to the present level. We now have smartphones and apps that serve us as guides in our everyday lives. We can buy, sell, get to the needed location, take a photo, or share a comment online. All of these activities are possible today only with the presence of new technologies.

As a result, many new jobs have been created in recent years. We now have the necessity to use our smartphones and computers to stay in touch with the current news and situations around us.

Many gigs are available online and offline, and we can see how the gig market has developed over the years. You can apply for gig jobs from home. These can be gig where you go around the shopping center and take photos of products, or you can pick up someone with a car and take them to the needed location.

If you want a home-based gig, you can do graphic design or write an article. There are so many options in the gig economy, and everyone can find a gig job online. It is sure that the gig economy will continue to grow in the future as many people want to have a side gig next to a regular job.

At the same time, there are many people who base their income only on gigs. It is an industry that is here to stay for a long time. 

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1 in 5 gig drivers got unemployment benefits at pandemic peak

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About 1 out of every 5 drivers in the gig economy was collecting unemployment benefits at the pandemic’s peak, according to a new analysis published by the JPMorgan Chase Institute.

These drivers worked for “online platforms” offering services like ride hailing (Uber and Lyft, for example) and food delivery (like Instacart and DoorDash).

Nineteen percent of all gig drivers were receiving jobless benefits in July 2020, according to the report, published Tuesday. That’s the highest monthly share among drivers during the Covid pandemic. (The report analyzed anonymized personal checking accounts for 30 million Chase customers.)

It’s also a higher share than other categories of gig workers and more than twice that of non-gig workers.

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The data suggests lawmakers should consider gig workers — especially drivers — when designing the U.S. safety net, according to Fiona Greig, co-president of the JPMorgan Chase Institute.

Drivers tend to live in low-income households and account for the biggest share of gig workers, according to the report.

“Of all platform workers, drivers appear to be the group of biggest concern for policymakers from a welfare perspective, the report said. “They are the most numerous group, have the lowest family incomes and were the most likely to have received unemployment insurance during 2020.”

Unemployment benefits

Gig workers, generally treated as independent contractors, are typically ineligible for state unemployment benefits.

Congress authorized them (and others like freelancers and part-timers) to collect benefits via a new federal program, Pandemic Unemployment Assistance, during the Covid crisis. (The program ended on Labor Day.)

“There was no one to drive to the airport because no one was traveling,” Greig said of work conditions for drivers during the pandemic. “There was a demand shock and income shock.”

Worker advocates have called for aspects of the PUA program — which supported millions of people — to be a permanent fixture of the unemployment safety net.

Benefit receipt peaked at between 13% and 15% for non-driver gig workers (services like house repair, dog walking, online selling and short-term leasing of housing or cars) during the pandemic, according to the JPMorgan report.

The share peaked at 9% for non-gig workers (like W-2 employees), even when accounting for differences in factors like age and income.

In 2019, the typical take-home pay for drivers was $49,000 — the lowest among all categories of gig workers, the report found. (By comparison, people who offer short-term leases — like an AirBnb owner, for example — made $102,000 that year.)

Low earners throughout the U.S. economy were unemployed at much higher rates than other workers during the pandemic. Jobs in the service sector, which tend to be in-person and pay lower wages, were hit particularly hard by the health crisis.

In mid-August, employment for the bottom third of wage earners (who make less than $27,000 year) was still down 26% from pre-pandemic levels, according to Opportunity Insights, a joint economic project of Harvard University and Brown University. Meanwhile, jobs were up 10% for the highest third of earners, who make over $60,000 a year.

The report doesn’t specify how the rate of unemployment receipt among gig drivers compares with other low-paid groups outside the gig economy, such as those in leisure and hospitality.  

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Demand for gig workers rise as economy opens up; festive season boosts hiring

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Demand for gig workers has zoomed across sectors as businesses have begun opening up leading to an uptick in consumer sentiments and rising pent-up demand, according to experts.

”In the third quarter, with the onset of festive season, we are witnessing a 400 per cent spike in the hiring for gig workers. Earlier, in the first quarter of this year, as many businesses and companies were not operating at full strength, growth was muted.

”However, things began picking up and became more promising from the second quarter, as the demand for gig workers across sectors grew,” Taskmo, a subsidiary of Quess Corp, co-founder Prashant Janadri told PTI here.

Given the impact of the pandemic, companies are preferring quick hiring processes, therefore gig workers and short-term workers are in high demand, he added.

He said that currently, the demand for gig workers is being witnessed, especially in sectors including edtech, fintech, mobility, e-commerce, foodtech and retail across roles.

Roles such as business development, sales, marketing, onboarding, auditing, retail and warehouse operations are mostly in demand, he added.

”As companies are opening up after the COVID-19-induced lockdowns, we are witnessing increased demand in customer support, tele-sales, onboarding partners, auditing, packing, customer service, loader-unloader, samplers and merchandisers roles,” he said adding that demand for blue-collar gig workers is more as compared to the white collar workforce.

The salary for gig workers is 1.25-1.5 times higher as compared to the first and second quarter, Janadri also said.

Echoing a similar view, FirstMeridian Business Services Group CEO Sudhakar Balakrishnan said pent-up demand and rising consumer purchasing, e-commerce is expected to generate up to 1 lakh jobs this festive period.

The Indian job market is on the road to recovery, as most of the companies are intending to hire in this quarter, which is expected to be the highest over a period of 1.5 years, he stated.

”The pandemic has taught companies about adaptability and new ways to navigating through disruptions. There was an increase in the number of delivery boys, people handling distribution centres to meet the demand in the festive season.

”Looking at the current trends, hiring in the e-commerce sector is expected increase 50 per cent, e-pharma and logistics will increase 30-40 per cent and food delivery will increase over 50 per cent,” he noted.

He further said that e-commerce, e-pharma, and logistics are the biggest job creators in the gig blue-collar space right now, and 70 per cent of new hires will be blue-collar, while 30 per cent will be white-collar.

E-commerce is also facilitating indirect employment at seller partner locations, with kirana stores acting as last-mile delivery partners, he said.

”Also, demand for gig workers are robust in sectors such as logistics, warehousing, technology and support services, as companies expand and optimise their supply chains. Retail, healthcare, home services, and fintech are also areas of focus,” he said.

Balakrishnan further stated that the demand for blue-collar workers has increased by 50 per cent in Maharashtra, Telangana, Tamil Nadu and Karnataka, which are more industrialised.

”The majority of the hiring is taking place at Delhi, Mumbai, Hyderabad, Ahmedabad, Kolkata, Pune and Lucknow. Even as India’s gig economy is an unorganised sector where wages are not fixed, we anticipate that the workforce will earn an additional 25 to 30 per cent as a result of the increased workload,” he added.

Meanwhile, CIEL HR Services Director and CEO Aditya Mishra said hiring of gig workers has gone up due to the sales and marketing push by e-commerce players, consumer durables, apparels, footwear, food and beverages, beauty and wellness sectors.

”We see gig workers in a wide variety of roles, the largest being in last-mile delivery. We see rise in gig workers in the domains such as content, digital marketing, supply chain operations, sourcing consumer loan applications, beauticians and technicians for cleaning services, installation of electronic appliances.

”On an overall basis, blue- and grey-collar jobs are the most in number, about 90 per cent,” he said.

Metros, tier-II and -III cities have created these jobs for the festive season because the end customers have been in a buying spree, Mishra said.

”As the scare of COVID-19 has receded, we see an upswing in consumer sentiments and the pent-up demand is finding the release.

”Another important reason is the fact that many people have moved back to their home towns and the spending power is no more concentrated in the metros as they used to be pre-COVID-19 era. As a result, we see a rise of over 50 per cent in demand of gig workers in tier II and III cities,” he observed.

The earnings of gig workers will increase in the season because they will get to perform 40-50 per cent more gigs than what they did on an average month, he added.

(With PTI inputs)

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Published on: Thursday, October 21, 2021, 11:43 PM IST

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