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What is the “Gig economy”?

The gig economy is the term used for the digital economy whereby mobile apps or websites connect service providers with end customers and usually result in a financial transaction taking place.

For example, when you take an Uber to go to your office from home, the service is provided by Uber through its driver, and you make the payment for the ride you took.

gig economy

Now take a moment to think about the driver. Most probably he will be an independent worker who owns a car and has entered into a formal agreement or contract with Uber to provide driver services to customers who book using the app. This arrangement is more or less the same with all of the gig economy workers, whether you look at Talabat AirBnB or Careem, and Uber. 

Another question, do Uber’s drivers have any worker rights like full-time employees, e.g., do they have time-off, and medical insurance or are they simply freelancing part-time employees with whom the company (in this case Uber) have no responsibility or commitment for their wellbeing?

This is an interesting question and the British Supreme Court in 2021 took a decision about these workers that will have far-reaching implications for all gig-economy companies and employees across the world since every city will take cognizance of this judgment from now on and consider it as a precedent.

The British Supreme Court judgment

The court ruled in 2021 that drivers at Uber are very much entitled to workers’ rights and must be considered as workers. This Judgement came after a 4-year long legal battle between Uber and GMB Trade Union in the UK. This paves the way for Uber drivers to be now entitled to breaks, holiday pay, and yes: minimum wage! 

Uber has been unsuccessfully arguing that drivers should be considered “self-employed” since they choose their own working hours and place or work and also often find passengers through competitive ride-hailing apps!

However, the court ruled that the services provided by the drivers were very tightly controlled and managed by Uber, so the drivers cannot be considered self-employed!

In fact, the drivers are “in a position of subordination and dependency…such that they have little or limited ability to improve their economic position through professional or entrepreneurial skills” as per the court.

In Summary

While Uber of course will have to comply with the judgement without doubt, it does have wider implications for the future of the gig economy as a whole.

It could lead to higher prices for Uber users and overall gig economy companies might curtail their expansion and hiring plans which could lead to thousands of young people unable to find any meaningful employment in many of the cities across the world.

Let us see how things shape up in the months ahead…like I said earlier, these are indeed “interesting times”!

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