The Gig Economy: Flexibility or Fragility?

This blog is largely inspired by SOAS lecturer Chandni Dwarkasing and a Rethink Economics SOAS event in March 2024. 

A major legal setback for Uber is shaking up the gig economy, raising big questions about worker rights. The U.S. Supreme Court refused to hear Uber’s challenge to a California law that gives gig workers more protections, a move that could inspire similar changes worldwide. Earlier this year on Valentine’s Day, Ubereats and Deliveroo drivers across the UK striked for higher wages in what was described as the largest strike by platform workers in the UK. The rapid rise of gig work and platforms has given birth to a new field of study in labour economics that seeks to understand the pros and cons of such atypical work. It is an important question not just for investors and workers but also for consumers. Alongside the strike, UK Deliveroo workers also called for consumers to boycott the app. So is the convenience of food delivery ‘progress’ in the face of exploitation of workers? Why do workers continue to flood to such platforms? What can be done? 

In recent years, “gig economy” has become a buzzword, representing a major shift in how people work. Borrowed from the idea of “gigs” in music—short-term performances—the term describes a new work model based on temporary, on-demand jobs via platforms like Uber, Deliveroo, and Upwork. This new workforce is promised freedom and flexibility but often ends up grappling with instability and exploitation by design. Under neoliberal policies that favour deregulation, gig workers face precarious conditions while companies reap the benefits.

The allure of gig work

Companies promote the idea of “being your own boss,” where workers have control over their hours, workspace, and sometimes higher pay. This flexibility resonates with people balancing other obligations—students, parents, or those seeking income outside rigid 9-to-5 schedules. The promise of independence and the potential for work-life balance are powerful motivators, tapping into a desire for freedom. 

Consumers also benefit from the gig economy’s convenience. Through digital platforms, they can order services on demand, from rides to food to freelance tasks. This ease has made the gig economy indispensable, fitting seamlessly into fast-paced lifestyles.

Flexibility with a catch: The reality of gig work precarity

The freedom promised by gig work often obscures a harsher reality: workers bear all the risks. Income is highly unstable, fluctuating based on demand, platform algorithm changes, or economic downturns. Classified as independent contractors, gig workers lack paid sick leave, health insurance, or retirement contributions—benefits that are standard for traditional employees. This arrangement shifts the cost of health, safety, and financial security onto workers, leaving them vulnerable and often struggling to make ends meet. This structural precarity is intentional. Under neoliberal policies that prioritise market flexibility and corporate growth, companies can avoid labour laws by treating gig workers as contractors rather than employees. 

Alienation and the absence of unions

A critical factor in gig work’s instability is the isolation it fosters. Unlike traditional work environments where employees build solidarity, gig workers are often left alone, competing against each other for jobs and ratings. Gig work’s structure inherently discourages unionisation: workers are physically dispersed, have no shared workplace, and face legal barriers to organising. This lack of union support creates a vicious cycle: precarious work conditions make unionising challenging, and the absence of unions further entrenches insecurity. Without collective support, gig workers are left with limited means to advocate for their rights, making it easy for companies to avoid accountability.

The business benefits of precarity: cost-cutting at a human price

For companies, the gig economy is highly profitable. By employing gig workers, businesses can expand rapidly without the burdens of payroll taxes, health insurance, or employee benefits. This arrangement allows companies to scale operations up or down with demand without facing the labour costs of full-time staff, maximising profit at a human cost. It’s no coincidence that businesses fight against regulations that would classify gig workers as employees, as doing so would require them to adhere to labour protections. The gig economy as it exists is a model of unaccountable corporate growth, what may appear as an innovative work model is, in reality, a profit-maximising strategy that minimises corporate responsibility at workers’ expense. 

Calls for cegulation: A fairer future for gig workers

Public awareness of gig work’s downsides has led to mounting calls for regulation. In some countries, courts have ruled that gig workers should be considered employees, entitling them to benefits and protections. These legal wins are promising, but the broader problem remains: without comprehensive labour protections, the gig economy will continue to prioritise flexibility for companies over stability for workers. The push for stricter regulation challenges neoliberal ideas that emphasise deregulation and corporate autonomy. It highlights a need to protect gig workers as legitimate participants in the economy.