The trouble with gig economy

I grew up in a social setting such that people once they earn a bad name, it was very difficult for them to recover and be back in full swing in the society. They have to rebuild their reputation either in a new place or the same place. Why did people try to associate themselves to a society?; because living together was easy and people helped each other a lot. If one falls sick, there were people who helped the family of the sick member to help them get back upto speed.

The labour market also did the same, governments across the globe came up with a lot of guidelines and laws to employ people such a way that there was social security in the form of sick time, paid leaves, bonuses, retirement funds, insurance and gratuities. We were able to advance as a society very well with these elaborate social structures, though someone can earn a lot of money doing small gigs many people avoided for the predictable life of an established company.

The lure of quick money is always there, especially when people are young the cash in hand always triumphs the long term survivability. People don’t see far ahead and not many are aware of saving for the rainy days when they are strong, healthy and ignorant. This makes a lot of people take up gigs to survive, a gig means – ‘a job, especially one that is temporary or that has an uncertain future’. Gigs offer a lot of money in hand for a given skill and experience to compensate for the uncertainty in the future.

The money component alone lures a lot of people into the gig economy where people with less or no skills can immediately get going and even get paid within a day of commencing work. The trouble with gig economy is

  1. There is no social net in it, sort of a medieval system where the strongest and fittest survive. If people fall sick or meet with an accident they lose all the savings, they earn no money during sick time and end up with a perpetual high cost debt.
  2. You can get away doing bad work or behaviour, and if things go bad you can leave a system and join something else fresh. If you did bad job in a food delivery system, you can leave and make money driving cars for sometime. Though the same is possible in full time employment, the scale at which this can happen is big in the gig economy and you can change identities easily or mask your past performance easily

It is hard to address point number 1, the gig economy is new and it is giving jobs to a lot of people and many of them get a lot of money which they think is disposable and end up spending it.

The second point is bad from a consumer point of view, if there is no repeat business from a customer there is no incentive to give good product or service. Uber does it through its rating system, but what if that person decides to create a new profile altogether after a messed up profile or switch gigs to something else.

In the short run it seems a lot of people will have new jobs and people in college can do part time work for delivery services, but in the long run it will tune people to settle for a life where they think that they can earn a lot than full time employment but companies will do all sorts of tactics like ‘bait and switch’ which has happened to cab drivers in India and keep them hooked on to the system even when it turns damaging for them.

There will be a point in time that governments have to intervene to make sure exploitation of its citizens don’t take place else our society will slowly regress into a medieval feudal system.

2 Comments

  1. The gig economy leans towards the capitalist side of the spectrum where every person is for themselves. It expects you to make sure that you enough savings and insurance in case of unforeseen circumstances. As you rightly pointed out, most people are bad at this stuff and will end up blowing up their earnings. If the gig economy becomes the default for people starting their careers, it could mean people ending up in debt without social security (like America). However, a significant amount of India’s population works in the unorganized sector and it is like the gig economy in any case.

    Reply

    1. The problem is when people can get away with bad work, in the informal sector generally there are repeat customers as most of the businesses are local; so people need credibility to sustain business, in the modern internet based gigs you can hop between gigs doing barely enough things to keep earning.

      Reply

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