By Dulvan Senaratna

Published: May 07, 2024

References: 7

Open Access

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The gig economy, characterized by short-term contracts or freelance work as opposed to permanent jobs, has grown significantly in recent years. This growth is largely driven by advancements in technology, which have facilitated the rise of digital platforms connecting gig workers with potential employers. This paper explores how technology shapes the gig economy, the opportunities it presents, and the challenges it poses.

The Rise of the Gig Economy

Technology has played a crucial role in the development of the gig economy. Platforms such as Uber, TaskRabbit, and Upwork have revolutionized how work is sourced and delivered. These platforms leverage mobile apps and websites to match workers with tasks, providing flexibility and autonomy to workers while offering employers a scalable and cost-effective workforce (Kuhn & Maleki, 2017).

• Opportunities Presented by Technology

Flexibility and Autonomy

One of the most significant benefits of the gig economy, enabled by technology, is the flexibility it offers. Workers can choose when, where, and how much they want to work. This flexibility is particularly beneficial for those who need to balance work with other commitments, such as caregiving or education (De Stefano, 2016).

Access to a Broader Market

Digital platforms allow gig workers to access a global market. Freelancers can offer their services to clients worldwide, breaking down geographical barriers that previously limited their opportunities. This has been particularly advantageous for skilled professionals in developing countries who can now compete in the global marketplace (Codagnone et al., 2016).

Cost Efficiency for Businesses

For businesses, the gig economy offers a flexible labor force that can be scaled up or down based on demand. This flexibility helps companies manage labor costs more effectively, as they can avoid the long-term commitments and benefits associated with permanent employees (Burtch et al., 2018).

• Challenges Posed by Technology

Job Security and Benefits

Despite the opportunities, the gig economy also presents significant challenges. One of the main issues is the lack of job security and benefits for gig workers. Unlike traditional employees, gig workers typically do not receive health insurance, retirement benefits, or paid leave, which can lead to financial instability (Kalleberg, 2011).

Worker Exploitation

There is also the potential for worker exploitation. Some platforms have been criticized for low pay and poor working conditions. For instance, drivers for ride-sharing apps often face long hours and unpredictable income, leading to concerns about the sustainability of such work (Ravenelle, 2019).

Regulatory and Legal Issues

The rapid growth of the gig economy has outpaced regulatory frameworks. Many gig workers are classified as independent contractors rather than employees, which exempts companies from providing standard employment protections. This classification has been the subject of legal battles and calls for regulatory reform to ensure fair treatment of gig workers (Prassl & Risak, 2016).

Technology has undoubtedly played a pivotal role in shaping the gig economy, offering numerous opportunities for both workers and businesses. The flexibility and access to a broader market are significant advantages that make gig work appealing to many. However, these benefits come with substantial challenges, particularly regarding job security, worker exploitation, and regulatory issues. Addressing these challenges requires a concerted effort from policymakers, companies, and workers to create a more sustainable and equitable gig economy.

References

• Burtch, G., Carnahan, S., & Greenwood, B. N. (2018). Can you gig it? An empirical examination of the gig economy and entrepreneurial activity. Management Science, 64(12), 5497-5520.

• Codagnone, C., Abadie, F., & Biagi, F. (2016). The future of work in the 'sharing economy'. Market efficiency and equitable opportunities or unfair precarisation? JRC Science for Policy Report.

• De Stefano, V. (2016). The rise of the "just-in-time workforce": On-demand work, crowdwork, and labor protection in the gig economy. Comparative Labor Law & Policy Journal, 37(3), 471-504.

• Kalleberg, A. L. (2011). Good Jobs, Bad Jobs: The Rise of Polarized and Precarious Employment Systems in the United States, 1970s-2000s. Russell Sage Foundation.

• Kuhn, K. M., & Maleki, A. (2017). Micro-entrepreneurs, dependent contractors, and instaserfs: Understanding online labor platform workforces. Academy of Management Perspectives, 31(3), 183-200.

• Prassl, J., & Risak, M. (2016). Uber, Taskrabbit, & Co: Platforms as employers? Rethinking the legal analysis of crowdwork. Comparative Labor Law & Policy Journal, 37(3), 619-651.

• Ravenelle, A. J. (2019). Hustle and Gig: Struggling and Surviving in the Sharing Economy. University of California Press.

About the Author

Dulvan Senaratna studied at Northwood University and has a leadership qualification from Harvard Kennedy School. In addition to pursuing a BBA in International Business, he has led guest lectures and has been involved in several economic and women empowerment dialogues over the years.

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