What is the gig economy?

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The most complicated of the gig economy is how to translate this concept into Spanish in a correct and intelligible way. The term ‘gig’ comes from musical jargon and refers to the short performances performed by musical groups, colloquially known as ‘bowling’, and very frequent during the summer.

Taken into the world of economics, refers to a model based on small orders or on demand. A new economic model that is particularly favored by the spectacular development of information and communication technologies, and by the definitive consolidation of digital platforms.

The gig economy and its impact on the labor market

With exponential growth and with many undoubtedly innovative applications, the gig economy can be compared to the work of a ‘freelance’ or a freelancer, since it consists of accept orders of a specific duration and without exclusivity with the contracting company. It promises flexibility, online communication, telecommuting, and offshoring. In other words, the possibility of working for a company that is thousands of miles away.

The gig economy also has its impact on the labor market by favoring sporadic jobs, of reduced duration and in which the contractor is in charge of a specific task within a project. That is to say, a kind of contract for work and service that already exists in Spain, although carried out by workers who carry out an activity on their own.

Companies, especially startups, found that the Internet and smartphones made it possible to assign jobs almost automatically to the most willing worker (This is what Uber does with its drivers, for example) or dividing complex jobs into small tasks to be carried out by an army of online workers (as is the case with Mechanical Turk).

The Gig Economy in America

The gig economy was born in the United States in the midst of the crisis generated in the summer of 2007 by subprime mortgages. The need for a change in the economic and labor paradigm promoted the birth of this new way of doing business. Currently, according to a McKinsey report, between 20 and 30% of the workforce in the United States participates in the gig economy in its different degrees.

One of the most successful platforms in the North American country is TaskRabbit. Specialized in household tasks that include moving, electrical installations or making the purchase, connects clients with workers. These can respond to a client’s offer for a specific project, and can also be contacted directly by the user according to their profile.

In Spain, the regulation around the gig economy is established by the self-employed regime. In fact, A person can be both self-employed and employed simultaneously when their working hours as an employee are full-time, or part-time of more than 50%. This situation is called pluriactivity.

Blockchain, Gig Economy and cryptocurrencies

For the gig economy, blockchain could provide security, transparency and control solutions to transactions that are still taking place.

For example, ‘freelance’ job search platforms such as Coinlancer or Ethlance have incorporated blockchain technology to add transparency to the economic transactions carried out between client and employee. In both platforms the projects are remunerated through cryptocurrencies: Coinlander has its own digital currency (CL tokens) while Ethlance uses Ether, the cryptocurrency of Ethereum.

The impact of the gig economy on our work

The kind of gig economy represents for many people the possibility of achieving a better work-life balance. Undoubtedly, it has many advantages both for companies (which only pay for the hours actually worked, the ‘productive’ ones) and for workers, who are given time and work flexibility that allows them to match their skills with specific projects.

In any case, the income of the worker depends to a large extent on the projects in which the worker participates, and vacations are reduced to moments of inactivity, which are not always possible.

Is the Gig Economy for everyone?

In 2011, Mashable news portal journalist Sarah Kessler signed up for every gig economy company she found. “I signed up for thirty or forty applications,” he says in his book ‘Gigged, the end of the job and the future of work’, published in 2018. In it, he describes the experience of half a dozen people currently working on sporadic assignments ranging from transportation service to office cleaning, through telemarketing or identifying traffic lights in photos.

One of them, Curtis, a computer programmer, highlights your satisfaction because “he chooses when to work and the programming projects that interest him” without having to suffer “the feeling of instability”. Kessler acknowledges that his situation is made possible by his college education in a high-demand, high-fee profession, such as a programmer, to “build his own safety net.”

The rest of the interviewees opted for the gig economy due to the lack of conventional jobs.

Business opportunities

There are various sectors of activity that have found important business opportunities in the gig economy, for example insurance. In the United Kingdom, Zego offers insurance that begins to cover the worker from the start of the application and until it stops.

In Toronto (Canada), Aviva has designed a more sophisticated policy for Lyft drivers (Uber’s great rival): a first phase is activated when the application is turned on; the second (with greater coverage) begins as soon as you accept an order; and the third, more complete, from when the passenger gets in the car and until he gets out.

In short, it seems that the gig economy is here to stay. Its impact on the labor market is already more than palpable, but it is hoped that this new model of doing business will continue to consolidate in the future.

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