In the context of the sharing economy, many digital platforms, through crowdsourcing and on-demand hiring, have revolutionised how services are provided.
This article is based on research by Anna Ginès Fabrellas
Jobs traditionally done by workers have been replaced by very short-term work carried out by supposedly ‘self-employed’ workers. These ‘self-employed’ workers are not covered by many of the legal protections afforded by labour law to regular workers.
In her research, Esade Assistant Professor Anna Ginès looks at 10 challenges that platform work poses for the Spanish legal-labour system and analyses the impact of these business models on labour relations.
What is the gig economy?
The gig economy is an economic model based on the exchange of resources, goods and services among each other. It is carried out through digital platforms.
This model has generated debate about its impact on the labour market, as many platforms have used this model to develop outsourcing schemes, transforming traditional jobs into temporary or on-demand jobs. This sometimes leads to a lack of labour rights.
Differences between the circular and gig economy
Although the circular economy and the collaborative economy may seem very similar concepts, they have different approaches.
The circular economy seeks to minimise waste and maximise the use of resources through recycling and reuse. So the focus is on sustainability.
In contrast, in the case of the gig economy, the focus is not so much on making consumption more efficient, but on the exchange of resources between users and digital platforms.
1. Delimiting the phenomenon
The gig economy has opened the door to globalised human relationships that previously could only be generated within small communities, such as family, friends, neighbours or acquaintances. This type of economy encourages the exchange and sharing of resources, thereby offering benefits of the collaborative economy, such as access to services in a more efficient and cost-effective way.
Platforms such as Uber, Deliveroo or Amazon Mechanical Turk, although they are usually examples of the gig economy, they diverge from the traditional concept as they develop real businesses based on saving labour costs through outsourcing.
2. Delineating the current business model
Through the intensive use of new technologies, these digital platforms have been able to develop a business model that completely outsources the services they provide.
This is possible by reducing the service to the level of micro-tasks and crowdsourcing it to a sufficiently high number of external workers using an on-demand hiring system.
Digital platforms operating within the gig economy claim to be mere technology companies
3. Determine if the digital platforms are technological companies or service providers
Digital platforms operating within the framework of the gig economy claim to be mere technology companies, but the European Union Court of Justice recently stated that one of its paradigmatic companies – Uber – must be considered a service company.
The boundary between the two concepts is a fuzzy one, hence the need to study each case.
4. Update the legal classification of the relationship between service providers and digital platforms
New forms of work emerging within the framework of the gig economy do not fit well with the traditional characterisation of employee.
Nevertheless, one needs to take indirect business control formulas into greater account in work assignment, work performance and market control.
5. Take indirect business control into consideration
While working for digital platforms may seem like an independent option, there are downsides of the gig economy, such as disguised subordination. Factors such as time allocation, performance monitoring and pricing demonstrate that these platforms maintain indirect control over workers.
In digital platforms, workers assume the costs of the service
6. Resizing market intervention
In digital platforms, workers assume the costs of the service, use their own infrastructure and means of production and receive an economic benefit directly related to the quantity of services provided.
But these workers lack an autonomous business organisation to determine the terms and conditions of the service they offer and to set the corresponding prices.
7. Setting fair working conditions in terms of working time and salary
Although flexibility can be perceived as one of the advantages of the gig economy, the use of ‘zero hours’ contracts creates a precariousness of work that should not be ignored. It is crucial to ensure that workers have access to fair working conditions.
Treating workers in digital platforms as employees will not solve their problems
8. Guaranteeing workers’ collective action rights
Treating workers in digital platforms as employees will not solve their problems as the geographical dispersion in performance of work, the discontinuity in the provision of services and the high turnover of workers makes it difficult for them to exercise collective rights.
Virtual forms of participation are needed, along with electronic voting systems in union elections and forms of virtual action (for instance, the disconnection of the platform), to guarantee the collective rights of such workers.
9. Disassembling the need for a third category
Given the supposedly unclassifiable work in digital platforms under current law, one strand of Spanish labour doctrine suggests the creation of a new category for workers in platforms.
However, drawing up an ad hoc regulation would only protect the business interests of a sector that is ruthlessly exploiting the competitive advantage conferred by the fraudulent use of self-employment to save labour costs.
10. Expanding the boundaries of labour law
Labour law must widen its bounds (both legal and financial) to include all forms of dependent work. The concept of employee must take into account the new digital environment to replace legal dependence with financial dependence.