We decided to look at the gig economy and try to answer this burning question.
Gig Economy: Tech Innovation or Human Exploitation: Where do we draw the line?
Technology has laid the foundation to catapult us into a global workforce of ‘giggers’, giving way to the emergence of the gig economy. A gig worker is a freelancer or independent contractor that, through the reduction of overhead costs and its competitive nature, can save companies significant amounts of money.
With the abundance of options for gig work across the globe–whether seeking to supplement a full-time income with contract work or fueled by intentions to leave the corporate parameters of work behind–it’s no wonder that 31% of the global population have taken to the Internet in search of non-traditional work contracts, including those in Southeast Asia.
According to KellyOCG, a talent outsourcing and consultancy group, in the Asia Pacific region alone, 84% of hiring managers outsource to gig workers. Globally, 65% of hiring managers say the gig economy is rapidly becoming the new norm for how businesses organise workflow, with 43% of global organisations who engage these part-time workers saying they save at least 20% in labour costs.
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There are new companies breaking their way into the app scene each day to try to capitalise on the gig economy and gain a footing in the market. These apps act as a go-between for communication and a delivery mechanism on web-based platforms making it extremely easy to connect businesses with the talent pool that can deliver the services they desire.
Are gig workers just another commodity on which companies capitalise, or is it a win-win situation for everyone?
Appeal of the Gig Economy
For companies, short-term, quick-labour has become a hot commodity often used to help start-up companies in the tech and app development industry keep their business models profitable. They have lower overhead costs by utilising telecommuting or remote workers for specific gigs where funding a full team of workers is financially impractical.
For gig workers, there are many benefits to the work structure. Most “independents” emphasise freedom and flexibility as their top reasons to seek this type of work. They get to choose when they work, where they work, and for whom they work, whether autonomously or through platforms such as Upwork and Fiverr.
However, not all gig work is created equal. Highly skilled freelancers such as web developers, designers, copywriters, or digital marketers have an advantage in their pay potential, freedom, flexibility, and workload. This is evident when compared to that of Southeast Asia where gig work is predominantly more labour-driven with the likes of on demand ride-share or food delivery web-based platforms for companies such as Grab or Go-Jek being a primary source of freelance work
Pitfalls of Gig Economy
As with any job, there are challenges and pitfalls. Along with contract or freelance work comes the challenge of self-employment, which typically requires one to be responsible for his or her own taxes and insurance. This can be a real concern for some contract workers that don’t have the ability or opportunity to bring in a full-time salary.
In Indonesia, people find it difficult to earn a full-time income due in part to the decline of retail and manufacturing sectors from regional competitors that have more efficient markets like Malaysia and Thailand.
Insurance is another expense with which gig workers are faced. Due to the cost, motorbike taxis and drivers par of Go Jek–a popular Indonesian rideshare app–resort to the risk of having no coverage at all. A one-time fine proves to be more cost-effective than paying monthly insurance premiums on a low salary.
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Southeast Asia also has its own set of limitations regarding the safety of workers and operating regulations. The rules are often ever-changing or insubstantial as is the case in countries such as Thailand, Malaysia, Indonesia, and Vietnam.
Although gig work affords contract workers freedom and flexibility, some people stake the claim that it exploits workers in underdeveloped nations. Labour laws are different in every country, and as unregulated as the gig economy is in Southeast Asia, gig workers are an easy target to be overworked and underpaid, possibly in unsafe working conditions. For example, in other Western countries like the UK, labour law or construction law affords workers more worker rights of protection for safety and insurance, whereas motorbike delivery riders in Southeast Asian countries do not provide any protection, nor are they required to.
In Southeast Asia, this is an issue as fair labour practices regarding pay often don’t meet the average costs of living standards. Indonesia is experiencing its lowest unemployment rate in 20 years with the help of the digital technology boom in the area. Yet, of the 127 million Indonesians who are working, over 30% are underemployed–working less than 35 hours per week–and locked in part-time contract jobs with low pay. They are classified as informal workers, many of whom fall outside labour law protections indicative of regulated industries. As a result, over 60% of the workforce in Indonesia do not pay taxes.
Future of Gig Economy
Undeniably, the evolution of technology has revolutionised the magnitude of how we relate to the world through digital communication. As humans, we all want to survive and as workers we all want to be successful–whether it’s simply to provide our families with food on the table and a roof over their heads, or where we can actively pursue a passion-driven career. Typically, we can all agree on those two basic desires regardless of our culture or geographic location.
With the inevitability of the gig economy’s continued rise, those two basic desires of success can be met on a massive global scale, and as the workplace evolves and we adapt to technology, both companies and workers will need to ensure the changing workforce evolves positively in conjunction with those desires.