What Is Gig Economy?
Know what is the gig economy and how it works.
Almost every day, we come across people who deliver our meals to our doorstep, drive us from home to our workplace or maybe do household chores. All these people are part of the gig economy. This is a term that we have been hearing a lot lately. However, have you wondered what it means?
In this article, we will talk about the meaning of the gig economy, know who a gig worker is, and discuss the advantages and disadvantages of the gig economy. Let’s get started.
Gig Economy- Meaning
The gig economy is a workforce environment that consists of flexible and short-term jobs offered by organisations to independent contractors and freelancers. Here, organisations can benefit by saving costs on employee benefits, payroll expenses, etc., while gig workers can benefit by having multiple sources of income from various ‘gigs’ and get the flexibility to work from anywhere. Synonymous terms for gig economy are freelance economy, sharing economy and access economy.
In India, companies like Swiggy, Zomato, Uber and Ola are some of the main sources of the gig economy.
Who Is A Gig Worker?
According to the Code on Social Security, 2020, “gig worker means a person who performs work or participates in a work arrangement and earns from such activities outside of a traditional employer-employee relationship”.
Essentially, gig workers are people who take up short-term employment offers. They can be freelancers, independent contractors, on-call workers, etc.
How Does The Gig Economy Work?
Though the gig economy includes various industries, the concept of how it works remains the same for everyone. Here, a gig worker will complete a specific assignment in a short period in exchange of a payment. These assignments could be delivering food, driving a family from one place to another, walking a dog, etc. Once the gig workers complete the assignment, they will move on to the next project.
Pros Of The Gig Economy
Flexibility
In the gig economy, a gig worker has the flexibility to choose where to work, when to work, and how to work. In some cases, they can also pick their own client base and fix their own rates.
Independence
Since gig workers do not need to work under someone’s direct supervision in an office, they have the independence to complete the projects on their own.
Variety
Unlike a classic 9-to-5 job, in a gig economy, workers have the opportunity to take up multiple projects with different clients, providing themselves with the option to work with various types of companies and industries
Cost-saving for businesses
For business owners, hiring freelancers is a cost-saving alternative as opposed to hiring full-time employees, as they do not have to spend on providing the gig workers with employee benefits, office space, equipment, etc.
Cons Of The Gig Economy
Inconsistent income
Unlike a full-time job, a gig economy does not offer consistent income as the amount of work available may not be the same every month.
Lack of employment benefits
In most cases, gig workers are not offered employment benefits like corporate health insurance coverage, retirement benefits, etc.
Additional expenses
Gig workers are not provided with any infrastructure or equipment by businesses. They will have to purchase and maintain their own tools for work like laptops/computers, smartphones, vehicles, etc.
Suggested Read: Gig Economy—How Deep Is The Discontent?