The On-Demand Gig Platformers
Contingent Workers
The rapid adoption of 4G networks, mapping software, and GPS tracking has created a new workplace economy that was never previously possible. With a mobile phone in hand, ICs can access on-demand work wherever they are. Before looking further into the technology enabling this emerging economy, it is important to look at the characteristics of on-demand platform work.
Characteristics of an on-demand gig platformer
On-demand gig platform work differs significantly from the traditional freelancer work although they are often lumped together as part of the same gig economy. It is helpful here to distinguish how the on-demand gig platform is different from the traditional freelancers.
Low differentiation of labour
- Independent contractors entering work agreements with on-demand platforms generally provide lower skilled commodity labour services. These services can include driving vehicles, delivering packages, or cleaning. These services are often repetitive and are at risk of being replaced through automation in the future.
Full time and supplemental employment
- The low barriers to entry on these gig platforms means that a diverse workforce will fulfill jobs. According to a study conducted by McKinsey, over half of the ICs using on-demand platforms do so to earn supplemental income while holding another job while the remainder relies on on-demand platforms as their main income source.
How on-demand mobile platforms work
Step 1: Register on the website.
Step 2: Depending on the platform you may need to go to an interview, information session, or submit required documentation.
Step 3: Log onto the App and accept your first job
Step 4: Complete your job
Step 5: Your pay will be transferred to you without needing to deal with any money
Examples of on-demand Gig Platformers
Transportation services
The pioneers of the on-demand gig economy are the transportation services like Uber and Lyft. These companies have muscled their way into a taxi industry once protected by government regulation. In NYC, Uber and Lyft have driven down the value of taxi medallions from over 1.3 million in 2013 to as low as 160 thousand.
Delivery services
Another industry heavily impacted by on-line gig platforms has been the delivery industry. Food delivery cyclists clad in pink Foodora jackets are a common sight in many large cities. Amazon has launched Amazon flex program in an effort to use ICs to fill their “last mile” of delivery.
General Labour services
These on-demand platforms provide services that range from general handyman tasks, moving, furniture assembly and installation. Task Rabbit was recently purchases by IKEA which goes to show just how much help some people need when assembling their furniture!
Travel and hospitality
Along with Uber, AirBnb was one of the early innovators in the on-demand gig economy. Homeowners could rent extra rooms, full apartments or even houses for extra money. AirBnb has come under recent criticism for their contribution to reducing available long term rental stock in many large cities.
Current issues with on-demand gig platforms
The current size and growth of the gig economy is still in question. Depending on study and what is included, researchers rarely come to the same conclusion about the impact of the gig economy. There seem to be an equal number of studies detailing a booming gig economy as there are stating that the gig economy has been overstated. In truth, there isn't much consensus as to the overall size of the gig economy.
Another issue for gig platforms are the inadequate legal frameworks in place. The growth of the on-demand platforms may have initially been due to their ability to circumvent costly regulations. Uber drivers did not need to pay inspection or licensing fees and AirBnb operators did not require tenants to pay hotel taxes. Quickly, legal frameworks are being put in place which could jeopardize some on demand services although businesses such as Uber and Lyft are fighting back.
Finally, there have been protests regarding a system which places most of the inherent risk of downtime and a lack of social welfare benefits (unemployment, health care) on the IC to the business’ benefit.