When Is the Gig Economy Not the Gig Economy?

The “gig economy” has hit the global employment landscape fast and hard, particularly in the UK. Its rapid and relentless growth over the last couple of years has left the mainstream media confused and struggling to come to terms with this new way of working.

This confusion has perpetuated a negative impression of the gig economy, where all independent contractors are often portrayed as precarious workers or victims of exploitation working without benefits, employment rights and for unsustainably low wages. Uber and Deliveroo are the latest task-based apps to come under intense scrutiny in this area. Even Sports Direct’s use of zero-hour contracts is being dragged into the maelstrom of the gig economy conversation — even though zero-hours contracts are not self-employment.

Not all gig economy workers are the same. According to the RSA, the term “gig economy” refers to the “trend of using online platforms to find small jobs.” In other words, providing services on demand. Interestingly, in their survey earlier this year, they found 59% of freelancers “gigging” were providing professional, creative or administrative services. In comparison, only 16% surveyed were providing driving or delivery services.

This means that the vast majority of the 1.2 million people freelancing in the UK are debunking the myth that the gig economy means low-paid delivery or driving jobs.

In fact, according to the IPSE Freelancer Confidence Index report, the weighted average day rate for a freelancer is up to £525 per day, compared to £518 from this point last year.

Can we rename the gig economy? There’s no debating this way of working is here to stay. Accenture and Deloitte both predict 30% of the UK’s workforce will be freelancing or gig working by 2020. In the US, this will rise as high as 50% by 2020.

Changes in society’s attitude toward the workplace, technological growth and an increase in the number of freelance marketplaces, are all enabling people to choose how, for whom and where they work.

However, what does need to change is how we name or classify gig workers, independent workers and freelancers. It’s simply not possible to lump everything under the gig economy label — there are simply too many differences for it paint an accurate picture.

The danger of labeling all workers with the catch-all gig economy definition is that it becomes difficult to help those who are at risk of being treated unfairly.

For example, a self-employed management consultant charging a thousand pounds per day, is not the same as a freelance designer selling logo designs for a fixed price, who in turn, is very different from an Uber driver.

Dr. Richard A. MacKinnon from WorkLifePsych Ltd. supports the need to address this classification issue. “All the while we consider it one coherent phenomenon, which it is not,” he said. “We won’t be able to answer important questions about how contingent labor impacts people and organizations, how gigging professionals manage their career and well being and how organizations deal with larger numbers of contractors and giggers.”

In other words, the current definition is unsatisfactory when you take into account the scope and depth of the type of engagements. What we need is to break the gig economy into sensible segments and give each type of engagement its own definition. This would certainly help to identify and support those in precarious situations.

We may well be stuck with it now, but in many ways, it might be simpler if we could ditch the term ‘gig economy’ for good.


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