MARKET | Aug 30, 2018

Back2basics: Gig Economy

The meaning of the words "Gig Economy"

Words are important. They are all the more so when hypotheses are defined, scenarios (perhaps political) sketched and choices (even economic ones) made on the basis of them. For this reason it is essential to attribute the right meaning to every word. In actual fact, too often the desire to simplify on the one hand and the inability to grasp the complexity inherent in phenomena on the other lead to wrong conclusions. This is the case, for example, of the tendency to treat the concept of Sharing Economy and that of Gig Economy as synonymous: these are profoundly different concepts but, for a thousand (bad) reasons, as many legislators from all parts of the political spectrum as latest self-styled experts treat them as if they were the same thing.

If we talk of Sharing Economy, we can say that the concept of sharing economy is articulated, multifaceted and complex, but it is based on the general idea that the value of possession of goods, skills, means of production or other can be shared – thanks to widespread software platforms – among multiple players. As if to say, by way of simplifying, that we do not need the drill but the hole it makes. With the obvious consequence that more than everyone being owner of a drill used 10 minutes a year, in those 10 minutes we should all be able to have access to a shared drill.

And the Gig Economy?

The concept of “odd-jobs economy” was born in the United States where it has always been common practice for young people and students to “supplement” their income with small jobs, such as cutting lawns or – to cite an example that could only exist in the States – selling lemonade on street corners. It is not a phenomenon born of the Internet, nor is it generated by the network. However, the network has enabled industrialization of the approach thanks to software platforms developed to bring together supply and demand.

Nevertheless, the availability of systems of structured matching between supply and demand, combined with a changed context scenario, has created a significant discrepancy: what happens when a model conceived in a given economic context and with certain characteristics moves towards a completely different context? What happens if the odd job done by the college student over the weekend becomes or is likely to become a structural type source of income? What happens if the concept of occasional work risks becoming a dangerous substitute for flexible work?

What happens is that something begins to not function. So much so that not only in Italy, but also in the United States, the very meaning of the term Gig Economy is progressively changing.

And thus odd jobs risk no longer being just those done by any college student whatsoever to pay for their holiday, but those that people are forced to resort to when “work” – of the real type – can no longer be found. And so the Gig Economy becomes that which is used to indicate not only “occasional odd jobs”, but all those jobs that fail to express sufficient protection of the worker, to the point of requiring redefinition of the term work.

In regulating the odd-jobs economy, therefore, it is important to understand if there is an attempt to give a system of rules and protections to an activity carried out “to make ends meet” or if that activity carried out to make ends meet does not risk becoming something else. And doing so is also a prerequisite for understanding what kind of protection should be sought, because if it is right and proper to think that even in the delivery of a single pizza the person performing that activity should be paid and protected, the search for relationships of dependence or subordination risks overturning the sense of a model making it unsustainable. In short: today, the Gig Economy lives in the dangerous limbo that confuses the concept of protection with that of stabilization.

So what do the sharing economy and the odd-jobs economy have in common?

Nothing, except that both phenomena share the use of software platforms that regulate and manage relations between the parties. It is no coincidence that there is increasing talk of Platform Economy: also in this case trying to put into a single cauldron phenomena that have little in common other than recourse to the network as an instrument of contact.

This is like trying to unite the business model (and consequent regulations) of a consulting firm and that of a clothes shop because they both use the same accounting software. And when this reasoning is done by those who should regulate them both the problem is serious.

Stefano Epifani