A few years ago it was being touted as the future of work. In part a response to the threat of globilisation to traditional forms of employment, in part an entrepreneurial use of new technologies; the ‘gig economy’ was meant to herald a new round of prosperity across the developed world. As Larry Alton at Forbes observes:
“Companies like Uber and Airbnb have made it more possible for practically anybody to make a steady stream of income on a remarkably loose freelance basis, and thanks to advancements in communications technology in general, even traditional corporations are relying more on remote workers and freelancers to handle their ever-increasing workloads.”
In the UK a large part of the army of self-employed workers derive their incomes from the gig economy. This isn’t just people driving for Uber or renting rooms via Airbnb. A host of highly educated designers, writers, composers, programmers, etc. have also embraced freelancing as an alternative to regular employment. But all of this could be threatened if the Internet-based platforms that facilitate the gig economy turn out to be grossly overvalued:
“What if it’s too good to be true? What if we’re putting too much emphasis on the possibilities here? What if we’ve actually created a “bubble” for the gig economy idea, and that bubble is about to burst?”
According to Alton there are three key threats to the gig economy. First, there is the media over-hyping of the term itself, leading to over expectations of what this sector of the economy can realistically return in the way of profits. Second, there is the growing threat of law suits, most notably where gigs fail to produce the promised results. Third, gig economy workers are beginning to work collectively to improve their income and employment conditions. Minimum wage legislation has already allowed groups of gig workers to establish a right to a minimum payment. But if this extends further, it could undermine further investment in the gig economy as a whole:
“With these threats in place, it seems reasonable to think that the gig economy could see a massive slowdown—if not, exactly, a burst—in the near future.”
Alton argues that despite this, the gig economy will continue in the short-term simply because too many people depend upon it for it to disappear overnight. However, by the end of the decade we are likely to see much greater regulation of the sector with the result that much of the hype will disappear and much of the air will disappear from the bubble.