The gig economy good or bad? Either way, it’s a life changer…

Not fitting in is quite possibly your greatest strength...

By Neil Patrick

Actually it’s a case of angels and demons…

First the demons:

What do you think of when someone says ‘gig economy’? Perhaps it's Uber drivers. Or zero hours contracts. Or people selling their services on Fiverr.

It’s true that these are all aspects of the gig economy. But they are not THE gig economy. I don’t even like the term. I much prefer the expression coined by a friend of mine, Laura Degiovanni at TiiQu. She describes something she elegantly terms, ‘the fluid workforce’.

The fluid workforce describes the aspiration of businesses and skilled workers alike to shift from permanent employment in jobs, to a flexible pool of people which adapts and evolves more quickly to better fit the ever changing requirements of organisations.

This is a natural and logical reaction to a world where change is forever accelerating. Contracts are specific and time bound. And pay is often higher than it would be for a permanent position, because many or all of the overheads of a traditionally contracted full time employee are absent.

At least that’s the theory. The reality for most gig economy workers however is that the unscrupulous have been faster to adopt this new idea than larger and more established organisations. The latter are rarely at the forefront of change because they are more complicated organisations and want more checks and balances. So they are moving, just not very fast.


The myth of tech and a better society

Here’s the rub - the mainstream Uber-teched gig economy is something which does very little to enable most people to prosper. It’s currently more like the bottom rung of the labour market. One where long hours, harsh terms of employment and tedious jobs are the norm. And if you work at Uber, according to whistle blowers, you can add gender inequality, sexual harassment and bullying to that list.

I have never met anyone who said to me, “I love being in the gig economy because I am so well paid”. Much more likely is that the positives they will regurgitate are based around the PR about flexibility and freedom. That’s fine if your earnings are not that important to you. But last time I checked, most people regard pay as a pretty important thing.

NOT my idea of career fulfillment Photo credit: Hipsta.space

The Ubers, Fiverrs, AirBnBs like to describe themselves as disruptors. Radical rethinkers who are applying technology to build a better world for everyone. I don’t think of them in that way at all. I see them as micro-chipped buccaneers who are busy making a killing on the backs of low pay and sometimes even no pay. And thanks to their global internet-based business models, also able to dodge the usual obligations around everything from fair pay and conditions, to transparency and tax.

They don’t get investors buying in because of their radical and visionary improvement of the world. Those days disappeared after the 2000 dotcom bubble burst. Investors buy in because they see growth and profit potential; and if labour costs are low, the profit potential is high for whoever can secure sector dominance.

Low pay is not the only exploitative characteristic involved

Why pay little when you can get work done for free? Every time you post a review on Trip Advisor  about that restaurant or bar you just visited, you are doing their work for them. You might think it doesn’t take much time and you want to tell others so they know about your good or bad experience. But multiply this by a few thousand or million and suddenly, this amounts to a pile of free content acquired for absolutely nothing. Day after day after day...

Cheap and convenient means someone else suffers. Photo credit: LavaBaron

It echoes the old wave of self-service tech at the supermarket, petrol pumps, bank cash machines. These are all ways businesses have found to cut the cost of their services by getting us do their work for them – and it’s easy enough to persuade us to embrace the change when it delivers greater convenience for us.

So the gig economy is fast becoming in many people’s minds a place where career dreams are at best put aside, or at worst permanently laid to rest. But it doesn’t have to be like this…

Now for the angels

I don’t want to come over entirely negatively about this. There are some little niches of joy amidst all this low pay and mind numbing labour. I was recently working on a client assignment for a musical equipment manufacturer. Drums to be specific.

They wanted to upgrade their digital media and marketing strategies. I started looking at YouTube videos posted by drummers and drum manufacturers and compiling data about the views and subscribers. What emerged was that just like every product sector from cosmetics to fashion, cars to gardening, the biggest brands were being completely outgunned online by what I call the ‘boys (and girls) in bedrooms’.

In fact only three corporations rank amongst the biggest 500 YouTube Channels* Despite the multi-million budgets and expensive marketing consultants and agencies, the biggest brand in the drumming sector had less than 10% of the YouTube subscribers that the most successful YouTube drummers had. This is a pattern which we see in just about every sector and every market.

The social media stars are not brands, they are people like you and I

This is a very different gig economy. One where people earn handsomely for doing something they love. And I am part of this as are many other people I know. Most however would never describe themselves as working in the gig economy. But that doesn't mean we are not.

A friend of mine has built a successful and very well paid career as an after dinner speaker and stand up comedian. He's found his niche and has a fully booked diary every week of takers all happy to pay him several thousand pounds for him to do a turn at their dinner or event.

Another friend of mine is an accomplished voice over artist. Their client list is global and includes some of the best known brands in the world. The work is highly paid and is so much in demand that this person is seriously thinking about quitting their 'proper' job so they can do this full time.

Journey found their frontman on YouTube
 Photo credit: Bob Larson/Contra Costa Times

In a more high profile example, the platinum selling band that is Journey found the replacement for their departed singer Steve Perry on YouTube. Perry’s replacement was a man called Arnel Pineda, an unknown singer from the Philippines, who had been posting his covers of Journey songs on YouTube.

These are all tales from within what we could call the gig economy. These gigs are potentially life changing for the better. Others are a return to Victorian workhouses.

In my next post about this, I’ll venture some thoughts about how we can fly with the angels rather than be devoured by the demons...


*Disney, Time Warner and Sony

Just how much disruption is good for us?

By Neil Patrick

There's a lot of  fog in Uber world...

This year, Yassen Aslam and James Farrar, have been busy taking on the might of Uber in court. Their grievance was that as Uber drivers, they were denied basic workers’ rights: no minimum wage, no sick pay, no paid holiday. An employment tribunal judge, Anthony Snelson, heard the case over several days in July, where they argued that this classification was both wrong and unfair. And yesterday at the end of the hearing, the judge agreed.

There has ensued a great deal of jubilation from other Uber drivers, trade unions and the political left. Personally I am also pleased at this ruling. But not because I am opposed to disruptive businesses per se. We need innovation in business, but this needs to be balanced with legal and statutory interventions which curb the tendency of new business models to become exploitative long before regulation catches up with them.

Business do what businesses do. They seek profits and growth. If we seek to regulate them such that they cannot innovate, the result is inevitably a bureaucratic free enterprise devoid climate in which progress and growth are suffocated. Think USSR and all those grey apartments and Trabants.

Self-employment is the biggest jobs growth trend in recent years. And I have jokingly referred to it previously as ‘self-unemployment’. But in this case, we are not talking about a new breed of Bransons, Trumps and Zuckerbergs, we are talking about people at the lowest levels of pay who are being forced by the absence of better options to take whatever they can get.

Such people are not hot-shot entrepreneurs. They are just people trying to feed their families. This is the terrible reality of the current gig economy. Business models like Uber grow fast because they design out the costs from traditional business models, leveraging scale and IT investments to provide a product or service cheaper than the competition. And much of this cost is cunningly passed to their workers.

It’s not unlike the off-shoring revolutions of the last 25 years. At first everyone is enthusiastic because, it drives down prices. And Uber make much about giving people freedom, flexibility and choice. But the reality is this is all PR spin. If you are paid even the new higher minimum wage in the UK, you will earn just £288 for a 40 hour week. Yet Uber was not even paying minimum wage. And it passed much of its costs to its drivers.

Uber position themselves as a plucky underdog, providing jobs for people on their own terms. It’s nothing of the sort. First Uber has a market cap of $50bn making it more valuable than Tesco and Barclays combined. Second, Uber manage their drivers just like employees. They are interviewed, disciplined, and submit to Uber’s rules just like any employee.

As Aditya Chakrabortty wrote today in the Guardian (rarely my favourite source), “For some Britons, self-employment doubtless means freedom. But for others, it means the freedom to be exploited, deprived of rights – and to be underpaid. According to recent research from the Resolution Foundation, the typical self-employed Brit is now earning less than when John Major was prime minister.” (that was 1990-97, in case like me you can’t remember dates).

This isn’t really the future. It’s the past. A regression to a world where labour exploitation is revived, cloaked in a bit of high tech ‘innovation’ and pitched to the world as progress.

There’s a world of difference between a self-employed person who is truly independent and a self-employed person who is freelancing through a global mega-corporation. The former is free to truly work on terms that they decide. The latter has no such choice.

It’s time that disruptive businesses thought a lot more strategically about their impact on the people that they use. And this judgement is going to force them to do that. It’s a small but significant step in the right direction.