Seven ways online platforms have changed how we work

Blog posts

26 Jul 2018

Rosie Gloster

Rosie Gloster, Senior Research Fellow

The technological and communication tools that we use to work have seen phenomenal advances in the fifty years we have been researching employment policy and practice here at IES. It’s evident even in our own offices: we have moved from a time of typewriters and a reliance on the post, past faxing, floppy disks, dial-up, through to the smartphone that most of us have today. This interconnectivity has enabled organisations to interact with customers and workers in new ways; and has given rise to the so called ‘gig economy’. Online platforms, such as Deliveroo and TaskRabbit, make it easy for workers to be rapidly matched to customers on a short-term and payment-by-task basis, creating real-time marketplaces.

The gig economy is a rapidly expanding way of working, as is self-employment more generally. A study for BEIS estimated that 4.4 per cent of UK population aged over 18 (approx. 2.8 million people) had worked in the gig economy in last 12 months; another estimate put the figure at around 1.1 million people. However, as recent IES research highlighted, only a proportion of the 4.8 million self-employed workforce find work through such platforms. Indeed the debates around the gig economy in terms of the quality of work, its pay, and the degree of dependence on specific platforms – and whether this is in fact close to employee status – also apply to the experience of the self-employed workforce more generally.

Individual stories of self-employment have always been varied, so against this backdrop, how have online platforms changed the way we work? Our large scale qualitative study of individuals’ experiences of working in the gig economy identified seven key ways:

1. Accessible flexibility

Flexibility was seen as the main benefit of working in the gig economy, and many interviewees said they worked through platforms because traditional forms of employment were not suitable due to their personal circumstances, such as caring responsibilities or managing a health condition. Many gig workers enjoyed setting working hours, deciding whether or not to accept work at short notice, and had freedom over how much work to take on and when.

2. More intense competition

Manyindividuals, especially those providing short and administrative office tasks remotely through online platforms, were in direct competition with workers from across the globe. The scale and intensity of competition can make it incredibly challenging to secure work. Some workers in our study felt it affected their rate of pay, which they lowered in order to try to win work. It also affected the pace at which they felt they had to respond in order to secure work, one respondent commented: ‘If you don’t respond quickly enough, you don’t win the work.’

3. Easy offering of short tasks

Platforms have made it easier for customers to request the supply of very short tasks. The shortest of these involve ‘clickwork’; online tasks paid per click. Other short tasks, such as those undertaken by delivery drivers, included making a food delivery taking just a few minutes. The platform technology facilitates being paid on a ‘piece work’ rate, as well as small tasks being offered to the marketplace. 

4. Improved personal safety

Some drivers and riders said that working through platforms meant they no longer carried cash, because customers paid via the platform. The platforms also made their customers more identifiable through bank accounts and social media profiles, which gave the drivers an improved sense of personal safety.

5. Removing gatekeepers to finding work

Workers in many sectors, especially creative, professional and high-skilled work, created an online profile, and saw this in terms of ‘being their own agent’. Many workers said they could advertise their services and expand their client base through the platforms, and in some cases could do this with a more level playing field than through agents. For example, some drivers felt that allocation of work through the platform on a ‘nearest car to the fare’ basis was fairer than having work allocated by a call-handler, and in the creative sector some workers felt there was greater and fairer access to work through the platforms than via traditional agents.

6. Being publicly reviewed

Most platforms ask customers to rate workers. This rating is then available for future customers to see via their profile. Drivers for Uber explained that feedback and ratings could be used to manage and reward their performance, for example through bonuses, or in extreme, negative cases, no longer being eligible to work via the platform. Individuals were very aware of their rating and keeping it high, as it was important to their ability to secure future work. The response to the Taylor review recommended that government should encourage platforms to enable individuals to carry their approval ratings with them when they move platform.

7. Further blurring the lines between employment and self-employment

The dependence on one client versus working for many is a key distinction between employment and self-employment. Much of the debate about the gig economy has been around the blurring of these lines. Many online platforms are household names, visible to the public and operating on a large scale and there is a tendency for workers doing some tasks to only work via one platform. This creates a form of dependency and the government response to the Taylor review therefore suggested a new employment category of ‘dependent contractor’.

Platforms create a real-time marketplace, which is accessible to many workers who find it difficult to access traditional employment. The gig economy enabling people to work who may otherwise have been economically inactive is likely to be a contributing factor to the current 40 year high employment rate. Some aspects of platforms, such as intense competition and the easy breakdown of tasks, create downward pressure on pay, and individuals working in the gig economy may find themselves working for less than the national minimum wage. In addition, many gig workers did not invest in their training and development which in combination with low pay could mean that this new form of working may contribute to the UK’s productivity problem in the long-term. Additionally, these workers tend to save less towards pensions, and this too may create issues for the future.

Looking forward, there will be winners and losers from platform working. The challenge for government is how best to regulate to protect vulnerable workers and those dependent on specific platforms, whilst not stifling the flexibility and freedom they create for others. At IES, we will continue to use evidence to inform the ongoing and passionate debate about the precariousness and flexibility that platforms create in the labour market.

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.