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Is the gig up? Find out how algorithms and AI are shaking up the gig economy.

If you’ve ever used an app to hire someone’s services, you’ve helped fuel the gig economy. In this digital age, that’s practically all of us: tapping on our smartphones to order groceries or takeout, find a dog walker or a plumber, or get our house cleaned. 

The gig economy has given customers more choices and workers more job opportunities globally. It has certainly made life more convenient for many of us. But has it come at too high a cost? In this article, we look at how the platform-based, human-driven gig economy has sparked debates on labor policies, the use of artificial intelligence, and data regulation. 

Gig economy 101

The Cambridge English Dictionary defines “gig” as “a job, especially one as a performer or one that lasts only a short time.” Many believe the word originated from 1920s jazz musicians in the United States, slang for a paid musical performance. 

A century later, we’ve come to associate the word with a labor market that matches short-term, on-demand labor with a worker through digital platforms such as apps and websites. 

These jobs can be online-based tasks that are completed virtually, like translation, financial services, or software development. There are also location-based tasks that are done in person, such as product deliveries, taxi services, home repair, and caregiving. 

A majority of workers in the gig economy are classified as self-employed or independent contractors because they are generally paid per task, allowing businesses to minimize costs and expenses such as large offices and employee benefit packages. 

For gig workers, independence and flexibility can be a big draw, especially if it’s a source of secondary income. And if your specialty is an online-based task, cloud and mobile connectivity can help you reach a global market. You can be a graphic designer based in Southeast Asia creating a brochure for a business in Europe, for example. 

According to the International Labour Organization (ILO), there has been a fivefold increase in the number of digital platforms in the past decade. In 2019, it generated global revenue of at least USD 52 billion. 

But as more people have joined gig economy platforms, labor supply has exceeded demand, pushing down earnings. This increased supply of labor also reduces the power gig workers have to negotiate with clients. The lack of legal employment status may bring the benefits of autonomy and flexibility, but it also means no benefits, labor rights, or worker representation.

The algorithm of work

At the heart of the gig economy are algorithms that digital labor platforms use to manage, approve, and match workers for whatever service it offers consumers. The rationale behind using algorithms is to make work processes more accurate, unbiased, and efficient. 

To match a worker with a client, algorithmic matching uses metrics such as client or customer reviews, ratings, the rate a worker cancels or accepts jobs, and worker profiles. 

Algorithmic management is vital to digital labor platforms, but it can harm a worker’s quality of life and rights. Since workers’ acceptance and rejection rates are a metric for algorithmic matching, it limits their ability and freedom to reject work. 

“When I decline a request for a ride, my acceptance rate decreases and the app sends fewer trips in the future,” a male survey respondent on an app-based taxi platform in Mexico shared with the ILO.

"For me, the worst part was to tell me that I have a stopwatch running at all times, hours, and places, when I'm already being tracked by GPS systems, for my speed, etc.," food delivery driver Renan Rodrigues shared with DW. 

Algorithmic management of his workday created what he called “social stress.” Decorum flew out the window with every delivery, with Rodrigues barking at restaurant staff to hurry up. “It’s sad on a human level,” said Rodrigues.

Demystifying data

“When the employment relationship between the gig platform and the worker is executed through extensive data collection and analysis, employment rights become inextricably linked with the exercise of data rights,” says the Worker Info Exchange in its report, Managed by Bots: Data-Driven Exploitation in the Gig Economy.

“Gig platforms assert control over workers by maintaining an informational asymmetry, and data access can provide a means of exposing the power (im)balance generated by the informational gap between gig platforms and their workers,” says the digital rights NGO.

Algorithms may dictate the days and nights of workers on gig economy platforms, but access to this data is limited. Many are hoping to change that.

Drawing from his own experience working for a delivery service, Dan Calacci a Ph.D. researcher at the Massachusetts Institute of Technology (MIT), specializes in building tools for gig workers to collect data about their working conditions and pay, and compare it with their peers. 

“I’ve been on the side of being at the mercy of these decision-making systems [choosing] when you’re going to be able to make your next buck,”  Calacci shared with Tech Monitor. 

“If you’re suspicious that the processes that give you work or pay are unfair…you have no recourse in even understanding if that’s the case, because it takes a lot of work to collect that information in the first place if you’re just an independent person trying to figure out if your pay has changed,” Calacci continued.

In Europe, workers are taking some of their power back. In 2021, the Italian Data Protection Authority fined Deliveroo EUR 2.5 million for failing to comply with transparency requirements about the algorithms used for assigning orders and booking the work shifts of its riders. The EU Parliament has adopted a negotiating mandate for talks on measures to improve conditions for gig workers and address algorithmic management. In the United States, the Department of Labor has announced a proposed federal rule that would make it more difficult for companies to treat workers as independent contractors. 

Making it work

The gig economy is rich in diversity, from the type of tasks and services it offers to where businesses operate. Gig workers themselves have different motivations and levels of commitment. Finding the balance between job flexibility and job security, a worker’s autonomy and rights, is integral to empowering workers while ensuring business growth. The gig economy is here to stay, bringing productivity, employment, and innovation. But these gains must not come at the cost of gig workers not getting a fair deal. We need transparency, accountability, regulation, and fair work practices to make the gig economy work for everyone.

 

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