The challenge of the concert economy

The odd-job economy has been a driving force in shaping the future of work. Its unique employment relationship characteristic disrupts traditional working methods in many ways; since there is no employer-employee relationship, gig workers are not beholden to any particular employer and therefore have more flexibility in terms of the work they can choose and the hours they devote to it . Businesses enjoy similar flexibility when they are not dependent on a set of employees for the performance of tasks, and further benefit from avoiding the cost of social security and fixed compensation that are provided to them. an employee. However, the concert economy has garnered praise and anger in equal measure. While this seems like a win-win situation for both parties, the reality on the ground is often more complicated.

Over the years, the growing popularity of platform companies has occasionally been accompanied by pockets of protest from their workers – primarily those who work in taxi and delivery services. In India, the grievances mainly concerned pay and working conditions.[i] According to concert workers in India, the low pay often causes them to work more than 8 hours and work every day of the week.[ii] However, it is the very model of the odd-job economy that exposes workers to such vulnerabilities, as a company cannot be held accountable if workers are not employees. This raises questions about the ethical basis of the odd-job economy and requires further study of its overall structure.

First of all, there is a distinction to be made between the gig economy and platform companies. According to the World Economic Forum, the odd-job economy is defined by the focus on participating in the labor market and generating income through “odd jobs,” projects or one-off tasks for which a worker is hired. . On the other hand, platform companies serve as marketplaces where sellers and buyers can be matched. This can manifest itself on platforms like Amazon where the transaction takes place between buyers and sellers of goods, or platforms like AirBnB where hospitality and not physical goods are the commodity and no transfer of ownership takes place, or platforms like Upwork, Uber and Practo where users are matching the services they need. The last category corresponds to the economy of concerts.

Digital technology has popularized working together on platform, as it has enabled companies to take advantage of working together to provide on-demand services to users. Instead of hiring employees to provide services to users, the platforms act as a bridge by facilitating transactions between sellers and consumers, thereby reducing transaction costs for both parties without incurring any costs of retaining employees for themselves. For example, a taxi driver looking for clients would better benefit from an app like Uber that instantly connects him or her to someone looking for a taxi, rather than driving aimlessly looking for one himself. Likewise, for the user, it is easier to book a taxi through a platform like Uber rather than waiting for a taxi to pass.

Platform-enabled gig workers can be categorized into highly skilled gig workers and low-skilled gig workers. Apart from the different skill level offered by the two, a major difference is that highly skilled workers outnumber temporary low-skilled workers and therefore have more bargaining power than the latter in the labor market. This is why the problems of the odd-job economy focus on low-skilled workers or blue-collar workers, and when questions about the odd-job economy are raised, the questions are actually about the part that is. address to blue collar workers.

The fundamental concert economy offers a way of working that works for everyone involved, but it’s when the power dynamic kicks in that the delicate balance is upset. From a worker’s perspective, being an employee leads to more rigidity in working hours and pay, while the odd-job economy offers more options for work assignments and payment offers. , more flexibility in working hours and more freedom to switch from one task to another. . However, when the labor supply is high and more available, as in the case of blue collar workers, temporary workers have no power to influence payment offers, and the freedom to choose only becomes ‘An illusion. In the game of supply and demand mechanisms, gig workers are always the losers. So, as platforms become more popular among concert workers, more of them are joining the pool, reducing their own pay.

However, the concert economy still has a lot to offer. In a country like India where informal labor agreements dominate the economy, many blue collar workers already work in precarious conditions, face income insecurity and have no job stability. In comparison, the economy of concerts is a better alternative. As well as having a system in place that is fairer than informal working arrangements, it is also characterized by ease of entry. Informal networks in the informal economy that can create barriers to entry for foreigners do not exist in the odd-job economy. The concerts were also a source of additional income for those facing economic hardship and helped them until they could find employment opportunities. For the Indian economy too, the odd-job economy is responsible for a huge proportion of job creation, which is only expected to increase in the years to come.[iii]

Therefore, the odd-job economy has its pros and cons, and the benefits it brings to the Indian economy is forcing policymakers to reduce the cons. However, the heterogeneity of working together on a platform and the ambiguity of its working relationship escape regulators around the world. The meager pay and poor working conditions often lead policy makers to demand that concert workers be labeled as employees, but this wipes out the gig economy altogether rather than solving the problem.

The main problem with the odd-job economy is the employment relationship, which needs to be more clearly defined. Most of the time, it’s the ambiguity around workers’ rights and platform responsibilities that allows companies to treat their gig workers like employees in terms of the control they have over them, but without the cost of hiring an employee. As a result of this arrangement, the workers get the short end of the stick. If concert workers are called partners instead of employees, the right questions to ask are whether workers have a say in the compensation they receive? Do workers have sufficient flexibility to accept and reject the offer of their services without any ramifications? How is the responsibility for the services shared between the platform and the worker? In reality, the answers to these questions evolve with the skill level of a worker on the job, and that is a prerogative of the platform in the case of low-skilled workers. Therefore, policymakers need to answer this crucial question in order to delimit the employment relationship in the odd-job economy, and to regulate it as a first step.

Although regulation is seen as well-known by companies, the right regulatory instrument can stimulate innovation. In these times when technology is enabling disruptive innovation at an unprecedented rate, it’s safe to assume that innovators can always find a way to turn a problem into an opportunity. In the absence of regulations to control the platforms that allow pay-per-view work, they can fall into complacency and seek to increase shareholder value in ways that may compromise the well-being of workers who have no power. to exercise in the relationship. Finally, if a company cannot survive without putting the rights of its workers on the back burner, then there is little justification for its creation.

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[i] Salve, P. & Paliath, S. (June 2019). Workers in India: overworked and underpaid. Indepense. https://www.indiaspend.com/indias-gig-workers-overworked-and-underpaid/

[ii] Tata Institute of Social Sciences. (2019) Understanding Food Delivery Platform:

Point of view of delivery people. https://tiss.edu/uploads/files/Online_Food_Delivery_Platform.pdf

[iii] Boston Consulting Group. (2021). Unlocking the potential of India’s gig economy. https://media-publications.bcg.com/India-Gig-Economy-Report.pdf

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Amit Kapoor is President, Institute for Competitiveness, India and Visiting Fellow, Stanford University.

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