“Gig” economy is creating challenges for labor market. Independent working is insecure and offers workers less access to paid leave, sick pay or maternity leave along with training and career development (Dekker and Van der Veen) due to misclassification and social inequality 2.1. Worker misclassificationThe worker classification of an independent contractor has always been a vague determination, and “may very well have a different meaning in each of these contexts” according to Brian A. Langille & Guy Davidov.
Uber- a transportation network company argued that they are just digital platforms connecting drivers with passengers and these drivers are rather independent workers who use their software to operate their ride (Pfeffer-Gillett, 2016). According to Bernhardt, 2014; Hill, 2015; Irwin, 2016; Tomassetti, 2016, the misclassification of a worker leads to lack of the rights and protections guaranteed to standard employees such as overtime payments, federal tax forms, inaccurate work-time records and inappropriate retirement plan contributions, failure in purchasing these forms of insurance individually leads to other benefits that help secure their health, safety, and wellbeing go unpaid. Consequently, they have no social safety net to fall back on. In Uber case, the firm had over one million drivers worldwide, but only had 6,700 employees according to Lazo, 2015.
This means any driver takes part in this platform are as independent contractor without any rights to sick pay or pension.Examples in Asia context: In Singapore, number of private sectors with earn high profit but hire small number of employees has increased fast which means number of contingent workers is escalate, resulting in disruption of labor’s living quality.According to Mark Graham in “Digital labour and development: impacts of global digital labour platforms and the gig economy on worker livelihoods”, the majority of buyers of work are located in high-income countries and only Malaysia and India are in this list (figure 5). However, the vast majority of work is carried out in low-income countries. India and Philippines, in particular, perform much of the work on the platform. To conclude, it increase the imbalances in the relationship between supply and demand of digital work, creating challenge for workers, especially in southeast Asia taking part in this platform.
In India, in order to protect “gig” worker, a policy is legislated that anyone contracting this service should not exceed 240 days to avoid the appearance of employment. “Additionally, to be acceptable as legal documents admissible as evidence in court, independent-contractor agreements must undergo a formal stamping process.” – according to Debbie M. Thorne & Floyd F. Quinn in “Supplier Resources in the Sharing Economy: Three Regulatory Concerns”With the explosion of digital platform, the competitiveness among workers seaking for gig jobs increases along with sudden budget cut and no minimum wage is set by the company, their income is not guaranteed. Figure 5.
Screenshot from a major digital labour platformTo make the matter worse, transportation network companies often constrain drivers from working for other opponent companies and set the maximum pay, providing more evidence that suggests an employer– employee relationship may exist. To date, the worker classification for these drivers remains an unresolved issue.