Gig Economy may be a market group that connects service suppliers to customers on a gig, i.e., per task. It implies a labor market where many are employed on a part-time job and freelancers who works when he wants than doing a full-time job. Some companies look for freelance contractors, on-call employees, and freelancers to do work for them.
It includes all such platforms that hire employees to work in several sectors like food and beverages, e-commerce, data, technology, content development, etc.
Irrespective of the market in which the gig employee is employed, little tasks are given to them to complete the task to get paid.
Characteristics of Gig Economy
The characteristics of the Gig Economy mentioned below
- Variations in the tasks: The tasks may vary from delivering an item to riding somebody to a destination they want. Ex: Amazon and Uber
- Flexible operating hours: The operating hours of a gig employee are not prefined like 9 to 5. they have the freedom to choose their working hours
- Participants: It involves 2 participants, i.e., the service seeker who is also referred to as a client who pays the freelancer to get their task completed and a service provider or gig employee who completes the task to earn money.
- Project-based Economy: in this freelancers are paid only when he completes the project or task assigned by the service providers.
- Use of Information & Communication Technology: gig economy uses these characteristics to connect the consumers and the gig employees, so they can be hired for the tasks which need a short period of time to complete
- Formal Contract: Gig workers enter into a contract with on-demand companies to render services to the company’s customers or clients. And the prospective client requests the services via a website or application, facilitating them to search for the service providers, i.e., gig workers. When the gig worker approves the request, they provide the service on behalf of the company and get compensated.
- Compensation: Gig economy is an economy which surrounds the temporary job, freelance works and other types of jobs. They were paid when the gig employees complete the tasks given to them.
Components Of Gig Economy:
- Gig employees: independent workers paid based on task or job given. Gig employees also include part-time employees, freelancers, freelance contractors, etc.
- Consumers/Clients: a person who needs a specific task to get completed.
- On-demand company: corporations directly connect gig employees and clients, either through an internet site or application. Uber, Ola, Zomato, Swiggy, Amazon.
Gig Economy is found in many occupations like taxi drivers, food deliveries, product travelers, cleaners, net developers, inventive designers, etc. it’s a huge and more diverse system, which is why it is impossible to impose any regulation to work effectively.
Classification of Gig Economy
- Service-based gigs: it’s composed of low to middle-skilled employees, as well as delivery agents, and also people who provide services through work on-demand platforms like plumbers, carpenters, taxi drivers, etc.
- Knowledge-based gigs: It involves semi to high talent work like consultants, developers, designers, and marketers.
Reasons for the promotion of Gig Economy
- With the rise of digital living, there is no particular location to work from. More Like WorkfromAnywhere Model
- Short-term contracts help the companies to avoid any incentives to gig employees.
- Advancement in technology has reduced human effort, also adds to the gig economy.
- A dynamic business environment induces the Company to hire short-term laborers.
- It saves coaching time and money, which will increase the operational efficiency of the organization.
- Freedom of works, because the employees will work at their own pace, as there are no fixed operating hours and employment policies. Also, they have the freedom to choose the work they need to try and do.
Final Thoughts From Business Mavericks
Gig Economy is an on-demand, task-based economy that requires the exchange of labor for cash among the people. The activities are coordinated via a digital platform, i.e., it connects the service provided to the customers on a brief term basis. It signifies a free market system within which temporary and versatile jobs are found.