Time to hold the gig economy responsible for the future

The emergence of platforms such as Uber globally and Wolt in the Nordics means almost anyone can freelance, even with limited experience and skill.

Increasingly, more traditional companies are getting on board, too, drawn to the upsides of the gig economy: cheaper labour, less responsibility in terms of salaries and benefits, and overall reductions in overhead costs.

The keyword for freelancers is ‘free’. Many freelancers are able to work wherever and whenever, at least in industries where all that is needed is a laptop and a working internet connection. In addition to flexibility and freedom, many entrepreneurs are also able to claim ownership in their work in a way that normal employees can’t.

Regardless of its pros and cons, the reality is that by the year 2030 it is estimated that 80 per cent of the workforce will be part of the gig economy, which means that we are in for some drastic changes in the near future. But can a labour market that relies heavily on freelancers truly sustain?

One of the chief criticisms of the gig economy has been related to workers’ rights. Legislators are already taking tentative steps to offer more support in the short term, but there are also wider implications of this shift that are yet to be fully addressed.

For one, we are yet to see the full effects of what a long-term gig economy will have on people’s retirement. Without the security of a company topping up their pension funds, freelancers currently must make the decision themselves how they prepare for their autumnal years. According to Forbes, close to 50 per cent of gig-economy workers are not saving up for retirement or for a rainy day, for that matter.

With this in mind, one wonders whether retired gig-economy workers will be divided into ants and grasshoppers like in the classic fable by Aesop. On one side of the equation, an ant works diligently through the summer to save up for the cold winter ahead and, on the other, the grasshopper dances the summer away and come winter is left hung out to dry. Regardless of whether this scenario seems like an exaggeration, it will be left up to the state to compensate for short-sightedness on the part of freelancers and policy makers, too, for that matter.

In short: further regulation of the gig economy is in order. Companies should not be allowed to only enjoy the benefits at the cost of the workers. The same applies to the platform providers which facilitate a connection between the two. The risks and rewards should be shared by all actors in this collective economy if we want to ensure its sustainability.