May 23, 2023

Why the gig economy must change to survive the cost of living crisis

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Cost Of Living

There is no doubt that the current cost of living crisis is having a profound impact on consumer behaviour. The food and drinks industry has been particularly affected, with recent reporting from The Guardian suggesting that rising food prices will displace energy prices as the main driver of inflation in the UK. Poor harvests, the war in Ukraine, Brexit and supply chain issues are just some of the factors that are contributing to these soaring prices.

In March, the price of food and non-alcoholic drinks rose at the fastest rate of inflation in more than 45 years, with an annual inflation rate of 19.2%. Similarly, the cost of fast food and takeaways in the UK was also reported to have risen by around 13% for the same period. In a separate study, it was found that around 1 in 20 adults in the UK had run out of food during last winter and had been unable to afford to buy anymore.

The Irish Time’s reported on a study by Bord Bia, the country’s state agency for promoting Irish produce. The study shows that 59% of Irish consumers are purchasing less takeaways than previously reported. With the same study also suggesting that shoppers are opting for an in-store shopping experience to have better controls on their expenditure compared to online alternatives.

It’s clear the impact of the cost of living crisis is having an enormous impact on the food and drink industry, in both the UK and Ireland. Consumers are spending less and changing their behaviour as they adapt to inflationary pressures.

“Generally speaking, the in-store experience allows shoppers to feel reassured by real-life price and product comparisons. Shopping in-store gives people more control over what they select compared to online shopping, where there is a higher risk of ending up with an unwanted substitute product. At a time when budgets are tight, this is even more important…”
  • Bord Bia Report, as reported by the Irish Times.

Impacts to the Gig Economy

It should be no surprise that the current cost of living crisis, and the changes to consumer behaviour that comes with it, is having a negative impact on the gig economy. Consumers are purchasing less takeaways, and opting for in-store experiences to find bargains. These behavioural changes directly impact the gig economy, which has been largely built around providing consumers groceries and takeaway. The result of this is fewer takeaways and fewer on-demand groceries being delivered. The effects of this have already been sharply felt by a few big players in the gig economy in the UK.

Last September, The Guardian reported that on-demand grocery delivery startups (such as Gorillas, Getir and Zapp) were all feeling the effects, reporting mass closures and layoffs across the country, as they scramble to keep their business models profitable. With lower volume, it may come as no surprise that many of these companies have resorted to lowering what they pay their drivers by as much as 14% (when accounting for inflation). The reduction in order volume for gig workers to deliver on these platforms further compounds this problem, reducing their income even further.

A more recent article in The Guardian highlights how half of the UK’s gig economy workers are earning below the minimum wage. The article cites long wait times, low pay and uncertainty around income as some of the biggest challenges facing those in the gig economy during the current cost of living crisis. It is those working in the gig economy who are often struggling the most in society. As the cost of living crisis continues, we must consider a better, more reliable solution for gig workers.

“The long periods of time workers spend logged into such platforms, waiting or looking for work, was found to be a major factor contributing to low pay rates.”
  • Gig Worker quote from The Guardian

Solving these challenges

Gigable differs from most gig economy platforms in that we see value in shift based work, and the consistency and security that it brings to our freelancer community. When compared to the more traditional “on-demand” gig economy model, shift based models offer many advantages for gig workers. Many of these advantages directly address the issues being reported in the gig economy today.

“When asked what would improve their situation, respondents most commonly wanted minimum wage rates, holiday and sick pay…”

Predictable Income

With set shifts, like those found on Gigable, gig workers have a clearer understanding of when they will be working and how much they can expect to earn, allowing for better financial planning and a more stable income.

In the gig economy, on-demand models often leave workers uncertain about how much they might earn on a particular night. Delivery people can often spend nights chasing low delivery fees in inclement weather and waiting (without pay) for orders, all to barely earn a minimum wage (if they're lucky) by the end of the night. Gigable gives businesses on our platform the ability to offer a guaranteed hourly wage to ensure that, even on quiet nights, delivery people can still earn a predictable wage no matter how many orders they deliver (or don’t).

Gigable also clearly highlights to freelancers when a gig pays a Living Wage, making these gigs more attractive to freelancers on the Gigable platform and easier to find and apply to.

Regular Work Schedule

Shift work allows gig workers to plan their personal lives more effectively. They can schedule their education, childcare, or other jobs around their shifts. This allows for a better work-life balance for our freelancers, and creates more autonomy in their lives. With Gigable, gig workers can apply to shifts up to 4 weeks in advance, allowing them to plan their lives and finances with confidence. Whether its saving for a particular purchase, or just having confidence that you will earn enough to pay next month's bills, the ability to forward plan financially reduces much of the stress and anxiety felt by those in the gig economy today.

Building Professional Relationships

Working regular shifts with the same business allows gig workers to develop professional relationships. This can greatly increase job satisfaction and confidence, and it opens the door for genuine career progression and growth. It also gives businesses the ability to provide a better, more consistent customer experience by using gig workers they know and trust for their deliveries. With Gigable, businesses can favourite their top workers and give them preference for future opportunities. In turn, freelance gig workers can develop meaningful relationships, build trust and feel valued and respected for the hard work that they do. They can build their own profile as a respected gig worker in a network that respects their value and worth.

Enhanced Worker Benefits

It is clear that there is a need to provide gig workers with the same protections and benefits that are offered in traditional, full-time employment models. These benefits provide a much needed safety net that is sorely lacking for many in the gig economy. Gigable partners with Collective Benefits to provide our freelancer community with benefits and protections. These include deals and discounts in leading retailers, discounts on petrol and diesel to help with rising fuel costs, accident and injury cover, paid time off and access to digital GP care and mental health services.

It’s clear to us in Gigable that changes are needed in the gig economy to make it a viable model that provides gig workers with a predictable and reliable source of income. We strongly believe our shift based approach, combined with wage transparency and access to worker benefits is leading the charge in transforming the gig economy for the better. These changes are needed in order to create a sustainable model that mutually benefits both gig workers, and the businesses that use them.

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