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The global impact of the gig economy

United Kingdom
The gig economy was identified as an important and growing issue in a wide variety of countries. To see how the challenge of the gig economy is being met around the world, we gathered data from 40 different countries. It is clear that in many countries it is felt that the traditional model of what constitutes employment needs to be revisited in the light of the growth in gig work – although no country has so far found the optimum way forward.

Not only the UK and the US, but also France, Germany, Austria, Belgium, China, Canada, Finland, Czech Republic, New Zealand, India, Poland, Netherlands, Spain, Ukraine, and Belarus all regarded the gig economy as an important or increasingly important issue.

The perception however, that the gig economy is a developing issue is not always reflected in patterns of employment. In Germany, a 2017 survey indicated that less than 1% of the German workforce performed work through internet-based technology platforms.

Often, the rise in importance of the gig economy was associated with a particular platform – particularly Uber. By way of example, Uber was highlighted as a significant factor in countries as disparate as Denmark, Finland, New Zealand, India and Panama. In Slovenia, the arrival of Uber in 2016 was seen as a major development prompting debate about how this new model of working related to existing labour and tax regulation. The gig economy has not had a major impact in every country, however. It was not regarded as a significant issue in Bulgaria,  Croatia, Cyprus, Turkey, Greece, Japan, Romania, Latvia, Hungary, Slovakia and Slovenia.

The development of the gig economy faces more barriers in some countries than in others.

It is also notable that where there are pockets of gig economy activity in countries that do not report a major impact, that activity is often generated by a handful of foreign companies – normally from the US, UK or EU. Such is the case in Russia, for example.

There are a number of reasons for the difference in impact. One factor is that the gig economy needs a high-tech environment in which to operate, with consumers using online platforms and apps to order goods and book services. It was reported that in Croatia, for example, the development of the gig economy is held back by the fact that less business is being conducted online.

On the other hand, advanced technology does not mean that the gig economy will necessarily thrive. Other cultural and regulatory factors have a part to play. Japan, for example, does not yet regard the gig economy as a significant issue, save for concern that gig workers might enjoy less income and social security protection.

It is also clear that the development of the gig economy faces more barriers in some countries than in others. Inthe UAE, where 80% of the workforce are expatriates, the need for workers to have a work permit and be sponsored by a licensed and registered body means that the potential for growth in the gig economy is small. Indeed, although Uber operates in the UAE, it must do so on a significantly different basis from elsewhere in the world. It is forbidden from competing directly with regular taxi companies and drivers are employed directly by a registered limousine company. Uber then acts purely as a booking platform and contracts with the limousine company itself rather than with individual drivers.

In Malta, those registered as self-employed are themselves subject to a restrictive legislative regime which, some argue, has limited the growth of the gig economy.

In other countries, the concern is that regulations are being bypassed, with gig- economy workers operating within the ‘grey’ or ‘informal’ economy. In Kazakhstan, those operating their own business must register as entrepreneurs, but there is a concern that many using online platforms are failing to do so. In Peru, it is also believed that the gig economy is operating outside of the regulations that are in place.

To read all about the global impact of the gig economy download the full report here.