What is the gig economy?

The gig economy describes the trend of companies hiring independent contractors and freelancers instead of full-time employees.

Workers are paid for each individual “gig” they do – such as food delivery or a car journey – instead of by day or by an hour.

In this type of labour market, jobs are increasingly temporary and flexible – and employees do not have fixed contracts.

Some employees like the flexibility this gives them, especially if they only want to work part-time.

But others are left with little choice but to work full-time hours without a contract to offer job security.

They may also miss out on workers’ rights such as sick leave, holiday pay, redundancy pay and maternity leave. Gig workers are not even guaranteed the minimum wage.

Which UK companies are part of the gig economy?

The gig economy spans a range of sectors including transport, retail and food.

UK companies include:

  • Deliveroo. Riders for Deliveroo went on strike after the company announced plans to replace their hourly rate with a payment per delivery.
  • Uber. It was accused of portraying itself as a company which connects customers with self-employed people who want to sell their services.
  • Addison Lee. It has around 40 people who operate as cycle couriers for time-sensitive documents such as contracts and luxury goods.
  • Amazon. Last year an investigation revealed drivers, asked to deliver up to 200 parcels a day, earned less than the minimum wage.
  • DPD. The company which delivers for John Lewis and Marks & Spencer is offering holiday and sick pay, after a driver who was terrified of taking time off, passed away.
  • Pimlico Plumbers. The Supreme Court is considering a legal appeal brought by the company, deciding whether a tradesman is an independent contractor or a worker who is entitled to certain rights.
  • Ocado
  • Argos

There are five million people currently working in the gig economy in the UK – according to the McKinsey Global Institute (MGI).

This is around 15.6 percent of the total full and part-time workforce (32 million people).