FAQ Platform Economy

Q: 1. What is the platform economy?

There are many definitions of the platform economy. The one that fits best the way we as WageIndicator look at the platform economy is ‘ex ante specified, paid tasks carried out by independent contractors mediated by online platforms’ (Koutsimpogiorgos et al., 2020). In the platform economy, which operates in markets where demand and supply are fragmented, the platform resolves information asymmetry and facilitates workers and clients with a marketplace to execute a transaction. Technology plays a significant role in the platform economy. Algorithms generally determine access to work, how tasks are carried out, the conditions of the assignment, and the evaluation of work.

Q: 2. What kind of work is being done via online platforms?

The type of work performed via gig economy platforms can broadly be divided into four categories: on-site work versus online (location-independent) work, and on-demand work versus scheduled work. The most visible form in public debate and research is on-demand work conducted on location, such as taxi and (food)delivery work. This work is visible on the streets, particularly because the workers are often recognisable by the colours of the platform through which they carry out their jobs. Furthermore, the impact of algorithmic management is strongest for this category of work, which contributes to increasing the vulnerability of the worker. Examples of scheduled and on-site work include domestic services, babysitting and work in and around the house. Scheduled online work includes creative work such as design and other tasks such as software development, but also very short-term jobs such as data annotation and content moderation.

Q: 3. What is a gig worker?

A gig worker is an individual worker who uses online gig economy marketplaces to find work.

Q: 4. Are gig workers employees or self-employed workers?

Platforms usually portray gig workers as self-employed workers or ‘partners’. Platforms suggest that this form of partnership contributes to increasing workers’ autonomy and enables them to determine their own working hours and conditions. There is widespread resistance to this framing, including from trade unions and grassroots worker representative organisations. They argue that gig workers are not self-employed workers, but employees of the platform. They argue that, as the market authority, the platform sets the rules of the game and the worker has no influence over many variables that a self-employed entrepreneur would normally control. They contend that platforms use the self-employment framework to circumvent employer obligations and risks. After all, in the case of self-employment, the costs and risks (such as the risk of not having work) are borne by the individual worker rather than the employer.

Q: 6. In what type of industries can one find platforms?

Platforms are becoming a regular intermediary in all kinds of industries. Gig workers are active in all industries—including B2B, retail and education—not just in the traditional freelance strongholds of mobility, delivery, IT, and data processing. [Source]Source: https://irp-cdn.multiscreensite.com/ec5bfac6/files/uploaded/AppJobs%20Institute%20Future%20of%20Work%20Report%202020.pdf - page 33Low-skill, low-wage freelance tasks accounted for only about half of the freelance work sourced through platforms. Much of the remainder comprised higher-skill, higher-paid work, such as software development and design.Check also What kind of work is done through gigs?

Q: 7. How many people work in the platform economy?

It is difficult to put a figure on the number of workers in the platform economy. A commonly cited estimate of between 154 million and 435 million workers worldwide comes from a 2023 World Bank report.

Q: 8. Is the gig economy fair for workers?

Flexibility and little regulation come with the risk of unfair treatment. Some improvements proposed by labour rights groups to make the gig economy fairer for workers:Workers should not be mis classified as self-employed if they are employees in practice;Pay should at the very least comply with minimum wage regulations in the worker’s location; Workers should have a legally binding way to make their needs and desires heard to platform operators, through union membership, collective bargaining, and, in countries with such structures, works councils and co-determination rights;Code of conduct: in the absence of collective bargaining agreements, platforms should establish clear codes of conduct for members, including published procedures for workers to raise concerns; and the platforms should demonstrate enforcement of those codes;Worker evaluations and ratings should not be based on non-payment rates and workers should be given reasons for any negative ratings;Workers should be able to contest non-payment, negative evaluations, qualification test outcomes, accusations of code of conduct violations, and account closures;Platform terms – including the terms for payment, work evaluation, and dispute resolution – should be presented in a format that is easy to understand, clear and concise;Countries need to adapt their social protection systems to include platform economy workers where they are generally still regarded as self-employed;Adapt social insurance mechanisms to cover workers in all forms of employment, independent of the type of contract and by lowering the contribution thresholds;Use technology to simplify contribution and benefit payments.Based on “Fifteen Criteria for a Fairer Gig Economy” by M. Six Silberman of the IG Metall and “Digital labour platforms and the future of work: Towards decent work in the online world” by ILO (2018)

Q: 9. Why is the WageIndicator Foundation interested in the Platform Economy?

The Platform Economy is of interest to us for various reasons, two of which stand out in particular. Firstly, the Platform Economy is seen as the testing ground for technology used in the labour market. Technology that we first saw in the gig economy is now also being used in the non-platform labour market. By researching and interpreting the Platform Economy, we also gain an insight into the future of work and how we should position ourselves in relation to it. For instance, we explore how the position of workers in the Platform Economy can be improved through collective agreements, how worker resistance can be organised, and how regulations can be adapted to this type of work.Secondly, due to its centralising nature, the Platform Economy makes markets that were previously poorly visible, visible. For instance, there were already taxis, delivery riders and domestic workers before platforms existed, but the market was too invisible and fragmented to create a sense of urgency for stakeholders to take action. Platforms have changed this, which also offers new opportunities to make a difference for a very broad group of workers.The Platform Economy creates momentum among various stakeholders and an opportunity to make a significant difference to many workers at once.

Q: 10. What is the aim of the WageIndicator gig economy section?

In this section, we aim, as we have always done, to contribute to transparency and well-informed debate and decision-making by collecting, analysing and sharing data on pay, collective agreements and labour law. In addition, through our content initiatives, such as blogs, webinars, research and The Gig Work podcast, we create platforms where these new developments can be discussed and the views of various stakeholders can be shared with a wide audience.

Find answers to common questions about the platform and gig economy. Learn about key concepts, regulations, earnings, working conditions, and how the sector is developing across countries.

1. What is the platform economy?

2. What kind of work is being done via online platforms?

3. What is a gig worker?

4. Are gig workers employees or self-employed workers?

5. Do all digital labour platforms use the same approach to engage with their workforce?

6. In what type of industries can one find platforms?

7. How many people work in the platform economy?

8. Is the gig economy fair for workers?

9. Why is the WageIndicator Foundation interested in the Platform Economy?

10. What is the aim of the WageIndicator gig economy section?