Nayonika (Year 12)
Editor’s note: Nayonika, now in Year 13, wrote this thought-provoking essay and submitted it to the annual Northeastern University London Essay Competition. CPD
The “gig economy” refers to the idea of firms hiring freelancers and temporary workers rather than permanent employees. The gig economy currently is expanding at an exponential rate revolutionising the labour force with the rapid development of technology such as apps aiding its growth. The growing popularity is fuelled by the requirement of flexibility and independence in modern society with companies such as Lyft and Fiverr growing rapidly. The question is does the expansion of the gig economy contribute positively to sustainable economic growth? By sustainability we mean the ability for the economy to be maintained and grow for a long period of time. This essay will first explore both the positive aspects and subsequently study the drawbacks hence forth concluding that the gig economy is unable to provide sustainable economic growth in its current format.
The gig economy is becoming increasingly popular due to the increase in demand for flexibility, especially after the pandemic, as well as adaptability which allows workers to adapt to the reforming economic landscape. This increased flexibility has proven profitable for the economy as gig workers contribute £20bn to the UK economy, the same as the aerospace industry [1]. Magnitude wise, 150 million people in North America and Western Europe now work as independent contractors [2]. This adaptability enables businesses to respond to fluctuations within the market, allowing for a more sustainable economy. For example, during an economic bust such as the Covid 19 pandemic having gig workers made it easier for companies to hire temporary workers without increasing costs. Many more people stayed at home during Covid 19 and therefore were able to contribute to the gig economy. The number of individuals with income from jobs via certain platforms soared by 3.1 million between 2020 and 2021 [3], with most of the main increase in transportation and food delivery allowing people to have a source of income during these difficult times to provide for their families. Moreover, taken from a recent study 56% of gig platform workers take up gig work because they want to save up extra money [4]. In addition, the gig economy improves social inclusion because of increased mobility of working times and the independence in the work that they take on. This allows people with disabilities as well as parents to work without the obligation to fixed working hours and having little choice.
One major benefit of the gig economy is its capacity to stimulate innovation by bringing together a plethora of skills and knowledge, which fosters problem-solving across a range of industries e.g. the creation of new applications to aid connectivity. Around 70% of gig workers aged 18-24 use the Internet in their job hunts (PYMNTS) and 60% use digital marketplaces to find new opportunities [5]. Apps such as Uber and Fiverr are only a few examples that allow for the gig economy to thrive. This innovation helps the general dynamism and sustainability of the economy in addition to making enterprises more competitive and to be more welfare enhancing for consumers as it diversifies options. The assistance of technology allows for people to be hyper-connected via social networks allowing for households and firms to hire workers for short term contracts with ease, which covers the base of the gig economy by connecting a customer with a service.
The gig economy offers a pathway to efficiency and resource optimisation for businesses. By using gig workers for specific projects companies can reduce their fixed costs as they are not paying a monthly wage, which could lead to lower prices for consumers. By increasing the efficiency of resources, the gig economy enhances the growth of entrepreneurship, facilitating the growth of small businesses which constitutes to 98.4% of the business population in the UK [6]. These enterprises play a vital role in job creation and economic diversification which contributes to the sustainability and the welfare of consumers, economic theory models consumer preferences through convex preferences i.e. diversification increases utility.
On the other hand, the gig economy has major fundamental flaws preventing it from being a sustainable system that can be adopted in the future as a main source of labour. The lack of regulation, benefits and job security are the main challenges that the model faces. Insufficient payments and job insecurity causes stress reducing the standard of living. Moreover, in the long term for the gig economy to be fully sustainable legislation need to be put in place to protect workers including sick payments and pensions to reduce risks. Companies such as Uber claim that their employees are self-employed and therefore do not qualify for payment benefits. Other companies that provide a platform for the gig economy to flourish argue that they are merely a platform that connect a person with a job and therefore do not take responsibility in providing benefits to workers. In addition, the UK Supreme Court’s recent ruling: Deliveroo drivers are not considered workers but self-employed independent contractors [7], increases the disparity of treatment between traditional workers and gig workers by the government; even though gig workers need the same rights. Furthermore, due to the lack of progress in increasing workers’ rights and protection many gig workers go on strike we can see this as in 2018 Uber drivers protested for better working conditions and pay in the UK [8], these strikes increase the unsustainable aspect of the gig economy. Moreover, this decreases the attraction for gig work including future generations having no desire to partake in gig work reducing its sustainability. For example, gig workers do not have accident cover and therefore this lack of protection would stem a substantial risk compared to traditional workers. This would impact the workers family as a stream of income would now be reduced. Some gig workers treat these jobs as more than just “gigs” however use them as their full-time jobs, but do not have the same protections.
Furthermore, even though many people admire the gig economy for the flexibility and freedom that an employer is perceived to have. The more reliant that people become on gig jobs the less flexible and independent they become. Due to the low barriers there are to enter freelance work there is a large oversupply of labour. Workers often need to work longer hours due to the large competition for services and overall, wages are downward bias. In the long run, if the number of gig workers continue to grow this trend will be exacerbated leading to an ever-lower demand for gig workers which will impact the supply levels of firms and therefore this reduces economic growth in the long run and therefore decreases sustainability. Furthermore, this could intensify the inequalities in society due to the large number of individuals being pushed into this line of work, we can see this as 4.7 million British people participated in gig jobs in 2019 [9] and this grew to 7.25 million in 2022 [10] which increases the number of people unable to make a wage in which they can sustain or survive on reducing the standard of living, especially because of inflation.
The fragility of the gig economy was shown during the Covid 19 pandemic, where lockdowns were implemented to contain the virus as a result many jobs were significantly impacted. As a matter of fact, the number of people in work fell by 825,000, unemployment rose by almost 400,000 in the UK [11]. Although many independent workers within the gig economy whose jobs depend on online digital platforms; some are also highly dependent on human interaction which they were being deprived of. A large majority of work cannot be performed working from home or online. In addition, gig workers were put in a highly vulnerable positions due to companies regarding them as ‘independent workers’, meaning they lack all working benefits such as sick pay. This also means that these gig workers bear all risks when it comes to their job from health and safety to financial loss. Secondly, gig work is contingent to their services – thus gig workers whose demand for their work has reduced due to public health measures, are left without or very little income. The combination of these two factors creates a substantial complication for workers as due to the line of work they are in they are forced to survive on volatile wages, which in turn puts themselves and their family under a lot of financial pressure.
In conclusion, the growth of the gig economy presents a host of opportunities and challenges for sustainable economic growth. We can infer that in the UK this progress will be a slow tedious process in which gig workers will have to face adversity in the future to receive the rights that they want. The gig economy may allow for increased flexibility, connectivity and innovation. The lack of regulation, benefits and job security creates many fundamental problems within the gig economy and therefore in its current state is not sustainable due to these drawbacks. Despite in the short term the gig economy looking promising, it clearly needs greater investment, training and greater legal protection to protect workers and evolve in a manner that leads to growth allowing for long term sustainability.
Work Cited
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https://hbr.org/2018/03/thriving-in-the-gig-economy
[3] National Bureau of Economic Research (2023) -The Evolving Role of Gif work during the Covid-19 Pandemic available at:
The Evolving Role of Gig Work during the COVID-19 Pandemic | NBER
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[5] Kulach, K (2023) Gig Economy Statistics – Get Ready for the future of Work available at:
[6] Department for Business & Trade (2023)– National Statistics available at:
Business population estimates for the UK and regions 2023: statistical release – GOV.UK (www.gov.uk)
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[8] BBC News (2018)- Uber drivers stage UK strikes over pay and conditions available at:
Uber drivers stage UK strikes over pay and conditions – BBC News
[9] MeliSan (2021) The UK Gig Economy available at:
UK Gig Economy | Wonder (askwonder.com)
[10] Fennel, A (2023) Gig Economy Statistics Report available at:
Gig Economy Statistics UK | 2023 Industry Report (standout-cv.com)
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Coronavirus: Impact on the labour market – House of Commons Library (parliament.uk)
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https://www.iema.net/articles/a-sustainable-gig
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The GSAL Journal 