{"id":9120,"date":"2021-12-20T15:29:04","date_gmt":"2021-12-20T15:29:04","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=9120"},"modified":"2023-10-30T12:04:00","modified_gmt":"2023-10-30T12:04:00","slug":"the-gig-economy","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/the-gig-economy\/","title":{"rendered":"The gig economy and how it can help your business"},"content":{"rendered":"

The phenomenon of the gig economy has transformed the world of work over the past decade or so, and has had a significant impact upon the economy as a whole. Countless businesses – both large and small – have taken advantage of the flexibility of ad-hoc contracts which often meet the needs of both employer and employee. But what exactly is the gig economy and how can SMEs take advantage of it?<\/p>\n

What is the gig economy?<\/h3>\n

The gig economy refers to the system of finding people to complete unique time-limited tasks required by a business, normally using a technology platform. There are several different definitions of gig economy work, but here are some key features:<\/p>\n

Temporary<\/h4>\n

Virtually all gig economy contracts are limited to individually defined tasks or projects, with a limited time frame. Although there may be an endless stream of unique tasks, these are generally disparate and contracted on an ad-hoc basis. This is in stark contrast to permanent employment contracts.<\/p>\n

Self-employment<\/h4>\n

One of the defining features of the gig economy is that it\u2019s essentially a business-to-business operation. Rather than companies employing members of staff, they will instead be contracting out work to self-employed individuals.<\/p>\n

Although this has been challenged in court, particularly in the case of Uber, in general, it is assumed that gig economy \u201cworkers\u201d are self-employed contractors (as opposed to the legal definition of workers or employees).<\/p>\n

Flexibility<\/h4>\n

Normally the contracts are relatively flexible in their nature, allowing both employer and employee to define their terms. For example, although some \u201cgigs\u201d may require a worker to be present in a specific geographical location, if the work can be completed remotely then it will generally be up to the worker to decide where to carry out their contract.<\/p>\n

Zero-hours<\/h4>\n

Contracts that do not have any guarantee of specific hours of work are known as \u201czero-hours\u201d contracts. But it\u2019s important to distinguish between zero-hours employment contracts where there is an employment relationship, and gig economy work which is essentially all provided on the basis of zero-hours but is not intended to form an employment relationship.<\/p>\n

Technology<\/h4>\n

Most gig economy systems rely on various types of technology, including platforms and algorithms. Perhaps one of the most famous examples is Uber, whose business model relies on a software platform used by drivers and passengers, involving a sophisticated algorithm that assigns specific gigs (journeys) based on a set of criteria such as geographical proximity.<\/p>\n

\n \n \"Fully\n \"Complete\n <\/a>\n <\/div>\n \n

There are generally three different parties involved in any gig economy work:<\/p>\n

    \n
  1. Business – the company or organisation will define the specific tasks or jobs which it requires to be completed, either at a fixed or hourly rate.<\/li>\n
  2. Contractor – this is normally an individual who undertakes the set tasks, usually on a self-employed basis.<\/li>\n
  3. Platform – the software which acts as an interface between the contractors and businesses, often managing the various tasks using an algorithm. Although the platform is sometimes owned and operated by the business, it will often be provided by third parties which will either charge a licence to the business for using the software or else take a commission from the business and\/or the contractors.<\/li>\n<\/ol>\n

    What are the pros and cons of the gig economy for my business?<\/h3>\n

    There can be several benefits of taking advantage of gig economy tools, depending on the desired outcomes of the business:<\/p>\n