House of Lords Library

Gig Economy: Introduction

Published Tuesday, November 21, 2017

This House of Lords Library briefing provides overall information on the demographics and earnings of those participating in the gig economy, on gig economy working practices in each sector, and on the potential effects to be seen in the wider economy.

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The term ‘gig economy’ does not have a single agreed-upon definition, and can be used to describe multiple economic practices. It is often used to refer to a practice of working where an individual uses a digital ‘platform’ provided by a company, accessed via an ‘app’ or a website, to find and perform short-term jobs. An individual usually accesses the app through a mobile telephone or computer. However, it has also been used to describe labour markets characterised by the prevalence of short-term contracts or freelance work (not necessarily requiring an app to find work via a digital platform), as opposed to permanent jobs.  

In recent years, the gig economy has grown significantly, with the Royal Society for the Encouragement of Arts, Manufactures and Commerce estimating in 2017 that there were 1.1 million gig economy workers in the UK. To date, the gig economy has generally not created new professions, occupations or jobs, but rather introduced new forms of working in existing parts of the economy. This briefing will focus on the gig economy in six such sectors: taxi driving; food delivery; goods couriers; skilled manual labour; unskilled manual labour; and professional, creative and administrative labour. Alongside this growth in size, it has increasingly been the focus of considerable research and commentary, both positive and negative. 

On 20 November 2017, the House of Commons Work and Pensions Committee and the Business, Energy and Industrial Strategy Committee published a joint report, A Framework for Modern Employment, partly focusing on working practices and legal challenges to employment status in the gig economy. It also contained a draft bill addressing a number of these issues.  

Given parliamentary interest and wider commentary on the issue, this briefing provides an introduction to the gig economy. Where possible, it discusses as many different companies and working practices that take place with the information currently available. However, the taxi driving and food delivery sections of this briefing focus to a significant extent on two companies, namely Uber and Deliveroo respectively. This is due to three reasons: 

  • The predominance in market share that Uber and Deliveroo currently possess for gig economy-style working in these sectors. 
  • The weight of social and political commentary that has focused solely on Uber and Deliveroo as characteristic of gig economy work in these sectors. 
  • The significance of the legal and regulatory challenges that are currently faced by Uber and Deliveroo in their sectors. 

Lords Library notes LLN-2017-0086

Author: James Ainsworth

Topics: Companies, Cycling, Employment, Information technology, Motorcycles, National insurance, Pay, Regulation, Taxation

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House of Lords Library

The House of Lords Library delivers research and information services to Members and staff of the House in support of parliamentary business.