Lately, the welfare of gig workers around the world is being put under the microscope of many governments. Gig work has been there for decades but because of mobility restrictions brought about by the pandemic, it has grown exponentially driven mainly by the many innovative digital platforms that have emerged in the market. For many workers, gig work becomes a critical lifeline for survival. Today, the rules of the game are basically left to market forces forcing many people, including regulators and policymakers, to ask if the welfare of these gig workers is consigned to the mercy of their clients and the platforms.
Whatis.com says the term “gig” is a slang word for a job that lasts a specified period of time. Traditionally, the term is used by musicians to mean a performance engagement. Many prefer to use freelance work to refer to work that is occasional, irregular, and short-term and may be rendered in person or online through digital platforms. In the case of TNVS delivery drivers and delivery riders, the set-up is referred to as an O2O model or an Online to Offline model where transactions are initiated online but actual fulfillment is done offline. Examples of gig workers are electricians, opinion writers like me, freelancers, independent contractors, part-time hires, reliever bus or jeepney drivers, and portrait painters.
Online freelancers are self-employed individuals who are not affiliated with any company and are mostly getting their short-term gigs from digital platforms many of which are foreign companies that do not have offices in the country. They operate largely on their own, offering their skills and services to multiple clients. Their clients are mainly foreign-based as well.
In Payoneer’s Global Gig Economy Index 2019, the Philippines ranked sixth among the fastest-growing market in the world with a 35 percent growth in freelance earnings. The same report estimates the number of Filipino online freelancers at 1.5 million. Other studies put the figure at around 3.5 million. These numbers are truly staggering and, considering that majority of the online freelance workers are based in regions outside Metro Manila, their earnings must be creating significant economic activities in those places. The top jobs for Filipino online freelancers are Virtual Assistance services with earnings ranging between $300 - $700 a month and Content Writing services that pay around $0.02 per word.
The case of independent contractors like TNVS drivers, delivery riders, and drivers is quite different from those of online freelancers where they actually get into long-term contractual arrangements with the platforms and provide their own vehicles and tools to do their jobs. They have virtually complete control of their cars, work schedules, and, just like the online freelancers, log-in locations. To some extent, they are free to work for other platforms thus giving them significant entrepreneurial opportunities.
Most online freelancers and platform independent contractors have previously worked as employees but choose to shift to gig work because of higher income potential. I recently talked to a TNVS driver who used to work as a supervisor for a large chain of hardware stores. He has been working for the company for seven years and, despite his supervisory position, was getting paid just a bit higher than the mandated minimum wage. Hearing about better opportunities working as a TNVS driver from friends, he decided to try it during his off days. After a while, he decided to quit his job and took the plunge to become a TNVS driver. From just driving for another TNVS car owner, he entered into a rent-to-own arrangement for his first car. At the time I talked to him, he has just signed a loan for a second car. He never regretted the life-changing decision to quit his job because his being an entrepreneur now has provided him with much better earnings and opportunities.
Just like the hundreds of thousands of Filipinos who have shifted to online selling and are earning better than when they were working as regular employees, the gig economy is now producing modern entrepreneurs who have taken advantage of opportunities offered by emerging innovative digital business models.
I am also happy to see that our policymakers are now looking at ways to ensure that our Filipino gig workers are taken care of, not prone to abuses, and are provided the necessary benefits. This situation is likewise happening in other countries where new business models built on digital platforms are beginning to disrupt the market as well as work arrangements.
A one-size-fits-all policy approach may not be the right way to do it. We need to understand the nuances of the different gig economy players. For example, the absence of an employee-employer does not equate to a detrimental arrangement. The current platform models that we see are allowing independent contractors and other gig workers to earn beyond minimum wage.
(The author is the lead convenor of the Alliance for Technology Innovators for the Nation (ATIN), vice president of the Analytics Association of the Philippines, and vice president, of the UP System Information Technology Foundation.)