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The truth about the gig economy

24 March 2017

The truth about the gig economyA new investigation into the reality of working in the gig economy shows that, contrary to assumptions, most gig workers have actively chosen this type of employment.

About 1.3 million people are engaged in gig work according to To gig or not to gig: Stories from the modern economy , a new report from the CIPD. It means that 4% of UK working adults aged between 18 and 70 are working in the gig economy.

The report is based on a survey of 400 gig economy workers and more than 2,000 other workers, as well as in-depth interviews with 15 gig economy workers.

It reveals that just 14% of respondents said they did gig work because they could not find alternative employment. The most common reason for taking on gig work was to boost income (32%).

Overall, gig economy workers are also about as likely to be satisfied with their work (46%) as workers in more traditional employment (48%).

However, nearly two-thirds of gig workers (63%) believe the Government should regulate to guarantee them basic employment rights and benefits such as holiday pay.

There were concerns raised by some workers about the level of control exerted over them by the businesses they worked for, despite the fact that they are classified as self-employed. Only four in ten (38%) gig economy workers say that they feel like their own boss.

Peter Cheese, CIPD chief executive, said: "This research shows the grey area that exists over people's employment status in the gig economy. Our research suggests that some gig economy businesses may be seeking to have their cake and eat it by using self-employed contractors to cut costs, while at the same time trying to maintain a level of control over people that is more appropriate for a more traditional employment relationship."

Other key findings include:

  • 57% of gig economy workers agree that gig economy firms are exploiting a lack of regulation for immediate growth;
  • But 50% also agree that people in the gig economy choose to sacrifice job security and benefits in exchange for flexibility and independence;
  • Median reported income for gig work is from £6 to £7.70 per hour but 51% say they are satisfied with their income.

Peter Cheese said: "We are pleased that the Government has commissioned Matthew Taylor to lead a review of modern employment practices … the Government also needs to … clarify people's employment rights and enforce existing legislation better, such as supporting a 'know your rights' campaign, so more people are aware of what protection they can expect."

In February, Acas published new guidance on gig economy working and employment status rights.

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