The gig economy is a term referring to a type of work undertaken on a short-term or freelance basis, which has become increasingly prevalent in many countries, particularly over the past decade. Whether working as independent contractors or participating in the sharing economy, individuals now have a wider range of options for earning money.
The benefits of the gig economy
These increasing options have revolutionized certain industries, as well as providing a growing amount of people with a means to have flexible working arrangements that better suit their lifestyles. This can include the increasing availability of short term contracts and opportunities for independent contractors, in a wide range of industries.
In the U.K., the proportion of the workforce involved in the gig economy has doubled in the past three years and now accounts for 4.7 million workers.
Certain sections of the gig economy, such as accommodation sharing services, can offer individuals a chance to supplement their income while providing alternative options for tourists at competitive prices. In this instance, the service also allows for more efficient use of rooms which would otherwise be empty.
An important advantage of the sharing economy is the prospect of a more competitive market in sectors such as travel and transportation, making these more affordable for consumers.
Ridesharing also provides an opportunity for potential new service providers to enter the market more easily, since starting up as a taxi driver can often be costly and complicated in many places. For instance, taxi drivers in Paris have to pay a licence fee which can cost up to $270,000.
Challenges from established industries
Clearly, established industries will have objections to newcomers having financial and administrative advantages.
In the hotel and taxi industries, many are familiar with Airbnb and Uber. In November 2019, Uber in London lost their license to operate due to cited safety failures. Though such companies have relatively thrived within the gig economy, there is a considerable amount of bureaucracy and regulation that prevent them from operating freely.
Many established companies feel unable to compete with these new innovators who would appear to have a distinct advantage in the marketplace.
However, the best solution is not to prohibit innovation and competition by regulating newcomers in the same way as established companies, but rather to reduce the challenges faced by the existing industry through deregulation.
Why defending the gig economy matters to SFL
At Students For Liberty, we believe in competitive markets that reward innovation. Existing industries do not have the right to enforce an effective monopoly over their particular services by infringing on the rights of competitors. Furthermore, we believe that individuals have the right to find innovative methods to arrange their work and service provision.