Gig economy set to double as workers shun traditional employment
The gig economy is likely to grow to over five million people by 2022, according to new research by policy consultancy Public First, commissioned by Deliveroo. The paper lifts the lid on the changing nature of work in Britain and is based on surveys, focus groups, and modelling.
Public First’s research suggests that the gig economy has the potential to more than double in size over the next five years, generating an additional £1.7 billion in higher incomes, or around an additional £540 a year for 3.2 million workers.
The research also finds that those with other responsibilities particularly benefit from growth of new way of working, with an additional 400,000 income-earning opportunities for students and 1,300,000 opportunities for parents and carers available in the next five years.
The report is essential reading for those wanting to understand the motivations and choices of Deliveroo riders and those who choose to work in the on-demand economy. It finds that riders working with Deliveroo, one of the biggest gig economy companies in the UK, are actively choosing to shun traditional employment, primarily as they seek greater flexibility in their working patterns. Further, most riders have an ambition to remain self-employed, either in the gig economy or setting up their own business.
Key findings of the report:
- Deliveroo riders value the flexibility of their work more than anything else (when riders were asked what they liked most about riding for Deliveroo, over 80% chose the option of “Flexible Work”) and in particular view it as a positive change in comparison to previous employment.
- Riders who have specific responsibilities in life such as studying or caring for another, benefit most from the type of work that Deliveroo offers.
- Working with Deliveroo is a labour market choice for riders as they have the option of taking traditional employment if they want it, but are choosing gig economy work instead. Only 6.5% of riders are working with Deliveroo because they couldn’t find employment elsewhere.
- Focus groups revealed that riders who had previously been in traditional employment had little desire or intention to return to this form of employment and the ‘overbearing’ bosses it brings.
- The money that riders make working with Deliveroo tends to be better than what they could make – or are making – from other jobs (such as working in supermarkets, on factory floors and directly for takeaway restaurants).
- The financial rewards of riding are amplified for those who are younger, who would otherwise be earning less if on the minimum wage, which is £5.90 an hour for somebody between 18-20. The average Deliveroo rider earns over £10 per hour.
- Like other types of gig economy work, for the majority of riders, the income they gain from the gig economy is additional rather than a replacement for more traditional employment.
- Nearly 40% of riders surveyed for the research said they would start their own business or work for themselves if they could no longer work with Deliveroo, while only 8.5% of riders stated that ‘”would look for a more traditional full or part-time job”.
- Deliveroo riders who have caring responsibilities or who are students place greater importance on flexibility than other groups.
- Deliveroo riders are positive about their working environment. When surveyed on key characteristics of their work environment – such as flexibility, opportunities to develop and the availability of work – the majority of respondents were positive in every one of the ten characteristics surveyed.
- Deliveroo riders have complex views on social protections. When prompted in the survey, riders showed a preference for some form of holiday pay and sick pay but their priority was for improvements to their way of working with platforms, for example improving the app. When asked about Government intervention, rider preference was for Government action to tackle street crime and lower cost of living issues.
- The report concludes that “the challenge from a public policy perspective…is to explore how security can be increased for those in the gig economy, whilst retaining the flexibility that attracts people to it”.