Game Changers or Slave Drivers? Human Resource Managers in the Gig Economy Firms

The Nature of Work in the Gig Economy

The Gig Economy is an unmistakable part of the emerging Digital Economy. Firms such as Uber and AirBnB and Task Rabbit are firms that employ thousands of freelancers and gig workers as contractual and part time workers in their business models that are built on the concept of sharing and aggregating of tasks.

In this context, it is worth noting that HRM or Human Resource Management professionals in these firms deal with an entirely new way of managing people.

For instance, in the earlier decades, work was permanent and was done onsite whereas in the Gig Economy, there are no permanent employees and at the same time, work is done virtually wherein drivers anywhere in the world and freelancers everywhere aggregate on the Platforms of the Gig Economy firms anytime to create value for themselves and the Gig firms.

Take the example of Uber or Task Rabbit which provide a Platform for drivers and freelancers to exchange their work for remuneration. Now, think of the HR policies in these firms and one would then visualize a model wherein such policies can indeed herald a new era of capitalism or take us back to the Dark Ages where Slavery was rampant.

Game Changers or Slave Drivers? Examining Some Criticism of Gig Economy Firms

While we do not for a moment suggest that firms such as these are parasitical or drive their employees like salves, we also want to refer to the criticism of these firms from many quarters that portray them as heartless machine like organizations which put the interests of profit above that of their workers.

Of course, this aspect is natural to capitalism that thrives on profit taking over everything else. So, one might very well ask, what is new that these firms are doing and that they are merely following the well trodden free market path?

However, it is important to note that this Impersonal and Machine like Platform and Gig Firms are ushering a new period in the evolution of organizational structures by removing the traditional social contract between employers and employees and instead, they are introducing an entirely virtual and impersonal interface.

This can work wonders if the HR policies are amenable to the workers and on the other hand, can become a new form of slavery wherein workers toil for long hours without the comfort of Health and Pension benefits.

This is the reason why we must closely look at how HRM operates in these firms.

Human Resource Management in the Gig Economy Firms

To start with, most Gig Economy firms have HR policies that mandate a certain level of commitment and dedication from their freelancers.

This is par for the course and hence, is accepted as fair. However, the lines begin to be blurred once when we look at the responsibility and accountability of the firms with respect to their freelancers.

For instance, most Gig Economy firms often resort to the standard line that their freelancers are essentially on their own as far as occupational hazards and work related incidents are concerned.

At best, they assist them with some basic legal help and compensation and at worst, which by the way is becoming common; they simply deregister them from their Apps and Platforms.

This is where many experts believe problems arise as the Gig Economy firms all too often shirk their responsibilities in case of any incidents.

Moreover, they also hide behind the Legal Terms and Conditions of their Contracts that clearly and explicitly state that their Freelancers are just that and nothing more which means that they and they alone are responsible for their actions.

A New Social Contract for the 21st Century

Now, let us look at the Pay and Compensation models of the Gig Economy firms. There is much criticism of the model of pay and bonuses that plainly resembles slave driving aspects since Drivers and Freelancers earn more and more only when they work like slaves rather than professionals.

Moreover, most of these Gig Economy firms often sign up their Freelancers with attractive initial offers only to make it difficult for them to sustain later.

Indeed, more than anything else, this is the complaint and the criticism that has become common from both industry experts as well as the freelancers they, some of whom have left lucrative careers to join these firms on the promise of making tons of money.

Apart from this, the fact that there is absolutely no human contact expect on some days of the year and that too not mandatory between the employers and the workers means that this kind of work is also dehumanizing.

Indeed, management theory clearly mentions that this is the example of the Alienation of the Worker that has led to many revolutions in the historical times. Thus, the contention here is that we might again be on the cusp of something similar unless the Gig Economy evolves into something more humane.

Having said that, the Gig Economy is transformative and game changing for the very reason that it visualizes a revolutionary approach to the traditional ordering of the economic and human resource management aspects of capitalism.

Thus, it is still not too late for all stakeholders to get together and arrive at a New Social Contract that would serve as a Blueprint for the future and usher in a New Era of Prosperity. To conclude, the time is now for business leaders and governmental and societal actors to redefine the Nature of Work for the 21st Century.


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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


Human Resource Management