Used almost in a derogatory manner, the gig economy refers to the idea of loosely connected people sharing their labor/ expertise for professional returns. These laborers are not employees, but are on real short-term jobs or ‘gigs’. These short-term gigs are provided by some platforms like Uber.
For instance, Uber drivers work like employees (full-time with Uber) with litle or no employment benefits. The imbalance is pretty stark when these platforms begin disrupting existing, established business models.
What the a gig economy company like Uber does is to hire professional drivers (who would have otherwise been employed as drivers or in other roles) and give them business. This is fine as long as the ‘gig’ was a small proportion of your total work. Take for instance a photographer, who has his own professional practice.
The impact of gig economy platforms on employment is further stark – especially when the labor is ‘online work’. In such cases, the worker in San Bernandino, California is competing with similarly trained workers in Berlin (Germany), Beijing (China), Bangalore (India), or Bangkok (Thailand). Obviously the labor costs are different, and lack of regulations favor significant displacement of work to cheaper options. Even in the case of physical labor like driving cars, developed countries have been dependent on countries with demographic dividend and lower costs of skilling (costs of education and vocational training) for immigration (some world leaders’ public stances notwithstanding).
As the name suggests, collaborative economy is when different parties collaborate and create new, unique value that would not have been possible individually. For instance, economic activities like crowdfunding or meetup groups qualify as parts of the collaborative economy.
Given that these three economies have different architectures of interaction amongst partners, we cannot have the same business models serving them. Collaborative economies require business models where the platform allows for parners to complement each others’ value creation efforts; sharing economies require business models to match excess capacity with demand; whereas gig economies require aggregation and improving efficiency of the overall system.
Point to note is that in the gig economy, there is no collaboration/ co-creation (no common value added), nor is there a shared-value creation (fixed assets, low marginal costs, and excess capacity).