In this ESG in Depth, we discuss the impact of the Gig Economy and changing regulation on workers and the platforms that employ them.
Problem: On-demand labour platforms offer new job opportunities for workers and convenient, more affordable services for consumers. However, the independent contractor employment model used by most of these platforms has led to the creation of many low-quality jobs. Given rising income inequality and an increasing share of temporary and contract workers in developed markets, companies relying on a gig workforce face substantial regulatory risk.
Development: Few gig workers who use platforms such as Uber, Lyft, and DoorDash earn a living wage, and most do not gain the flexibility that the independent contractor model is supposed to offer. As a result, many European countries have classified gig workers as employees, and there are signs of increasing societal concern and regulation in other markets.
Materiality: Platforms use the independent contractor model to keep …
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