It was Jazz performers who originally coined the term ‘gig’ in 1920’s America, as an abbreviation for the word ‘engagement’. Since then the word ‘gigging’ has been used in a broader sense to describe the act of working for a sum of money.
Moving on into the 21st century, the concept of ‘gig economy’ pops up. The term is now used to refer to a labor market dominated by freelancing jobs, allocated and delivered through a digital marketplace without assigning long-term employment contracts.
Short-term jobs and self-employment are not new concepts but the introduction of matching and allocation of these ‘gigs’ through online platforms and applications by companies is relatively new.
It is estimated by Intuit, a software company, that by 2020 more than 40 percent (60 million people) of America’s labor force, will be working as freelancers. As for the rest of the world, it has been argued that such online platforms could become a catalyst for sustainable employment through tackling the demand and supply mismatch of labor worldwide.
While the impact of the gig economy, and whether or not it will take over is disputed, it is a rising trend in the MENA as more on-demand companies emerge and online gigs become prevalent. Platforms like Nabbesh and Tasmeemme.com, then Careem and Fetchr, are offering new opportunities in the Middle East. The duration and nature of gigs can vary a lot, they can be anything from a three minute survey to a 14 month long project.
According to management consultants McKinsey, Europe and the United States see around 162 million people rely on gigs, which roughly accounts for 30 percent of the working population. Only 15 percent of these use a digital medium to hunt for those gigs. As the on-demand economy keeps growing, we are bound to witness this percentage increase rapidly.
Benefits for the MENA
The MENA region has one of the highest youth unemployment rates globally reaching 30 percent. So capitalizing on the gig economy is seen as a way of increasing labor employment rate and shoring up income inequality.
Despite being educated, the MENA women workforce employment remains well below the 63 percent global average, with only one in five of women working. Luckily, countries within MENA enjoy a comparatively high growth in smartphone adoption, presenting a big opportunity as they can exploit that to increase gigs, hence employment.
Stella & Dot is a Western success story. Jessica Herrin, the founder of the online fashion social selling platform, tapped into the underserved part-time women’s market, where women driven by entrepreneurial spirit are in need of part-time jobs. She now has over 50,000 women from six countries doing direct sales keeping around 35 percent of the sale’s value. Herrin not only managed to grow her business but transformed lives. Similar initiatives and startups in the MENA focusing on flexibility can become huge success stories as women in the region are becoming more educated and tech savvy. On a regional level, Nabbesh, MENA’s freelancing website is opening a window for women to participate remotely and part-time by putting their skills and education into good use.
Since the MENA is politically unstable and is likely to hold the same status in the future, gigs can help some generate income during wartime, by leveraging their education. This was seen in the case of Gaza, where 40 percent of the population still live below the poverty line. Hence, the educated turned to online gigs for better opportunities. This can be duplicated in various regional countries that suffer instability and high employment rates, including Yemen, Syria and Iraq, if essential internet speed and penetration improves. Ana Mehani currently operating in six cities in Yemen, is somehow trying to address the pressing unemployment issue by connecting vocational workers with clients.
Why should we be wary of it
While gigs can be liberating, they can also create a sense of insecurity. Workers can often race for a bottom rate in order to get work.
The 'Uber of X companies' (or the on-demand services) are exploiting workers by not offering them benefits such as sick leaves and healthcare to cut costs, in other words, not treating them as employees. By exploiting them, they are cutting costs and increasing profits. In other terms, only increasing income inequality rather than reducing it.
Although companies claim that workers enjoy flexibility, they aren’t always given that luxury. One example being the X company Deliveroo. An undercover Financial Times investigator tried to discover what was the work status of company drivers. She realized she had no choice but to commit to four shifts per week which could not be changed, while weekend shifts were mandatory too, although she was told that she had to commit to a minimum of two evening two to three hours.
The gig economy is seen as a step towards automation. The fact that a task can be codified and isolated so it can be outsourced, means it can be automated. For example, Careem is expecting to introduce driverless cars in Dubai in the near future. This becomes problematic if the youth turn to unskilled gigs full time like becoming a Careem driver or a courier and not receiving skilled training. This will affect the future of innovation and productivity.
Flexible labor market is seen as a competitive point and an invaluable strength for economies in the West. Although they respect human rights, when it comes to employment within the gig economy some incidents shed the light on law breaches, like labor exploitation and tax avoidance on full time contracts.
The question remains, will the MENA mirror some of the West’s unlawful acts by exploiting workers or will it address the costs that come with the gig economy while reaping the benefits?