Why Does The Gig Economy Pay So Inflexibly?

After thousands of years of farming with only the sun to enforce a schedule, the Industrial Revolution introduced working hours to the UK for the first time. But, after more than 200 years of clock-watching, the gig economy promised to change things.

With the real-time balancing of demand and supply, these platforms enabled a totally new way of working, offering complete flexibility. And it’s proven a tempting offer to many, with nearly one in six UK workers ‘gigging’ each week. Tellingly, the majority list the ability to set their own hours as the primary reason for participation.

However, while much of the public debate has focused on what these companies pay workers, a more interesting contradiction can be found when you examine how & when they pay instead. Despite flexibility sitting at the core of their appeal, many gig employers still pay weekly; the same system used to compensate those first factory workers in the 18th century! 

Yet, paradoxically, many traditional employers no longer pay in such a static manner. Organisations like Tesco, Capita and the NHS now pay their employees on-demand, allowing staff to access their earned wages when they need, rather than simply when payroll runs. Across the pond, long-established employers like Walmart and McDonald’s have also embraced this flexibility. 

This reveals an uncomfortable truth – that incumbents like the public sector now pay more dynamically than many of the disrupters whose entire business models centre around flexibility. To truly deliver on their employment promise, and to remain competitive recruiters, gig platforms need to start rewarding flexible work with flexible pay.

Much like the gig economy itself, this new way of paying was born from new technology, and it feels like a natural progression for gig firms to embrace it at least as quickly as more traditional companies. In fact, the logic for them to do so is especially sound as the gig economy continues to dominate jobs that used to be paid in cash: such as taxi drivers, food deliverers and couriers. These jobs often leave staff with expenses to pay for completing their work, such as fuel, and weekly pay creates a gap between these costs and the payment for self-employed roles. This can cause personal cashflow issues for workers that simply didn’t exist when pay was ‘cash in hand’. Furthermore, with the majority of participants using gig work to find a second job, the time delay between work and reward becomes even more frustrating. 

In a world where many inflexible jobs pay on-demand, there is no excuse for flexible work not to come bundled with flexible pay. And, with Level now offering On-Demand Pay as an API, development timelines and product roadmaps are no longer justifiable excuses. Gig firms are, by their very nature, tech firms. Embedding a few lines of code for the sake of the people who power their platforms should be a top priority.

The result is being able to truly deliver on the promise of a new way of working – one that finally puts staff in the driving seat.