The Gig Economy in Australia for The Jampod Gigsters

The Gig Economy in Australia for The Jampod Gigsters

By Sue Ellson BBus MIML MAHRI CDAA ASA MPC WV FIGT

I was invited on to The Jampod Gigsters podcast hosted by Angela McCann from the Money for Jam App in Johannesburg, South Africa and she prepared some questions before our interview.

Her goal with this podcast interview was to gain a better understanding of what the gig economy looks like in Australia. She explored the similarities and differences in gig work, gig technology and gigsters.

All of the details are online at https://www.m4jam.com/the-jampod-gigsters/#australian-gig-economy or you can watch the video below. The following text goes in to a lot more detail.

1. What gig platforms are available?

Australia provides access to both international and local gig platforms.

The biggest challenge in many respects is the lower population in Australia (less than 26 million in total). The population is concentrated in capital cities and along the coast with huge expanses of desert in the middle (land size of 7.692 million square metres). Australia is the planet's sixth largest country after Russia, Canada, China, the United States of America and Brazil.

In the last 10 years or so, there has been a range of initiatives (funded by various levels of government and local commercial interests) to encourage people to live in regional cities and this has helped concentrate demand in new areas, but again, in most cases, not enough 'requests' for gig platforms. Even big platforms like LinkedIn's ProFinder are still not available in Australia.

If you asked the 'person in the street' about the Gig Economy and the jobs available, they would probably think about applications used for ride sharing (Uber), deliveries (Deliveroo), accommodation (AirBnB) or tasks (Upwork or Fiverr).

However, what has been interesting is that there are some local gig platforms for location dependent tasks that are Australian grown and developed. They typically focus on particular niches.

Weploy – Australia – business support temporary roles – work to live rather than live to work.

Sidekicker – Australia – temporary roles – hospitality, events, exhibitions, office administration, industrial, promotions, retail in partnership with Seek (job advertisement site).

ServiceSeeker - Australia - alternative to Airtasker and suitable for businesses and tradespeople.

Found Careers – Australia – find local jobs via your mobile phone, most people who use the platform are mostly under 35 years of age.

Hireup – Australia – National Disability Insurance Scheme (NDIS) registered online platform for people with disability to find, hire and manage support workers who fit their needs and share their interests.

2. Opinion on how gig platforms will respond to the labour court pressures

Here in Australia, there are various ways for employees, contractors, casuals, temporary workers, gigsters etc to raise issues of unfair treatment, poor working conditions, inequality etc.

We have the Fair Work Commission - Australia's national workplace relations tribunal and the Fair Work Ombudsman to provide information and advice about workplace rights and obligations. The Australian Human Resources Institute provides human resources managers with practical resources and information to ensure that enterprises are meeting governance and compliance requirements.

Interestingly, gig workers in Australia are generally classified as 'independent contractors' and not employees. If an 'independent contractor' has their main source of income from one source, they are technically no longer an 'independent contractor' for taxation purposes. From what I can see, the law in Australia hasn't quite caught up with gig workers, but all gig workers are required to declare their income from all sources and if they earn more than $75,000 a year, pay Goods and Services Tax (GST). This article from 2018 goes into more detail.

Some gig platforms have chosen to leave Australia rather than meet local compliance requirements.

3. How has Covid-19 impacted on the gig economy?

Australia has had a very integrated and supportive response to Covid-19. The Australian Government has established JobSeeker to support people who have lost their job and JobKeeper has been established to help support businesses with payments to keep people in work (although some people have missed out on both of these options).

The Creative Industry has responded with a website to log 'I lost my gig.' Other unions, professional associations, industry groups and various levels of government have created grants, schemes, projects and initiatives to help people impacted by Covid-19.

When the lockdown started, the demand for many gig workers fell overnight. Ride share providers could be logged on to multiple platforms and still not secure a gig (and the government also had limits on numbers of passengers, a requirement to sit in the back seat etc). Conversely, the number of home deliveries for prepared food and groceries appears to have increased substantially and the number of online purchases has also increased (meaning many businesses have switched from shop fronts to online).

Gig workers have had to be agile, as have many other workers.

4. Industry trends in the gig economy

It appears from my experience working with clients, hearing their stories and from general observations that the gig economy platforms need to constantly innovate to maintain market share.

More international players have entered the local market and specific apps for niches keep appearing - in ride share, we now have Ola (Indian), Didi (Chinese), Shebah (Australian but with female drivers only). These platforms appear to be highly subsidised to gain market share and then once established, the rates increase. Ride sharing has completely disrupted the local taxi industry and has improved it in many respects, but also triggered protests due to the reduction in value of a 'taxi license.'

Tech savvy younger people appear to be more inclined to try gig apps, particularly if they have work restrictions (related to a student or working holiday visa) and have managed to have low operating expenses like shared (or home-based) accommodation, a bike (pedals, electric or motor) and are willing to buy low cost food ingredients at fresh food markets and discount grocery stores etc.

I have also seen people use gig apps to 'meet people' and supplement their income. This is okay if they don't 'need' the money to survive, but a lot of time and energy is spent chasing gigs with no return, especially if they don't have a 'Reviews' profile. (In my Gigsters book, I recommend that people use gig apps as a form of lowly paid networking to help acquire skills and introduce themselves to future potential clients or work and to be selective in the process of seeking and accepting gigs).

Ultimately, the gig platform needs to provide benefits to both the purchaser and the provider and if that connection and service is not seemless and reliable, it won't succeed.

5. Your view of the gig economy in emerging markets who are lagging developed economies

Emerging markets are at risk of being exploited by savvy gig platforms that have utilised artificial intelligence, machine learning and data analysis to make predictions about the best ways to infiltrate the local market. With more and more people having access to mobile phones and the internet, it is possible to reach more people much more quickly than in the past, but they may need to make local language allowances and develop apps that can rely on lower levels of internet reliability.

As with all economies, individuals with low levels of digital or language literacy run a greater risk of missing out on any type of work if enterprises utilise platforms rather than referrals to source human support.

On the other hand, if individuals are savvy and can complete tasks remotely, they have the opportunity to bid for work at lower rates than developed economies and this has put people in Australia at a severe disadvantage. There are now lobby groups (like Freelance Jungle) to advocate for Australians to secure work at local rates and for enterprises to be encouraged to pay for local freelancers at reasonable rates. There are also enterprises that spruik outsourcing from Australia to the Philippines because they speak English and only have a four hour time difference.

6. What are the most in demand gig jobs for unskilled giggers?

This is most likely to depend on the location and the demand in that area. Higher socio-economic areas have the potential to have more food delivery requests and city apartments regularly receive grocery deliveries. Suburbs close to the city appear to have many people on electric or motor bikes making food deliveries.

In the past, big events have brought in large numbers of temporary workers (but these events are not occurring at the moment). Local government councils are currently employing people to spray disinfectant on surfaces that receive regular human contact (traffic light buttons, park benches etc).

7. What are the demographics of their gig workers?

It appears that the delivery drivers are from multiple countries of origin and mostly under the age of 25 and not in full time employment. However, other sectors have mixed age groups and backgrounds.

8. What is the gig worker force quantity and the active gigsters as a ratio?

This is very hard to measure - as is the unemployment rate. Many people in Australia are underemployed or unable to access opportunities. Many jobs are never advertised and not 'allocated' by gig apps. I would say overall that the ratio of gigsters fluctuates, particularly as people realise that they are often making a 'loss.'

My recommendation, until the industry develops and matures, is to only use gig apps as a paid networking opportunity and a supplemental income. My three best tips for securing work including networking, referrals and voluntary work.

9. Are there enough jobs for the appetite of the gig workers?

Overall, I would say no, but on the other hand, some new apps in new niches cannot attract enough gigsters and plead with gigsters to accept gigs (Go-Fetch). Some gigs attract so many applicants that it makes it very difficult to secure gigs, especially if the gigster does not have enough reviews or recommendations.

10. Are their users typically employed/unemployed?

There is a government funded security net for unemployed people in Australia and gig apps can be a way to supplement income or help people re-enter the workforce, particularly if they have other mental health issues that make them unsuitable for certain types of work or interaction. However, if they have been unemployed for a lengthy period, they may not have access to the resources they need to secure gig work or they can end up in financial difficulty paying the entry costs (for example, to deliver food, they may need to buy a food bag and this cost could be more than they can afford). I have not met anyone who has used gig app work as a full time income source.

11. If employed, does their current salary, cover their household costs, if not, what is the average shortfall?

I don't have access to this information, but once again, it is my perception that typical gig app work will not match the average full time wage in Australia of $1,720.90 per week in November 2019.

12. What does the average user earn per month through gigs?

This would depend on demand and location and hours the person spends doing gig work. As stated earlier, I believe it would only be a supplemental income and I do not have access to this data as it is privately held by each gig app provider.

13. What is the average pay out per task?

Again, this depends on the type of gig work completed, the level of skill or expertise, time taken, distance travelled etc. I know that a local Uber driver was lucky to receive more than $20 per gig and in four hours, would never make $80.

14. How are they using this income?

This depends on the socio-economic group. One mature lady I know who accepted tasks to 'fill in time between other gigs' would use it for entertainment and recreation as she was already well established. I imagine most gig app workers use it for basic necessities or to make it a lifestyle choice where they can choose the hours they work and manage their income very creatively.

15. What is driving the gig economy?

I believe that technology is changing at a rapid rate and entrepreneurs see a 'pay per task' model as very lucrative in the longer term. Individuals are often seeking more flexibility and freedom.

Sadly, I believe that there are some bad ethics at play with technology being used to exploit vulnerable and marginalised workers who look at the 'dollar amount earned' rather than the dollar amount earned less expenses. When drivers add in the cost of parking, speeding and road fines, their entire income can be wiped out instantly. Here in Australia, you cannot even touch your phone if your car is not stationary and the engine turned off which means that you often miss out on gigs.

Consumers are starting to expect instant results and quick access to resources, often at low cost and don't want to go through the training and development of individual people. If they get a 'taste' of this support and find it quick and easy to secure, they will increase demand.

I still believe that more regulation needs to be introduced to avoid exploitation.

16. Is digital training offered to gig workers?

Some gig apps require people to complete online training before commencement, often without pay or for an additional fee. There are a lot of free and low cost training options in Australia, so I would encourage every gigster to source additional training. For example, local libraries provide free access to LinkedIn Learning.

17. Is training a pre-requisite to get assigned a job?

It depends on the gig app - and there are also other requirements for certain apps - for example, you must be over a certain age to deliver alcohol and you must ensure that a person over 18 receives the goods.

18. Other comments

As a solopreneur myself, I have found 99designs (which also has a local Australian office) a great resource for sourcing a book cover designer as it was so easy to view the portfolios of the various designers so that I could choose who to work with (must more user friendly than a local book designers website). However, I was unwilling to let people complete work and then only pay the winner for their time. This is another form of exploitation. An example of both good and bad uses of technology.

I believe a Gigster is a person who uses a variety of technology to attract aligned gigs rather than a person who joins an app and sources gigs via apps exclusively. I believe the gig economy needs to develop and mature to create a respectful marketplace.

As an example, Weploy, in response to Covid-19, developed a separate platform to enable people who were recently unemployed to access opportunities and they reduced the number of people who were able to join the app to ensure that those already on the platform had the best access to opportunities. They also ensure that each Weployee has superannuation, insurance, tax etc all included before they receive payment. There needs to be more ethical leadership in gig apps.

Joining an existing gig app is a great way to develop and test ideas for budding entrepreneurs who are considering developing their own app as either an improvement of an existing app or as an aggregator of other apps (just as there are currently aggregator websites). I see this as being a future trend where one app will automatically feed in data from multiple other apps.

I believe that the amount the gig app provider takes from each task needs to reduce over time and that the profit needs to be increased for the provider of the task. As a purchaser of a service, I don't want the majority of the fee going to the app provider (but I do understand they need to cover costs) - I would rather see it go to the provider of the task.

Public financial reporting could also be necessary in the future to ensure that major companies meet local tax, governance and reporting requirements.

I trust you have found this LinkedIn Article helpful. I welcome your thoughts and other suggestions in the comments below.

See my other LinkedIn Articles here

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#gigeconomy #futureofwork #gigsters #gigwork #gigworkers #careers #employment #sueellson

First Published: 10 June 2020

Last Update: 10 June 2020

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Sue Ellson BBus, MIML, MAHRI, CDAA, MPC, ASA, WV, FIGT is an Independent LinkedIn Specialist, Business and Careers Consultant, Trainer and Author.

More information at https://www.dhirubhai.net/in/sueellson and https://sueellson.com