Gig economy set to double as workers shun traditional employment

Gig economy set to double as workers shun traditional employment

  • New independent study reveals growing popularity of on-demand work as gig economy is set to reach over five million by 2022
  • The growth of the gig economy will generate an additional £1.7 billion in higher incomes by 2022, benefiting students and carers in particular
  • Public First research shows riders are choosing gig working over traditional employment in search for flexibility and higher earnings
  • Report underlines that this new way of working is here to stay and challenge to Government to "explore how security can be increased for those in the gig economy, whilst retaining the flexibility that attracts people to it"

The gig economy is likely to grow to over five million people by 2022, according to new research by policy consultancy Public First, commissioned by Deliveroo. The paper lifts the lid on the changing nature of work in Britain and is based on surveys, focus groups, and modelling.

Public First's research suggests that the gig economy has the potential to more than double in size over the next five years, generating an additional £1.7 billion in higher incomes, or around an additional £540 a year for 3.2 million workers.

The research also finds that those with other responsibilities particularly benefit from growth of new way of working, with an additional 400,000 income-earning opportunities for students and 1,300,000 opportunities for parents and carers available in the next five years.

The report is essential reading for those wanting to understand the motivations and choices of Deliveroo riders and those who choose to work in the on-demand economy. It finds that riders working with Deliveroo, one of the biggest gig economy companies in the UK, are actively choosing to shun traditional employment, primarily as they seek greater flexibility in their working patterns. Further, most riders have an ambition to remain self-employed, either in the gig economy or setting up their own business.

Key findings of the report:

  • Deliveroo riders value the flexibility of their work more than anything else (when riders were asked what they liked most about riding for Deliveroo, over 80% chose the option of "Flexible Work") and in particular view it as a positive change in comparison to previous employment.
  • Riders who have specific responsibilities in life such as studying or caring for another, benefit most from the type of work that Deliveroo offers.
  • Working with Deliveroo is a labour market choice for riders as they have the option of taking traditional employment if they want it, but are choosing gig economy work instead. Only 6.5% of riders are working with Deliveroo because they couldn't find employment elsewhere.
  • Focus groups revealed that riders who had previously been in traditional employment had little desire or intention to return to this form of employment and the 'overbearing' bosses it brings.
  • The money that riders make working with Deliveroo tends to be better than what they could make – or are making – from other jobs (such as working in supermarkets, on factory floors and directly for takeaway restaurants).
  • The financial rewards of riding are amplified for those who are younger, who would otherwise be earning less if on the minimum wage, which is £5.90 an hour for somebody between 18-20. The average Deliveroo rider earns over £10 per hour.
  • Like other types of gig economy work, for the majority of riders, the income they gain from the gig economy is additional rather than a replacement for more traditional employment.
  • Nearly 40% of riders surveyed for the research said they would start their own business or work for themselves if they could no longer work with Deliveroo, while only 8.5% of riders stated that '"would look for a more traditional full or part-time job".
  • Deliveroo riders who have caring responsibilities or who are students place greater importance on flexibility than other groups.
  • Deliveroo riders are positive about their working environment. When surveyed on key characteristics of their work environment - such as flexibility, opportunities to develop and the availability of work - the majority of respondents were positive in every one of the ten characteristics surveyed.
  • Deliveroo riders have complex views on social protections. When prompted in the survey, riders showed a preference for some form of holiday pay and sick pay but their priority was for improvements to their way of working with platforms, for example improving the app. When asked about Government intervention, rider preference was for Government action to tackle street crime and lower  cost of living issues.
  • The report concludes that "the challenge from a public policy perspective...is to explore how security can be increased for those in the gig economy, whilst retaining the flexibility that attracts people to it".

Click here for a full copy of the report 

The findings are based on a survey of over 2,500 Deliveroo riders and focus groups with Deliveroo riders held across London Manchester, Loughborough and Exeter in August and September.

Commenting on the research findings, Dan Warne, UK MD of Deliveroo said:

"The world of work is changing and the flexibility that comes with working with companies like Deliveroo is hugely popular, and that is only set to grow. Deliveroo is proud to offer well-paid work that riders are actively choosing instead of traditional jobs which do not allow people the freedom to choose when, where and whether to work.

"This important report sheds light on the motivations and priorities of those who choose on-demand work. With more and more people choosing to work this way, it's important policy makers take onboard the views revealed and move towards ending the trade off between flexibility and security in employment law."

Rachel Wolf, founding partner of Public First said:

"The main conclusion from our research is that riding for Deliveroo is a choice. Riders are making this choice because the work is more flexible, independent, and active than traditional forms of employment. Many are combining it with other activities, such as studying or looking after a relative. Put simply, Deliveroo adds to the options people have if they want to earn some money. "The research also shows that the gig economy is likely to continue to grow rapidly in the coming years. As it grows, it is important to have an evidence-based debate about how policymakers should respond. Part of this debate should reflect our key finding that few riders are contemplating a return to traditional employment, which they do not feel provides either enough flexibility or necessarily the security that many suggest is absent from the gig economy".

Selected quotes from Deliveroo rider focus groups:

"I have the best boss. His name is iPhone and he doesn't get angry.", male rider, Manchester

"If I've got an exam or coursework then I can work around it", male rider, student, London

"Pay is so good for students", female rider, student, Exeter; "When I tell people how much I earn in an hour, they are like, 'What!?'", female rider, Student, Exeter

"For another company, we need to be there on time, and we need to leave on time. That's the problem. Sometimes they can ask us to do overtime and we don't want to do it", male rider, parent, London

"This job is good to earn some money and save some money and to start a new business, that's my thinking", male rider, parent, London

"If Deliveroo didn't exist we would be doing something we don't like", male rider, parent, Manchester

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