The Gig Economy: fragility and risks of a digital myth

30 Oct 2017

In the world of retail, even more than in other sectors, the (poorly positioned) alternative between "digital" and "non-digital" can be equivalent to "an alternative between "growth" and "closure". "Digital" is therefore linked to various positive meanings in the economic and social sphere: innovation, competitiveness, inclusion, rationalisation, efficiency, service, productivity, profitability and many others. In our sector, we have come to understand and decide in a biunivocal way, distinguishing between the retailer on the one hand from the consumers on the other. Those who create the value on the chain that links these two subjects are not usually considered when measuring the model. The methodological vacuum is obvious and, as we shall see, places heavy limits on the relationship between the company and the market. The so-called Gig Economy is one of the phenomena that lend themselves best to a critical examination of the digital economy. The "Gig Economy" is understood as a non-continuous working relationship, applicable only to a contingent request for services, products or skills. In the Gig Economy, supply and demand are handled online via platforms and dedicated apps. Well known cases include the temporary renting of rooms, such as Airbnb, alternative private transportation, such as Uber or home delivery (for example, ready-made meals, such as Deliveroo and Foodora). Workers are occasional by definition, and are hired for temporary activities, while the company is responsible for managing the technological infrastructure and promoting the service/product. The increasingly widespread use of smartphones and apps provides the premise for the success of this model, which is very simple: outsource deliveries through young people, students, unemployed, or full-time workers aiming to round up their income. The Gig Economy has quickly lost its aura of modernity and progress, and has ended up re-creating a widespread version of a work pattern typical of the manufacturing industry from the last century, namely piece work. In this case, payment is on delivery with the "rider" remaining responsible for the means and the risks. In recent months, riders for Deliveroo and Foodora have gone on strike in Spain, France, the United Kingdom and Germany, and the protest then later came to Italy. There are delivery companies (Just Eat) that offer three different contractual possibilities (schedule, number of deliveries or mixed). Others like Glovo have also developed a "rider loyalty rating" based on availability and delivery times, which uses an algorithm that takes the amount of orders delivered by the carrier into account. Losing positions in the ranking means that the slot times are assigned to other delivery people. The items on the Gig Economy negotiating table include a lack of protection, low earnings of a few dollars or euros per job and high risk variables (traffic, weather, prolongation of individual delivery times, accidents, security). The origin of the phenomenon is certainly low-cost culture, especially in its worst and widespread form: if the customer is the centre of everything, then nothing could be better than engaging them or keeping them with the continuous and systematic dumping of prices. Obviously, this implies the recovery of marginality and competitiveness in relation to competitors through the deterioration of the supply and working conditions within the network of available workers. The social and environmental sustainability of businesses is an issue of increasing relevance - and a prerequisite for the purchasing choices for ever larger consumers - and should be seriously considered by retailers within their digital innovation strategies. Mistakes come at a heavy price, as proven by the recent case of Carpisa. A study by PwC ("Think Sustainability - The Millennials View") from the end of last year focused on the most significant target group of buyers, which is largely comprised of digital natives. The indications are clear: more than 80% of millennials are willing to pay more for sustainable products, while 56% avoid brands that do not operate in a sustainable way. Where this is not the case, more than half of them react by renouncing the product or service, and one third shares their disapproval on social media. The importance of sustainability within the purchasing process is increasing. Avoiding it means increasing costs, including internally. According to Lorenz Isler, Head of Sustainability for Ikea, "More and more companies understand that we can not avoid sustainability. The qualified workforce evaluates companies on the basis of ethical principles and is giving ever-greater importance to employers' sustainability efforts." One of the strategic objectives of digital innovation is defined as follows: to make social responsibility part of ordinary business management, especially in retail.