Encyclopedia of Educational Philosophy and Theory

Living Edition
| Editors: Michael A. Peters

The Ascendant Fluid Work Relationships Typifying the Gig Economy

  • Octav NegurițăEmail author
Living reference work entry
DOI: https://doi.org/10.1007/978-981-287-532-7_708-1


Platform capitalism, a definite fashion of sociotechnical go-between, and business arrangement, integrated into broader mechanisms of capitalization, define digital economic circulation. To establish multi-sided markets and harmonize network effects, platforms register users via a collaborative economic culture (Lao 2018), and resort to code and data analytics to make up omnipresent infrastructures. Platform intermediation is deep-seated in the actual fashioning of a reproducible business pattern. Focusing on swift up-scaling and deriving incomes from circulations and related data trails, the pattern operates the configuration of venture capital investment which maximizes the capacity of platforms to capitalize monopoly rents. The platforms functioning in each sphere of digital circulation are to a certain degree different but share a unique coherence and series of sociotechnical routines of intermediation (Langley and Leyshon 2017).

In the on-demand economy, platforms have miscategorized their personnel as independent contractors. The issue of employee status is decisive in establishing the rights and upsides expected in the employment law, constituting components of the on-demand economy that do not cover labor relations or inherent unfair treatment of workers (Lao 2018), but communities, authentic sharing, and creative talent. With untrained and undervalued crowdwork, the prospect for entrepreneurship hardly materializes. Having an in-between classification for gig workers would supply predictable results and steadiness to businesses carrying out a crowdsourcing pattern. A third category may find a solution to numerous of the current disagreements concerning misclassification perturbing the on-demand industry (Cherry and Aloisi 2017).

Regulations in the quickly developing sharing economy should be thoroughly formulated to guarantee required consumer and worker protection at the same time as defending groundbreaking entrepreneurialism. Implementing conventional labor and employment laws to the platform economy may be pernicious to this cutting-edge peer-to-peer business pattern (Lao 2018) and may presumably result in the material reshaping of the field. Such an implementation would cause detriment both to the sharing economy and to impoverished, densely populated communities that generally use asset-sharing programs (McCabe 2016).

The antitrust labor derogation can be enlarged to include gig economy workers, through law enactment or by interpretation, enabling them to take joint action in interacting with the platform/go-between without breaching antitrust laws. Expanding the derogation to protect joint action by gig economy workers is in line with the provision’s intrinsic principles. The derogation was based on the idea that human labor is not a product and consequently limitations in the labor market were not an antitrust infringement as would equivalent hindrances in other markets. In its application, the labor derogation left out independent contractors, but this keeping out crystallized in a period that did not consider the recent hybrid work relationships (Langley and Leyshon 2017) belonging to the gig economy. Having the upside of antitrust exemption, workers would be allowed to take part in work stoppages, which constitute a successful instrument to secure economic privileges. The platforms should be also available to conceding on demands, with the purpose of raising determination and output (Lao 2018).

The Sociotechnical Routines of Platform Intermediation

The aim of platforms is established in an intermediary consistency and business pattern that depends on monopolizing market-making and the harmonization of network effects in certain specialized spheres of digital circulation. The unique intermediary coherence of the platform is to constitute multi-sided markets and integrate network effects. The sociotechnical routines of platform intermediation begin by registering users via a collaborative economic culture, and by activating a set of codes and data analytics the infrastructures which are intrinsic to digital economic circulation are set up. Platform intermediation is embedded in a business pattern that aims at scale economies and attempts to obtain rents from circulations and related data trails. The business pattern operates the configuration of venture capital investment funds that maximize the capacity of platforms to capitalize monopoly rents. The rise of the internet brought about groundbreaking prospects to find a solution to the issue of at least two-sided markets, where participants have to identify each other in order to do business. Platform intermediation selects the apparent facilities provided by network effects and the co-production of value between individuals. The unique intermediary coherence of the platform takes place via certain architecture of sociotechnical routines. Individuals registered in the sharing economy are an interconnected consumer-entrepreneur, a type of digital blend of the cautious user of exchange markets and the innovative owner of an asset range. Platforms supply statistics on the reputation of purchasers and tradespersons that can edify both parties in determining whether a transaction should materialize (Cherry and Aloisi 2017), bringing into play the infrastructures of cooperation that are intrinsic to the cutting-edge digital economic circulation. Platforms are not services or channels that merely convey circulations but industriously catalyze and configure circulations. Platforms are certain mixtures of code and exchange: when infrastructures of cooperation and network are set up and statistics is grasped and exploited, the facilitation of digital economic circulation functions. Regularizations, additions/removals, and disparities are relevant to balancing users’ requirements, and constitute the substructures of pricing mechanisms that platforms process and systematize. The infrastructural facilitation of digital economic circulation includes the judgment and assessment systems of platforms that request consumer reviews and rankings, in many instances by counter-parties (Langley and Leyshon 2017).

Platforms develop evidently maintaining reputation economies into the underpinnings of digital economic circulation, and perform operations throughout diverse spheres of circulation, but, in consonance with the business pattern, the ascendancy of all platform types activates important expenditure in the technology and expertise required for the configuration and performance of a setup which has to swiftly and steadily integrate users as a question of urgency. For a platform to expand necessitates the demarcation and overpowering of a multi-sided market network field. While degrees of investment undeniably differ throughout platform types and the particular enlarging strategies of certain platforms, the platform business pattern claims that the marginal expense of consolidating a platform is somewhat insignificant. The solution for the platform is to facilitate the ever-growing value generated by consumer interactions all through their market network. Incessantly raising amounts of users that create value and generate data is pivotal to a platform’s potential to foster and gain value in time to come and on a more relevant scale. The business pattern maintains a rather well-grounded and cogent configuration of the assessment (McCabe 2016) and backing of the platform that is a genuine object of capitalization, specifically, a venture that can access debt from stakeholders as its revenue prospects indicate that it may accomplish a return on capital. The incomes established by the platform business pattern represent the obtaining of rent from circulations and related data trails. The platform business pattern carries out the architecture of the venture capital funds constituting the main source of financing platforms. The accomplishment of the framework of venture capital funds through the platform business pattern signifies the pervasiveness of the knowledge and appraisals of venture capital companies in technological advancement by cutting-edge ventures. Embedded in a rising platform business pattern that also carries out the architecture of venture capital fund investment and validates prospects for monopoly rents, platforms give precedence to expanding and the extraction rent from circulations and related statistics trails. By accomplishing the temporal and portfolio configuration of venture capital funds, the platform business pattern is jointly involved in the current cycle of the venture capital sector (Langley and Leyshon 2017).

Employee Misclassification

The controversy with regard to employee misclassification can be explained in two distinct manners. One way to examine the matter is to admit that there has been reasonable puzzlement as concerns types of gig work that cannot be indisputably included in the double-edged demarcations at the moment identified under the employment law, as gig workers have some mutual features to independent contractors, while others are akin to employees. The issue of accurate categorization may be baffling even without the inclusion of technology (Langley and Leyshon 2017), as work can be organized in diverse fashions. The matter necessitates an adjustable, fact-intensive, and challenging to apply legal test. Constituting a third category would mitigate hesitation relating to how the test is applicable to gig workers, but if its outcomes were arbitrage and brought about demoting employees to in-between status, the quandary of deceptive contractor status would not be removed. The other way to think through the misclassification problem is to admit that arbitrage of the law is still operative, i.e., unsanctioned routines that result in erroneous categorization of what really are employment relationships and that conceal the latter as fraudulent contractor situations. But the two perspectives of the misclassification issue are not reciprocally conflicting, because it is viable to have a deficiently designed multi-factorial test and concomitantly to have enterprises arbitraging the test to capitalize on the savings from categorizing labor force as independent contractors (Cherry and Aloisi 2017).

The types of rights and accountabilities that gain ground with the third category are to such an extent relevant as the constitution of the category itself, but the achievable rights may be negligible, paralleling independent contractor status or nearly duplicating those of employees. Thinking up the third category with not too many rights, it will be exposed to arbitrage, with enterprises coercing legitimate workforce into the third category in an attempt of decreasing expenses, while constructing the third category either unreasonably large or immoderately demanding to choose to join in means only some will make the effort of embracing the category. The platforms that facilitate matching workers with users who demand their services additionally support the collection of statistics as regards the work (Lao 2018) and the labor force on an absolutely unique scale. Both personnel and customers bring on supplementary information that platform firms gather and interpret, much of which being utilized to enhance subsequent performance. Numerous platforms can determine exactly how much time and endeavor an individual allocates to a task. Supplying services via platforms may be discriminatory contingent on customer bias. Economizing on protections only on grounds of constituting a disregarded category is spurious and bears no coherent links to the principles of gig economy or the technology employed on platforms. Constituting a third category only for gig workforce would be an intricate legislative proposal, mainly to some extent as there would be difficult decisions as regards which rights and accountabilities to encompass and rule out from the categories, while deciding where an individual would be appropriate within the three categories might articulate its own doctrinal aspects and the likelihood for misclassification, arbitrage, and puzzlement. The platform economy may still operate when workers are supplied with the rights granted to employees (Cherry and Aloisi 2017).

Peer-to-Peer Transaction Platforms in the Sharing Economy

The firms that set up peer-to-peer transaction platforms in the sharing economy seemingly do not have the required infrastructure to accommodate a significant amount of employees and are not organized to sustain the minimum wage and extra pay regulations. Pressuring such businesses to either cut down their command or bear the expenses of hiring every sole trader who uses their platform will bring about industry-altering consequences. The principles, or guidance, instituted by these platforms operate to guarantee regularity, cost-effectiveness, and consumer protection. The disintegrating or material modification of the peer-to-peer sector will probably undermine deprived and urban groups that depend on asset-sharing and collaborative consumption. The downsides encountered by rivaling enterprises are exacerbated when taking into account the peer-to-peer platform economy. Current business patterns are extremely beneficial in contrast to a more established model. As the circumstances that put companies in superior business positions and expense investments of the peer-to-peer business pattern are so ample (Lao 2018), there is a more significant risk of harmful misclassification. By necessitating rigorous adherence to the present employment classification structure, such firms would have to label their labor force as employees. Compelling this transition would considerably rule out the business upsides of the peer-to-peer business pattern, and thus impede the rationale to miscategorize workforce as independent contractors (McCabe 2016).

As employment relationships catalyzed by the peer-to-peer platform economy cannot be integrated precisely in either the employee or the independent contractor categorization, judges are constrained to apply improper, conventional categorizations to a swiftly expanding labor force. Furthering entrepreneurialism is an essential strong point in the peer-to-peer platform economy, and pivotal to the advancement of such business acumen is the lack of restrictions in making decisions. If peer-to-peer enterprises are constrained by extra pay requirements, they are compelled to restrict the options workers can make with reference to their schedule. The addition of “dependent contractor” as a third employment classification would enable the successful regulation of peer-to-peer ventures while allowing adequate adjustability to further resourcefulness and growth. Setting up a well-grounded paradigm for employment classifications may cut down the amount of misclassified personnel in the peer-to-peer sharing economy (Langley and Leyshon 2017), may decrease the proportion of legal dispute deriving from inaccurately categorized employees, and may permit firms to embrace groundbreaking manners in including jobs in the market. A peer-to-peer market derogation would keep out all labor force in the peer-to-peer platform economy from access to the extra pay requirements, applying to all individuals who use technological platforms to get involved in peer-to-peer dealings. The creation of such derogation may compel peer-to-peer enterprises to assume more accountability for self-regulating, may enable business acumen to thrive, and may set up a coherent, assessable standard for employment categorizations, decreasing employers’ exposure to litigation and increasing individuals’ right to use workplace protections (McCabe 2016).

Enlargement of the Antitrust Labor Derogation

The derogation holds that labor markets are dissimilar to other kinds of markets, and that the practicality of competition intrinsic to the antitrust laws should harmonize the feasibility of allowing workers to solicit decent wages and satisfactory working conditions. The antitrust law mainly encourages dynamic competition and rules out price adjustment in regular markets, but a special case is made for individuals who may proceed as a single unit to gain higher income, admitting that joint undertaking establishes prices and restricts competition among workers. If a separate entrepreneur were really self-governing, available to cooperate with various users, not reliant on a particular employer for her source of income, and experienced to capitalize on her venture contingent on her own performances and choices (Cherry and Aloisi 2017), then premises for the support of the labor laws or the antitrust labor derogation would be less convincing. If independent contractors were entrepreneurs in competition to provide items to a purchaser, expanding the labor derogation to them would in fact legitimize a standard competitor stipulation not to participate. Enlargement of the antitrust labor derogation to include joint undertaking by gig economy workers would be in line with the principles intrinsic to the derogation, enabling them to assemble their bargaining capacity and negotiate in concert with the platform/go-between for significant upsides and compensation. An antitrust derogation safeguarding joint undertaking by gig economy workers would have certain growing effect on price or decrease in productivity, but that influence should be equivalent to that developing out of collective bargaining by employees (admissible under present law) (Lao 2018).

The conditions of gig economy workers are somewhat comparable to that of standard labor for whom the derogation was planned to advantage. Even imagining that gig economy work relationships can be included in the employment categorization without thoroughly prevailing over the pattern, such individuals who work occasionally would presumably see decreasing work prospects. An uncomplicated enlargement of the antitrust labor derogation would enable gig economy workers to unite their bargaining capacity and conjointly discuss a settlement with platforms (without the limitations of the antitrust law) to acquire a more equitable proportion of the joint surplus, free of losing the surplus by disrupting the pattern. Having the upside of the derogation would further gig economy workers’ endeavors to obtain more advantages and assurances from their particular platforms/go-betweens as there are determinants for platforms to discuss terms without equivocation. A consolidated work strike constitutes an efficient tool for labor force, and an antitrust derogation would allow them to participate in such work stoppages without breaching the antitrust law. A platform’s self-concern in increasing confidence and output should stimulate it to satisfy, or comply with, those workers’ requirements that do not endanger vital sources of the platform’s favorable circumstances. The prevalence of social media may provide further ascendancy to workers and thus they can effortlessly mobilize walkouts, energize support, and differently persuade public opinion with respect to relative rightfulness of the conditions in manner that were not as much achievable before. An enlargement of the antitrust labor derogation to safeguard the joint undertaking of gig economy workers would relieve labor entities of these antitrust limitations and make them more adequate catalysts in assisting gig economy workers in being relevant (Langley and Leyshon 2017) and attain further upsides and security. The enlargement of the antitrust labor derogation, by law enactment or via interpretation, would allow gig economy workers to participate in joint bargaining with the platform/go-between over remuneration and upsides topics without breaching the antitrust law. It would be in line with the principles intrinsic to the antitrust law and the derogation itself to do so, as gig economy workers are not the freelancers that judges and enforcement agencies have been thinking of when they left out independent contractors from the bounds of the derogation. The exemption is a way to promote the workers’ concerns in acquiring a suitable proportion of the surplus that has been collectively produced by the platform and the labor force, free of much risk of subverting the business pattern in the process. The exemption would be useful to consumers and also provide more alternatives and adjustability to workers (Lao 2018).


  1. Cherry, M. A., & Aloisi, A. (2017). ‘Dependent contractors’ in the gig economy: A comparative approach. The American University Law Review, 66(3), 635–689.Google Scholar
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  4. McCabe, E. E. (2016). Not like the others: Applying the fair labor standards act to the sharing economy. Kansas Law Review, 65, 145–176.Google Scholar

Copyright information

© Springer Nature Singapore Pte Ltd. 2019

Authors and Affiliations

  1. 1.Spiru Haret UniversityConstanțaRomania

Section editors and affiliations

  • George Lazaroiu
    • 1
    • 2
  1. 1.The Cognitive Labor InstituteNew YorkUSA
  2. 2.Spiru Haret UniversityBucharestRomania