How California regulate company in Gig Economy Essay Sample

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Gig Economy in California
The gig economy continues to significantly impact California’s market. Digital technologies revolutionize its retail marketplace today, which has led to the rise of on-demand commerce. Smartphone applications and internet-based platforms enable consumers of on-demand services to be matched with service providers. These collections of markets make up California’s gig economy which can be defined as a type of market system that connects service providers to prospective on-demand clients or companies with the help of digital solutions. The digitization of the economy continues to drive California’s growth because of the expansion of on-demand services that creates more job opportunities for potential gig workers (Donovan et al. 1). Digital-based platforms found in California such as Uber and Lyft allow workers to enter into formal agreements with companies to perform a specific job after which they are compensated. The pricing in an economy may vary as some companies may set the price or allow the service providers to set it. The gig economy is active in various sectors such as hospitality, healthcare, delivery services, or business services. However, an individual contractor driver isn’t classified as an employee of a gig economy company they drive for. So, they are not entitled to the same benefits as the company’s employees (Donovan et al. 2). Working in the gig economy is unprofitable for contracted drivers in California because they will experience financial instability in the long term.
Pros of the Gig Economy
For an individual contractor driver, working in California’s gig economy can offer several benefits. First, it offers them flexibility where the driver can choose the companies to work for, set their schedule, and choose the jobs to apply to. With time, they can build their reputation by offering reliable and exceptional services consistently to clients which will ensure they receive higher ratings for their services. When a gig worker continues to receive positive reviews from companies, they have the opportunity to get the job that best suits their interests and they can enjoy their job improving their work-life balance. The internet-based platforms give them greater opportunities to connect and find jobs with various on-demand companies.
Second, an individual contractor driver can enjoy greater independence in California’s gig economy. They can use their car in a way that suits them best and don’t have to be controlled by a company. If they are hired for any job, they will execute the task following their conditions. This is because the company can’t control the hours or routes they will use. They can also work for other companies. Fourth, a contracted driver in California’s economy has access to a variety of jobs. California’s economy brings together a diverse set of on-demand companies for the driver to choose from. Their job isn’t limited to only a single company where they may have to do monotonous jobs daily. Being in the economy offers them the opportunity to do different driving jobs with varying levels of difficulty such as transporting clients over long distances or driving in unfamiliar travel routes making their job more interesting (Mulcahy). The variety in their job adds excitement because it eliminates the monotony of doing the same tasks. Also, engaging in challenging tasks enables a driver to develop problem-solving skills which encourage them to be more creative in their assignments.
The positive impact of the gig economy has been evident during the ongoing pandemic. There has been an economic downturn leading to the loss of millions of jobs. This is evident from data released from the Bureau of Labor Statistics that shows about 22 million jobs were lost in 2020 in America. In California, more than a million jobs were lost since the onset of the pandemic. Due to the severe effect of the Pandemic, many people in full-time employment have been affected by the collateral consequences of Covid-19, which has caused reduced working hours and pay. Therefore, app-based platforms such as Uber, Shipt, and Lyft have assumed more significance, as they offer a flexible way for people to boost their income. However, gig workers have complained of minimal protection and benefits while working in these companies, some feel the companies are exploiting them for their services. Due to this, lawmakers and gig workers have sought to improve protection and benefits for workers. Further, the pandemic has helped shift significant attention to independent workers and highlighted the important role gig jobs can play in reviving the ailing California economy (Lehre). For the individual contracted driver, the pandemic can help increase the free-market incentives by encouraging innovation and providing greater competition in the gig economy as lawmakers seek to provide better options for drivers to enhance their job safety.
Cons of the Gig economy
Despite some of the immense benefits offered by the gig economy, the sector has many drawbacks which undermine its attractiveness. Workers in California’s gig economy don't enjoy various employee benefits and protections. The absence of this traditional employment relationship means that they don’t have the sense of economic security, which full-time employees receive through benefits and protection. This makes workers vulnerable since they don’t enjoy provisions, such as paid sick days, unemployment benefits, minimum wage, and health and retirement benefits. Their lack of job security is further exacerbated by the absence of unions that can fight for their rights. Companies in the economy despise unions, so workers don’t have a platform where they can advocate for improved benefits and protection. By being labeled as independent contractors, the workers lack the opportunity of forming workers' movements to protect themselves from exploitation by the companies (Marx). For example, when Uber reduced its rates in California, their contracted drivers had no mechanism to air their complaints and ensure proper compensation. Individual drivers were at the mercy of the company.
The gig companies in California continue to earn profits at the expense of poor treatment of their workers, who have to endure the low-paying jobs....