Measuring the Gig Economy

The ‘gig economy’ is a new labour market where employers use online platforms to engage workers for piecemeal, short-term or project-based work delivered over the internet. Millions of people also use online platforms and apps to find online work and recruit occasional help. Yet, despite it being a rapidly growing market, the relevant data is not recorded in conventional employment statistics. Now, Oxford University researchers Professor Vili Lehdonvirta and Dr Otto Kässi have constructed an Online Labour Index, which has already gathered a wealth of data on the online gig economy from sites and apps across the world between May-September 2016. It shows that employers in the United States are the biggest users of online platforms for recruiting freelance workers, representing 52% of all the vacancies posted, followed by Britain at 6.3%, India at 5.9%, and Australia at 5.7%. The Online Labour Index, which updates automatically in real time, currently only captures data from adverts posted on English-language sites – such as, PeoplePerHour and LinkedIn – although there are plans to track platforms in other languages as well. Uber and Deliveroo were not included as they also operate offline. The index shows that between May and September 2016, the number of vacancies grew by 9%, representing an annual growth rate of 25%. The growth was fastest among UK employers, who increased the amount of labour bought online over the period by nearly 14%, with a 7.5% rise elsewhere in Europe and 6% in the US. Professor Lehdonvirta comments: “These are striking figures when they are contrasted with growth rates in conventional labour markets, which remain stagnant in the UK and US according to latest national statistics. Yet, this burgeoning online economy has been largely unobserved and is missing from conventional labour market statistics.” The index is constructed by tracking all the projects/tasks posted to the five largest English-language online labour platforms, representing at least 60% of the market by traffic. The projects are then classified by occupation and employer country. The data is normalised so that 100 index points represents the daily average number of projects in May 2016. The resulting index is published as an automatically updated open data set and online visualisation. Commenting, Professor Vili Lehdonvirta, of the Oxford Internet Institute says, “Labour markets are in the midst of a dramatic transformation, where standard employment is being increasingly supplemented or replaced by temporary freelancers who are recruited online. Companies and entrepreneurs are using these platforms to find, hire, supervise, and pay workers on a project, piece-rate, or hourly basis. This ‘on-demand’ economy has deep and wide-ranging implications.”