A guide to the gig economy

File photo of an Uber car. Photo: Laura Dale/PA Wire

File photo of an Uber car. Photo: Laura Dale/PA Wire - Credit: PA

The high profile of companies like Deliveroo and Uber has thrust the so-called gig economy into the spotlight.

What is the 'gig economy'?

People who work in the gig economy has small jobs instead of – or as well as – full time jobs.

Instead of a salary, they are paid for each job they do (like a food delivery or a taxi ride).

It is estimated that 5m people in the UK are employed as independent workers on this kind of basis.

These jobs can range from couriers and taxi drivers to video producers and software designers.

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How is this different to zero-hours contracts?

Like gig economy workers, those on zero-hours contracts have no guaranteed hours or much job security from their employer.

However, they are considered as employees so are entitled to holiday pay, but not sick pay.

Zero-hours contracts are controversially used by companies like Sports Direct and JD Wetherspoon.

Benefits of the gig economy

Many people like the flexible hours and control over how much they work. It is also rumoured to make employees more productive.

It can also work well for employers as its enables them to pay only when the work is available, avoiding unnecessary staff costs when demand is low.

Downsides of the gig economy

As they are classed as self-employed, people in the gig economy have little employment protection.

They are not entitled to holiday pay, sick pay or redundancy payments, have no protection from unfair dismissal, and have no right to receive the national minimum wage.