phone app

What is the platform economy?

The platform economy is also known as the gig economy, and it refers to people who get their work via apps or platforms. The work is usually in small pieces, or “gigs” such as food delivery, parcel delivery, car journey, property hire etc. Well-known platform economy firms include Uber, Deliveroo, Hermes, and Airbnb. The term “gig” comes from the music industry and describes jobs that only last for a short period of time, or gig.

The platform economy evolved through entrepreneurial firms striving for efficiency and offering small pieces of work to people on an “as needed” basis. Apps were then developed as an efficient mechanism of linking workers to their gigs.

Working in the platform economy

Platform economy workers do their work on demand, i.e. when the platform has gigs available for them to choose to do. However, when there is no demand, the worker does not receive work and therefore does not receive any income. Platform economy workers are not usually employees because there is no requirement for them to accept work, nor be provided with ongoing work. Platform workers are usually paid on an outputs basis, e.g. number of parcels delivered, journeys undertaken, nights accommodation provided.

For more on the platform economy, please see our gig economy page.

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