The Gig Economy: a Model May 2022 Authors Camilla de Coverly VealePolicy Director Frances LasokHead of Talent & SkillsThe Coalition for a Digital Economy (Coadec) Dom HallasExecutive Director About Coadec The Coalition for a Digital Economy (Coadec) is an independent advocacy group thatserves as the policy voice for Britain’s technology-led startups and scaleups. Coadec was founded in 2010 by Mike Butcher, Editor-at-Large of technology newspublisher TechCrunch, and Jeff Lynn, Executive Chairman and Co-Founder of online Coadec works across a broad range of policy areas that matter the most to startups and scaleups: Accessto Talent, Access to Finance & Technology Regulation. We represent the startup community on the Gig Economy: a Model for Work in the 21st Century | May 2022 Introduction The gig economy is a business model that allows customers who require very short term services to be pairedwith individuals who provide these services via an intermediary. For instance, you may need a haircut. A The gig economy has existed for decades on the high street: in hairdressers, station minicab offices, gymsand beyond. It has allowed people to work and earnflexibly around their commitments. Through startupinnovation this model has exploded over multiple industries and sectors. Online platforms are now disruptingtraditional models that have typically favoured the employer. From riders, to drivers, to hairdressers, The gig economy has become an important part of the UK’s wider economy. In 2018, the Governmentassessed that roughly 2.8 million people had worked in the gig economy in the last 12 months.¹ As the labourmarket has shifted and demand for services has grown during the pandemic it is likely that this number will As the gig economy has grown, so too has interest in it and scrutiny of it. We know that our current systemof work and employment is outdated and is notfit for the 21st century. Innovation is butting up against Startups, innovative businesses and individuals that earn in the gig economy struggle with a regulatoryframework that hinders growth and consequently, investment. We believe that now is the time for the UKto look again at regulation and legislation around work and employment to reflect the needs of a modernising This Coadec report highlights the challenges caused by the uncertainty which impacts our current system,and offers recommendations to Government for ensuring that regulations around work and employmentarefit for the 21st century. These recommendations have the potential to maximise the economic benefit How Work Works The legal model for work and employment in the UK is complicated. Our rules are built on a long history ofstatutory definitions and case law. Through this, the UK has settled on a system with three categories:self-employed, worker (also known as ‘limb (b) worker’ or ‘dependent contractor’, these are individuals who These categories offer a tradeoff betweenflexibility for an individual and regular obligations for an employer: ●Self-employed peopleare independent. They are able to decide what work to do, usually provide theirown tools and equipment, and are free to work on multiple jobs and for multiple clients. This means that ●Workersare a hybrid category, with a basis in European law, between an employee and somebody whois self-employed. They provide work under some form of contractual arrangement but do not carry outthe work as part of a business or profession and cannot subcontract to other people. They must be paid ●Employeeshave greater obligations towards their employers. They usually have to work regular hourson tasks set by their employers. In exchange, employers must provide regular hours and they provide Taken together, the UK has created a system which is relatively unique around the world for providing athird category, which provides both protections andflexibility to those who are designated as a ‘worker’. However, how people are categorised - and the rights or obligations that follow -is a complicated andcontentious area as there is currently nouniform process (other than through employment tribunal) todetermine where a person falls between self-employed, worker or employee. Nor has the notion of workstatus remained static. Worker status in particular has evolved over time, especially during the UK’s Good Work: the Taylor review of modern working practices, an independent report commissioned by theDepartment for Business, Energy and Industrial Strategy, concluded as much. The report highlighted thecomplexities and unique nature of the gig economy, which challenges existing employment legislation andcase law. One of the report’s conclusions was the need to clarify the situation by providing a framework that Gig Economy: a Model for Work in the 21st Century | May 2022 The UK’s regulatory framework for employment and work is complex and hard to navigate for people andfor businesses but it is notable that despite the significant growth i