On-demand refers to systems whereby services are made available immediately to the user on an as-needed basis.
We are now used to ordering food, booking a taxi and shopping online and having our purchases delivered to our door via smartphone app. This is on-demand O2O (Online to Offline) services.
The emergence of the on-demand service market has given rise to a new breed of workers. A case in point is Uber taxi drivers. The Financial Times reported that “Digital platforms like Upwork, which act as marketplaces matching freelancers with work, are bringing new opportunities to many people who were once on the fringes of the global workforce.”
However, the type of work the on-demand era demands seems to displace, not replace, traditional regular jobs that have come with secure pay and benefits. Demand fluctuates, so it is more profitable for profit-driven companies to break jobs into piecemeal tasks and pay workers for the time they actually worked rather than retaining full-time workers on their payroll. As a result, companies will avoid taking on regular workers; on-demand service providers are undermining job security under the spurious pretense of the so-called ‘sharing economy.’
On-demand services promote the use of irregular workers and the rapid rise of the gig economy.
In the US, the leader in on-demand talent marketplaces, the “gig” economy -- an environment in which temporary positions are common and businesses use self-employed contract workers for short-term engagements -- is very much salient. Gig work, in its earliest usage, referred to jazz club musicians who worked from gig to gig in the 1920s. Later, irregular work in the IT industry was called a gig. Now, gig work is thought to hold the key to transforming the labor market in this era of on-demand services.
As a matter of fact, Uber taxi drivers and Airbnb hosts are working as independent contractors, not as regular workers.
The up and downside of on-demand workers managed by algorithms
Tim O'Reilly, the founder of O'Reilly Media, talked about algorithms used to schedule on-demand workers in his essay titled ‘Workers in a World of Continuous Partial Employment.’ Some call them gig economy workers.
Professor Jeong Ji-hoon at Kyung Hee Cyber University wrote an article titled ‘The rise of on-demand services and new changes in the labor market,’ in which he said: “Most on-demand workers are highly likely to work as independent contractors. The spread of on-demand services will spell the demise of the current system of three eight-hour shifts. On-demand workers can have holidays and vacation as they wish and close their business temporally if something urgent arises. However, they will enjoy little job security.”
The problem is that if the number of on-demand works such as temporary works and short-term contractors, increases in the gig economy, unemployment rates could be taken down on the surface. However, ultimately, it is highly likely to result in a deterioration in the quality of employment and a deceleration in wage increases.
Presumptive Democratic presidential nominee Hillary Clinton also expressed her skepticism over the gig economy. She said, “This on demand or so-called gig economy is creating exciting opportunities and unleashing innovation, but it’s also raising hard questions about workplace protection and what a good job will look like in the future.”
