Ep 124: Gig Work is AWESOME!

**Amit Varma** (0:00)
Welcome, you're listening to the audio version of Everything is Everything. This show is a video show, there are sometimes visuals that help you appreciate the content better, but mostly the audio should be enough. Please, please, please do subscribe to us on YouTube also.
Gentle readers, welcome to Everything is Everything. I'm Amit, this is my good friend Ajay, and I want to tell you the origin story of the show. One day, I was sitting on my own, sipping a bourbon, when I thought that I should start a YouTube show, but it would need a co-host. So I created an app to find a co-host. It would be a gig work, every week, there would be a different co-host. The app was called Bourbon Company, and I sent the link out, I put the word on social media, and the very first week, I got only Ajay Shah. So I thought, okay, let's try it out. Yeah, fine, an old man, maybe pretty women will apply, maybe Bengali economists will apply. And the second week, it was only Ajay Shah, and the third week, it was only Ajay Shah. So the gig economy is a strange and curious thing. What should have been a one-night stand became an affair, and now I think you're married. What whom? Would you like to respond to my magnificent Salali Koi?

**Ajay Shah** (1:21)
Hilarity answered.

**Amit Varma** (1:31)
So today, General Reader, we're going to talk about gig work. Ajay, begin.

**Ajay Shah** (1:37)
Gig work is a two-sided market where buyers of labour and sellers of labour agree to perform tasks or activities in a granular fashion without complexity of contracting. This is a fancy economist's way of saying that when an employer wants a job done, they put it up into an electronic system. And when a person wants work, they go into an electronic system and they get that work. So that is gig work. Now, we're going to do an entire episode on this because it's an important phenomenon. It's a deeply important development in the concept of a firm and for India. Because I don't care about other countries, it may or may not be so important for other countries. For India, it's a deeply important development, and we're going to argue that this is really big. We're also going to show a laundry list of difficulties and criticisms that many people have about the nature of these business arrangements. There is a whole list of criticisms that have crept up. It is important to recognize those criticisms, take them on board, and try to argue about them, and respond to them in good faith. Okay. Gigawork can be classified into three kinds of activities. Category one are capital-intensive jobs. The best example is the driver owns a car. Okay. So, the car used to be on the balance sheet of some company, a transportation company. Now, the car sits on the balance sheet of the driver, like traditional taxi rides in Bombay, where the taxi driver owned the car. So, it's a capital-intensive work. Imagine a photographer who owns all the photo equipment. It's a capital-intensive activity that lakhs of rupees of equipment is owned by the photographer, and that person takes it to do one gig at a time. The second category are knowledge-intensive activities, labour-intensive activities, where the supplier of the gig work possesses certain unique knowledge, such as cutting your hair, and they come to your home and they do the work. So, it's a labour supply, it's a skill supply, it is a knowledge activity. The third category is called microtasking. This is a whole new world where the firms are able to put up a microtask, like reading a photograph and making a label, a textual label for a photograph, or taking three numbers and identifying which of them is the biggest. Think of very, very tiny tasks. These tasks are being sent by corporations to workers all over the world through electronic platforms. Okay, so that's a three-part classification. Capital intensive, labor stroke skill intensive, microtasks. This is a description of the gig economy. Let's talk through a couple of examples so that we get a fix of this. General Reader, Doubtless, you know many others, but we'll just talk through a few. Consider Uber. The driver owns the car. The driver could be you and me. Okay, we could occasionally run a car for an evening, do a few rides, get paid for it. Okay, so it's fully flexible labor supply. Airbnb, you own a house, capital intensive, and you could choose to rent out a room. You could choose to rent out the house. It's fully flexible. When you don't feel like renting it out, you stop. Okay, so it's a fully flexible way to get some work done. And typically, as all of us know, the owner and the operator of the Airbnb puts in significant services in the backend to approximate something like a hotel, where there'd be a cleaning service, and they wash your dishes, they do many small things to make the life of the Airbnb guest better. Then we know the delivery services story in India, where there are firms like Zepto and Swiggy, and Sommeto and so on. And they are all using a fleet of gig workers who pick up a task, one task at a time. So in their electronic system, somebody says, I need you to go to so and so restaurant, take that glorious Hyderabadi chicken biryani and deliver it to Amit Varma. And somebody says, I got it, that's mine. And then that person goes through all the steps and gets paid a fee for that. Sometimes, it would be a flat fee for the delivery plus some two rupees per kilometer. So to reflect the use of fuel and the use of the two-wheeler that is owned by the worker. So it's a little bit of capital supply.