Operational Mechanisms and Challenges of the Gig Economy on Upwork
Abstract
This study explores the operational mechanisms and dual impacts of the gig economy on the labor market through a case study of the Upwork platform. The gig economy offers unprecedented flexibility and global opportunities, particularly evident in professional fields such as software development, design, writing, and translation. However, this economic model also brings employment instability and high competitive pressure, especially for newcomers who may struggle to find suitable work due to platform algorithm biases, leading to talent loss and jeopardizing platform sustainability. Moreover, the subjective evaluation of work quality and inadequate dispute resolution mechanisms often lead to conflicts between users and workers. Despite data from the United States Bureau of Labor Statistics in 2017 showing that 34% of American workers participated in the gig economy, indicating its positive contribution to society, platforms and regulators need to further refine evaluation and compensation mechanisms to ensure fairness and efficiency. This paper suggests that by optimizing algorithms and assessment systems, and in conjunction with protective government policies, the fairness and sustainability of the gig economy can be effectively enhanced, creating positive outcomes for all participants.
References
- Manyika, J. et al.: Independent work: choice, necessity, and the gig economy. McKinsey Global Institute, San Francisco, 2016,
- Burke, A&Cowling, M.The Use and Value of Freelancers: The Perspective of Managers. International Review of Enterpreneurship, 13(1), 2015.
- Twago.10 Advantages of Hiring Freelancers over Full Time Employees. https://www.twago.com/blog/advantages-hiring-freelancers/, 2015.
- Jarrahi, M. H., Sutherland, W., Nelson, S.B., & Sawyer, S. Platformic management, boundary resources for gig work, and worker autonomy. Computer supported cooperative work (CSCW), 29(1), 153-189., 2020.
- Corporaal, G. F., & Lehdonvirta, V. Platform sourcing: How Fortune 500 firms are adopting online freelancing platforms. Oxford Internet Institute: Oxford. https://www.oii.ox_ac.uk/publications/platform-sourcing.pdf, 2017
- I. HUĐEK, K. ŠIREC: The terminology and the concept of the gig economy EKONOMSKI PREGLED, 74 (1) 34-58, 2023.
- Benson, A., Sojourner, A., & Umyarov, A. Can reputation discipline the gig economy? Experimental evidence from an online labor market, Management Science, 66(5), 1802-1825, 2020.
- Turkopticon. https://turkopticon.ucsd.edu/. Accessed 19 November 2023.
- Hauben (ed.), H., Lenaerts, K. and Waeyaert, W. (2020). The platform economy and precarious work, Publication for the committee on Employment and Social Affairs, Policy Department for Economic, Scientific and Quality of Life Policies, European Parliament, Luxembourg
- World Economic Forum (2016). Hosting the world’s largest on demand freelance talent marketplace for companies to source talent. http://reports.weforum.org/digital-transformation/upwork/. Accessed 19 November 2023.
- Spreitzer, Gretchen M.; Lindsey Cameron; and Lyndon Garrett (2017). Alternative Work Arrangements: Two Images of the New World of Work. Annual Review of Organizational Psychology and Organizational Behavior, vol. 4, no. 1, pp. 473–499.
- Upwork. (2023). Upwork | Hire Freelancers. Make things happen. Upwork. https://www.upwork.com/
- Blyth, D. L., Jarrahi, M. H., Lutz, C., & Newlands, G. (2022). Self-branding strategies of online freelancers on Upwork. New Media & Society, 0(0). https://doi.org/10.1177/14614448221108960
- Upwork Community (2016). Addressing accounts that don’t show work activity.https://community.upwork.com/t5/Announcements/Addressing-accounts-that-don-t-show-work-activity/td-p/274042. Accessed 19 November 2023.
- International Labour Organization (2019). Helping the gig economy work better for gig workers. https://www.ilo.org/washington/WCMS_642303/lang--en/index.html
- Burtch, G., Carnahan, S., & Greenwood, B. N. (2018). Can you gig it? An empirical examination of the gig economy and entrepreneurial activity. Management Science, 65(5), 2182-2202.