The findings of two new studies to be presented this week show how divided opinion is on zero hours contracts and the gig economy.
A survey of ‘alternative work arrangements’ in the UK reveals a stark dichotomy between workers on zero hours contracts (ZHCs) who are content with their flexible working arrangements and those wanting greater security.
Another study of Uber drivers in London finds the average driver reports higher levels of life satisfaction than other workers in the UK’s capital – but in common with many other self-employed people, a minority also report much higher levels of anxiety.
Both studies will be presented to the 68th Economic Policy Panel Meeting, hosted by the Oesterreichische Nationalbank in Vienna on 4-5 October.
The ZHCs research by Nikhil Datta, Giulia Giupponi and Stephen Machin finds that almost 30% of the 20,000 surveyed workers are on ZHCs specifically for the flexibility offered – and around half of them are satisfied with their ZHC jobs. However, around 45% of ZHC workers want both a more regular work pattern and more hours – and almost 30% of workers are on ZHCs as they have no other option available.
The study also found that the introduction of the national living wage (NLW) has resulted in an increase in the use of ZHCs in the domiciliary care sector, where piecemeal contracts were already very common. This may have occurred in other low pay sectors, such as hospitality and cleaning and maintenance.
The UK government has made a commitment to achieve an NLW of 60% of the median wage by 2020. At the same time, concerns about insecure working arrangements have been raised, notably by the Taylor Review. The researchers say that, given the interaction between the two, trade-offs may surface unless legislation to regulate ZHCs is introduced, although they add that such regulation must consider the nuances of attitudes among workers on ZHCs.
The Uber study by new research by Thor Berger, Carl Benedikt Frey, Guy Levin and Santos Rao Danda draws on anonymised administrative data collected through the Uber app and a new independent survey of UberX and UberPOOL drivers. It finds that the vast majority of drivers emphasise the role of flexibility that the Uber platform offers. In particular, they note the importance of gaining control over their working hours in shaping their decision to start driving.
These drivers, who value a flexible working arrangement, report higher levels of life satisfaction, as well as lower levels of anxiety. In contrast, the minority of Uber drivers who would prefer to work fixed hours in a more conventional work arrangement exhibit lower levels of life satisfaction and higher levels of anxiety.
The researchers also find that London’s Uber drivers come from economically disadvantaged backgrounds: about three quarters of drivers report a lower total weekly pay than the median London worker. The typical Uber driver spends about 30 hours logged into the app per week and earns about £11 per hour. However, more than a third of drivers adjust their working hours by over 50% on a week-to-week basis.