The gig phenomenon – from the Silicon Valley to Europe

In October 2015, Alok Alström stepped in as head of Uber's Sweden office. It took only a few days before he was struck by an insight – that the then relatively newly hatched phenomenon of the gig economy had the potential to actually change the labor market fundamentally.

"I realized that there was a need for a place for gig workers to find, compare and even be able to rate and rate different gig platforms. At the time, most people knew what Uber was but not what other players there were. For me, it was clear that the gig economy would grow and become bigger. It was just a matter of indexing the gig economy so that people could orient themselves in it."

The solution was to create AppJobs, which almost three years later helps those looking for work to find jobs with companies such as Uber, Foodora, Taskrabbit, DogVacay and Meal Sharing. AppJobs has 1.4 million members, of which 40 percent live in the United States, a third in Europe and the rest in other parts of the world.

"The gig phenomenon started with American companies such as Uber and Airbnb in Silicon Valley, and that is probably one reason why it is still the largest in the US. Another reason is that the phenomenon is culturally very close to American and Anglo-Saxon core values such as freedom; that you like to move around and change workplaces," says Alok.

The platforms that blur the boundaries

In Europe, the gig economy is the largest in England. Then follows continental Europe, Sweden and Eastern Europe.

– The phenomenon works best in large cities, and we have no really large cities in Sweden. On the other hand, we have an entrepreneurial vein with many startups such as Tiptapp, WhosApp and TechBuddy.

Is it age-related, are there more young people applying for the gig?

– You can believe it, but it is not. In Sweden, it is most common among people in middle age or in younger middle age. And it's often about men with a foreign background.

How does the gig economy increase the tendency of companies to find skills abroad?

– The gig economy is based on digital tools and processes that increase the productivity of the system. This tends to mean that the services that you buy from the gig platforms can easily also be bought from those who are in other countries. This means that Swedish companies also get joy and access to the gig economy, even if the gig worker himself is not in Sweden.

Algorithms vs. bosses?

In previous interviews, Alok Alström has touched on a train of thought which means that most things like a traditional HR department can be done with an app. The question is whether it is that simple?

– No, not yet, but it is definitely heading in that direction. What happens with the gig economy is that the components of the traditional job are broken up into different parts. Some, says Alok, are the ones who will do the work - the gig workers who in this case can be compared to traditional employees in a regular company.

– Another aspect is who is to decide what to do, the manager in the traditional company or the algorithm or alternatively the app itself in the gig company. Then there is the entire HR department, which keeps track of pensions, insurance, contracts, taxes and work tools. According to Alok, the gig economy as a phenomenon has not matured enough for everyone parts should end up in the same place.

– With our service, we try to collect everything in a clear and manageable way, he explains. Alok likes to draw parallels between the way we consume work with, for example, Spotify and Netflix.

– What was cool about Spotify and Netflix at their launches was that you could consume on demand in a way that did not exist before. You did not have to go to a video store or music store - an intermediary. Now we are starting to get to a point in the labor market where friction in working is all the lower.

How do you mean? – Today we can consume jobs or stream jobs on demand in much the same way as we consume Spotify and Netflix.

Will this work for all kinds of jobs?

– With some types of jobs, it will take a long time before they get a gig base, but basically this change is driven by declining transaction costs or lower friction, and it is something that happens in general. In some industries, such as the taxi industry, reducing friction provides greater immediate benefits. In ordinary cases, people think that this works for less qualified professions, but now also qualified professions, especially licensed professions, are starting to gain ground - such as nurses, doctors and the like.

Security = freedom?

In the labor market of the future, security will be less about feeling secure in the same professional role, but more about security that you find a new gig, says Alok.

– If there is only one employer, the security is to stay at that company. If there are several employers and it is easy to change, it does not matter if you are not comfortable with the platform you work on, then you can change to one of the others. It will characterize security in the labor market - to have a job, not to have the same job.

Alok points out that the reasoning can certainly provoke; that many today feel that the gig economy does not give any sense of freedom at all now and that they are quite locked up.

– But that is because we are quite early in the gig phenomenon. There are not many platforms to choose from and those that have been started up still struggle with certain challenges that young companies usually do.

Footnote: Given that the gig economy is so young, and few know how gig work actually works, AppJobs has started the AppJobs Institute. The institute has the task of analyzing and sharing insights about the labor market, with special focus on the gig economy.