Since the gig economy emerged in the late 2010s, it has constantly been making headlines: For example, last January, when the Department of Labor and Employment in the US city of Denver summoned two companies, Instawork and Gigpro, and demanded from them one million US dollars in fines and compensation. The two platforms had placed 3,000 people in the catering and hotel industry, including (human) dishwashers, without any social security provided by the platform or the employers. The managers of the platforms argued that the people they placed were self-employed.

The gig economy, some call it the “platform economy”, became popular thanks to companies such as Airbnb (2008) and Uber (2009) and has since taken root in almost all industries. There are now hundreds of digital platforms that offer work via apps and clicks. Online platforms use algorithms to bring employees and employers together and to evaluate their performance.

Short-term jobs without commitment

The term “gig economy” is still not clearly defined and platforms often operate in a legal gray area. For Daniel Spurk, Professor of Occupational and Organizational Psychology at the University of Bern, all definitions have in common that this is a working model in which employees are not permanently employed and only enter into a short-term employment relationship. The gigs, i.e. the work, can last from a few minutes, for example during Uber trips, to several months, as in the case of specialists working on a company’s larger IT projects.

“It is also characteristic that the psychological contract between the employer and the employee is transactional and not relational,” says Spurk. So, in other words: Transactions tend to be more important than relationships in the gig economy. Unlike in traditional employment relationships, which are strengthened by further training opportunities and social security, identification with an employer is no longer necessary.

Gig economy growing worldwide

According to the World Bank, the gig economy accounted for around 12% of the global labor market in 2023. And Forbes has calculated that gigs in the US alone generate sales of over USD 1000 trillion per year, with an annual growth rate of 16%. As the dishwasher example shows, the gig economy has now reached all sectors, from IT and care to logistics and catering.

The “Fiverr” platform, for example, now connects companies and employees in 160 countries. The company with 800 employees and headquartered in Tel Aviv is listed on the stock exchange and generated sales of almost USD 300 million in 2021. The gigs range from designing business cards to complex programming. The Swiss platform “Coople”, on the other hand, is present only in Switzerland and the United Kingdom and, according to its own data, recruits 1.3 million gig workers. They do not primarily offer digital services, but work in the areas of health, events, office, retail, catering and logistics. “We are also seeing a clear trend toward more gig work in Switzerland,” says Spurk, “although the proportion is still significantly lower than in other countries such as Poland or the USA, where labor markets are less regulated.”

Negative image yet popular

Daniel Spurk worked intensively on the gig economy and gig workers in a four-year project run by the Swiss National Science Foundation together with colleagues from the business department of the Bern University of Applied Sciences. In doing so, the researchers combined approaches of occupational psychology and human resource management. The focus was on gig workers’ self-perception. “The gig economy has a rather negative connotation in the media and with the public, and there is a predominant perception that the employees are being exploited,” says Spurk. In fact, there have been many scandals in the past about low wages, lack of social benefits and unsafe working conditions, particularly in the Uber driving service.

“But the gig economy involves much more than Uber trips,” says Spurk. “It’s impossible for millions of employees to use these platforms if the experiences were entirely negative.” He therefore wanted to find out more about why employees use these platforms and how they perceive their work with regard to the future. “In Switzerland, unlike in the USA, there is – almost no data.”

Study provides data for Switzerland

The researchers worked both qualitatively and quantitatively. They conducted interviews with 85 gig workers from Switzerland aged between 20 and 65. For example, they asked about experiences on the platforms and the perceived risks and opportunities at work. In addition to the interviews, the researchers evaluated 830 electronic questionnaires on which study participants from Switzerland, Austria and Germany with an average age of 41 years rated aspects such as control, marginalization, career satisfaction and meaningfulness on scales of 1 to 5. They all worked on platforms such as Fiverr, Coople, content.de and Upwork, with around half of the respondents working on more than one platform.

Financial uncertainty as the main concern

The evaluation of the survey reveals a number of challenges faced by gig workers. In addition to the actual work, they have to do all the administration themselves and build up a personal brand that is valued by employers. Also questions of identity – “What do I stand for?” – can be challenging, as can uncertainties concerning the ability to plan and the course of your own career. “But the biggest strain for most of those surveyed was the financial uncertainty and the question of whether this working model is feasible in the longer term,” explains Spurk. Only 41% of respondents said they could determine their salary or fee for a gig themselves.

The gig workers, on the other hand, viewed their flexibility positively, in other words the fact that they can decide for themselves when and where they work. Stress, emotional strain and burnout tendencies were similar to studies with permanent employees. This also applied to the perceived professional development prospects and meaningfulness of the work. “On the other hand, it was striking that the general satisfaction with life of those surveyed was relatively high – even as a comparison to their satisfaction with their careers,” says Spurk. The reasons for this will now be investigated further. One possible explanation could be that gig workers place greater emphasis on flexibility and work-life balance than career. There was also a correlation between satisfaction with the placement platform used and personal satisfaction with life. “This raises the question of whether there can be something like a psychological contract between the gig workers and the platforms,” says Spurk.

Greater transparency in terms of monitoring

Based on the results, the research team has written advice on how the mediation platforms could support the psychological health of gig workers, for example with stress management programs to curb emotional exhaustion. After all, 23% of respondents stated that they suffer from a high level of stress, and 60% talked of a moderate level. According to the researchers, transparency in the monitoring of gig workers should also be increased. 70% of respondents stated that their work is evaluated via the platform. And 54% sometimes or often felt monitored by algorithms and monitoring technology. According to the researchers, the platforms could strengthen trust by establishing clear guidelines on what can be monitored and how the data is used.

A chance against unemployment

Despite the challenges, Spurk also sees opportunities in gig work from an occupational psychology perspective. Unemployment is much more risky. “It’s one of the biggest psychological risk factors of all.” Simple, digitally mediated access to work could also be an opportunity, says the professor. In addition, some people take advantage of the freedom of gig work to turn their hobbies into a profession, which in turn can have a positive effect on their mental state.

However, Spurk also points out that in this study, especially in the interviews, motivated gig workers are likely to be somewhat overrepresented. In addition, not all forms of platform work are represented. For example, no Uber drivers or employees in the catering and hotel industries were surveyed. It is therefore likely that the job satisfaction of the dishwashers in Denver is considerably lower than that of IT specialists in Switzerland.