The gig economy is a reality in Latin America, which can increase the employment rates and inclusion as long as we modernize our labour markets to prevent the risk of rising informality.

The new forms of the economy, which emerge with models such as Uber, are increasingly disconnected with typical traditional companies.

For quite a while, we have been witnessing the growth of new forms of work and money production, known as the gig economy. Some associate this economy with the collaborative economy, or freelance economy, and it has generated a vast number of jobs during the past decade.

The Word gig comes from the times when jazz musicians earned their leaving with money paid after every show. It is a frequent strategy in the artistic world, even nowadays, and it has extended into other labour areas with exponential technology growth.

Services such as Airbnb, Uber, Amazon Flex, among others, which grow vertiginously and have shaken the labour market structures of different industries.

What do these proposals share in common?

1. Connection and information: the basis is ubiquity. These services are focused in online communication, it is a “network based economy” and the applications are the mean.
2. Innovation is its engine: each of these new ideas have generated disruptive, practical business models, which are fitted to the exponential and vertiginous technological development we are living.
3. Labour flexibility: these models generate questions regarding the protection and stability of jobs. A study conducted by the company Intuit shows that currently 40% of the workforce in the United States is made up of freelancers. This generates challenges linked to social security and benefits for workers.
4. It is an exchange economy: it transforms the relation employer-employee, as well as the relation business-customer.
5. The line between work and leisure becomes blurry: there limits between working time and leisure time become less clear, and the workspace limits soften. Any place can be a workspace.
6. Untraditional payment methods: cash is disappearing as transactions tend to be virtual.
7. Borderlines break: most of these systems –except Uber- provide services on a global level. This also brings people closer.
8. It generates conflict for the economic status quo: the paradigmatic case is Uber and the impact on taxi and public transport systems in certain cities. Or hotel conglomerates, accommodation and touristic services, for the cases of Airbnb and Home away.
9. Work gets into the smartphone: many wait to be called to perform a job. Such is the case of Amazon Flex, which proposes a collaboration job in which everyone can deliver the company’s packages at any time.
10. Everyone can be everything: and for that reason it is also called the sharing economy. You can deliver a package, or carry someone, hots people and make meals, etc.

According to a survey from McKinsey Global Institute, not every gig economy worker is a freelancer. There are four types of independent workers:

1. Casual earners, who use independent work for supplemental income and do it by choice
2. Free agents, who actively choose independent work and this is their main source of income;
3. Financially strapped, who complete their work with supplementary sources by need;
4. Reluctant people, whose source of income is independent work, though they would prefer a traditional job.

This survey states that gig economy workers share three main characteristics: autonomy, payments for work done, and temporary labour.

McKinsey Global Institute also points out that digital platforms of professional services improve the quality of the services delivered to the consumer, as these are low demand services. In addition, these platforms create a transparent market, make it easier for the consumer to choose and reduce the barriers of entrance for participants from very different sectors.

The Gig Economy is nothing but the result of the digital revolution, which’s tools offer professional a new environment to consider in their labour relations. The major challenge for Latin America is to modernize our regulatory frameworks to acknowledge this reality and adapt to the concept of 21st century labour. Promoting different forms of labour and granting formality to every labour relation is key.