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Spared by the Virus: The rise of the gig economy during the COVID-19 Pandemic

The advent of digital technology and the internet have created various industries that the world never imagined would exist decades ago. Unexpectedly, the Philippines is a hotspot for these industries. Despite connectivity issues, Filipinos are drawn to the internet. A recent report shows that Filipinos spend an average of 10:02 hours a day on the internet, putting the Philippines on top of the global list of world internet usage index. This internet addiction has led many Filipinos to venture into the earning opportunities offered through the gig economy.

The gig economy refers to new technology-enabled kinds of work – often temporary and flexible jobs that are commonplace in companies rely on independent contractors and freelancers. It is made up of three main components. First, are independent workers who are paid by a task or a project. Second, are consumers who need a specific service. Lastly, is an app-based technology platform that connects the worker to the consumer in a direct manner – like Grab or Airbnb. The companies act as the medium through which the worker is connected to – and ultimately paid by – the consumer.

The main difference between a gig and traditional work arrangements is that a gig is often temporary (with no on-going guarantee of employment), and the worker is paid only for that specific job. The gig economy challenges the traditional concept of employer-employee relationships where the latter hold positions in offices or establishments and receive a regular daily wage.

Meanwhile, the Philippine Statistical Authority defines the gig economy workers as part of the underemployed labor force or persons who express the desire to have additional hours of work in their present job, or have an additional job, or have a new job with longer working hours.

The most common form of gig job in the Philippines is freelancing, colloquially termed as “doing online jobs”. Gig jobs also include work through other companies, such as being Grab and Angkas drivers, Airbnb owners or others that engage in work arrangements that require digital platforms.

A report submitted by Payoneer in 2019 reveals that the Philippines ranked 6th in the world as the fastest-growing market for the gig economy with a 35% growth in freelance earnings.

The possibility of these numbers increasing is not a distant future, particularly considering the catastrophic effect of COVID-19 on employment. The estimates of the International Labor Organization expect that the pandemic will wipe out 7.2% of working hours, equivalent to 125 million full-time workers in Asia and the Pacific, during the second quarter of 2020. Many of these workers are in low-paid, low-skilled jobs, where a sudden loss of income is devastating.

In the Philippines, many workers are already experiencing reduction and loss of income. The imposition of Enhanced Community Quarantine nationwide closed down major establishments and offices except those providing basic essential services. As a result, many traditional workers are precluded from reporting to work and consequently not receiving an income under the “no work, no pay” scheme. These workers solely rely on relief and subsidies from the Philippine government. To augment their loss of income, these workers may be left with no other option but to consider the only industry spared by the virus – the Gig Economy.

While many traditional workers are not receiving income and are about to lose their jobs, the job opportunities in the gig economy, on the other hand, are increasing. Delivery drivers for online platforms such as Grab Food, Food Panda, and Honestbee, among others, have seen demand skyrocket as consumers quarantine themselves from the comfort of their homes and opt to purchase their food and supplies through delivery services rather than venturing to physical stores.

On the one hand, some companies are searching for ways to meet project deadlines in the face of the pandemic and may be searching for extra help in the form of freelancers to get those deliverables completed. This may be a viable option for workers who are tremendously affected by COVID-19, but the gig economy is not without drawbacks. The gig economy may have protected workers from the virus but it also removes them from the protection of the Labor Code.

P.D. No. 442 or the Labor Code of the Philippines does not apply to engagements where no employer-employee relationship exists, as in the case of gig economy workers; neither is there any law in the Philippines that tackles the gig economy. This implies that no labor protection for breaches in contract, non-payment of dues, or disputes with the consumer or client currently exists. Undertaking this work will also not entitle gig workers to healthcare benefits, 13th month pay, retirement pay, leave credits, day-offs and other forms of basic labor rights found in the Labor Code. The continuous absence of a statute defining their rights may expose gig workers to abuses. As of now, their rights are subject to the whims and benevolence of their clients.

As the world grapples with the economic repercussions of the pandemic, the government of the Philippines needs to come up with solutions to address the loss of employment on its own shores. One of the answers may be found in these readily available non-traditional working arrangements. This alternative, however, needs to be examined and regulated before it is considered as a catch-all solution.

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