The gig economy offers workers flexibility – but inadequate labour protections. Blockchain may be the solution.
The gig economy has shifted the way people commute, order food, run businesses and make a living. But the platforms that make gig work possible face accusations of exploiting workers, raising housing prices and fostering unsafe working environments. Secure, automated blockchain may be the key to fairer gig contracts.
Crowdwork involves taking a job traditionally performed by an employee and outsourcing it to an undefined, generally large group of people in the form of an open call. Crowdworkers are in transport (e.g. Uber driving), design work, translation, coding and many other areas. Up to 16 percent of the US population has at one point earned money through crowdwork.
At the heart of the problem are contracts and work practices. In most cases, crowdworkers are treated as independent contractors, not employees. This means they cannot access labour protections such as maternity leave, sick leave, anti-discrimination policies and occupational health protection. Benefits such as superannuation are also not provided. Since crowdwork is associated with low rates of pay, it helps create a new class of “precariat”: people whose income is irregular and not guaranteed beyond the next gig or crowdsourced job. Like gig work generally, crowdwork has attracted accusations of unethical employment practices.
The challenge of managing a very large number of small contracts may be one of the reasons organisations using crowdworkers are reluctant to provide protections and benefits.
Crowdwork arrangements are frequently out of step with traditional employment arrangements. Contracts can lack clarity, including about how variations can be made. Prompt payment and open lines of communication with management are not guaranteed.
Many crowdwork platforms, such as Amazon’s Mechanical Turk, offer traditional employment arrangements to some degree. But Mechanical Turk has been widely criticised for low pay and systems that advantage task requesters over workers.
New technology can assist with the challenges of managing these new forms of labour. Distributed ledger (blockchain) technology offers a fully distributed database of transactions, consisting of chains of timestamped and cryptographically verified blocks of data. It is a highly secure mechanism for carrying out transactions of many types. The best known are cryptocurrency transactions such as bitcoin, but blockchain solutions are also being used for transactions as diverse as land records and the provenance of artworks.
Transparency is a feature of distributed ledgers. Every transaction (if blockchain were used to track crowdwork, a transaction would be a completed job) is searchable and uniquely identified, but cryptographic identifiers are used, so individual privacy is protected.
Each distributed ledger also has a ‘distributed database’: every node on the blockchain has a record of every transaction. This provides network integrity, as a failure of one node will not affect the whole network. And as every transaction is irreversible (added to the block and cryptographically linked to all other transactions), distributed ledgers come with built-in trust in all financial records without requiring an intermediary such as a bank.
This all enables the creation of ‘smart contracts’. Since the blockchain is fully digital, transactions created on the chain can be triggered by automated rules and algorithms. A rapidly developing area is cross-chain protocols, so that information can be passed from one chain to another – for example, an entry on a land record chain could be created when cross-chain protocols looking at a payment chain have verified that an appropriate payment had been made.
There are some disadvantages to blockchain. Since every transaction is recorded on every node, distributed ledgers consume large amounts of energy. They can also be slow, inefficient and difficult to scale up. Even so, the distributed, confidential, trusted and automated nature of blockchains could offer solutions to the challenges of managing crowdworkers. Automating labour hire enables the increasing use of crowdwork platforms: rather than committing to hiring an employee, organisations can flexibly source labour.
Blockchain technology can be used to record task requirements, track task completion and evaluation, manage payments, retain records of communications, and retain worker and reputation records. Cross-chain protocols allow these records to be verified or exchanged. This offers the potential for gig workers to develop a trusted CV of work records and credentials that can be verified.
Importantly, it offers the opportunity to improve availability of labour benefits for gig workers, as these records could also be created upon completion of a job. One chain could keep a record of the jobs a worker has completed on a particular crowdwork platform, and using cross-chain protocols this information could be passed to another chain that, for example, calculated and accumulated entitlements for sick leave and superannuation.
Although this is technically possible, the funding of these entitlements becomes a political issue. Should the costs be included in the charges for using a crowdwork platform to source workers? Should they be met by the government through taxation? These questions are likely to pose as many puzzles as the technical solutions themselves.
Digital technologies such as blockchain can offer a way forward for better, more secure, trusted, verifiable and transferable work records in an increasingly casualised crowdwork environment. They can automate some of the processes involved in managing workplace protections and benefits, making these easier to offer to crowdworkers.
As well as being technical, these solutions are political. New technologies can enable new work forms that accord with social goals for the fair and ethical management of work.
Mary Tate is an Associate Professor in Information Systems at Victoria University of Wellington, New Zealand. She specialises in digital services involving new technologies.
Associate Professor Tate declared no conflict of interest in relation to this article.