With the growth of sharing and collaborative economy platforms, definitions of ‘employee’, ‘employer’ and ‘work’ are changing fast. As governments adjust to the rapid transformation of labour markets, this report by the European Commission’s Joint Research Centre develops new definitions, provides insight on sharing economy workers, and assess the economic and social effects of these changes.

Globally, the study estimates that just 39 platforms (part of the broader ‘digital labour market’) employ 52.6 million registered contractors. In countries such as the UK and US, those working in the digital labour market make up about 1% or 2% of the labour force, but their share is set to grow quickly. These individuals tend to be younger and well-educated, and are also likely to work for more than one platform, and in some cases as many five.

Overall however, the study finds evidence of precarity, job-matching friction, and discrimination in digital labour markets. As a result, the authors call for policy makers to acknowledge that work in the 21st century is no longer a “binary phenomenon” (i.e. employed vs unemployed) and to put in place fair conditions that both protect workers and limit constraints on innovative companies. The report concludes with a research agenda to support European level policy-making.

Study highlights and key findings:

  • Classifies the digital labour market into two types: Online Labour Markets, which are more global, mostly based on micro tasking, and usually peer-to-business (i.e. Mechanical Turk); and Mobile Labour Markets, which are more localised and mostly peer-to-peer (i.e. Uber).
  • Shows that individuals engage in digital labour markets primarily for money. For a large segment, this work is their primary source of income, and most are under-employed and self-employed, while fewer are unemployed and inactive.
  • Finds that earnings range from very low to modest, with only a small minority of workers making above middle level incomes. Furthermore, little correlation is found between skills and earning levels. Reputational ratings and references provide greater explanation for the number of jobs or amount of money secured by contractors.
  • Finds that workers have little social protection or control over personal information, and that gender and ethnicity-based discrimination are “not uncommon.”