Motivating Factors in the South African Gig-Economy
‘Gig economy’ also called the ‘sharing’ economy, ‘open talent’ economy, ‘freelance’ economy and the ‘on demand’ economy, involves a temporary contractual job or short-term contract or freelance work that a person may take, on a project-to-project basis, for which the payment is made once the task is completed.
But what are the motivating factors for people engaged in the gig-economy? We went ahead and analyzed how employee benefits, working conditions, and compensation affect the decision-making processes of two major players in the gig economy: the worker and the technology platform.
We chose South Africa as a case study because it’s one of the economies with the most to gain from a strong gig economy. Why?
- First, the youth unemployment rate in South Africa is 52.85%, the country’s unemployment rate is 29%, and the informal sector currently only comprises 16.7% of employment.
- Secondly, the traditional labor market in South Africa is particularly inflexible due to strict labor laws regarding hiring, dismissal, compensation, and working conditions.
So what did we do?
We used data, literature reviews, and academic papers to analyze the positive and negative attributes of gig work globally, the South African legislative and regulatory environment pertaining to the gig economy, and the motivations of gig platforms.
After preliminary research and interviews, we distributed a survey that gathered 174 Responses out of which 82 from people currently participating in the Gig Economy in South Africa.
So what did we find?
Income: income is in the top 2 benefits for ~81% of respondents, notwithstanding the fact that the respondents are fairly evenly distributed regarding their satisfaction of their current income from gig work. A further question is whether this is indicative of the fact that the respondents that are dissatisfied/neutral with their current income levels, engage in gig work as little/no alternative options are available in traditional employment.
Flexible working hours: this is ranked highly by respondents (mostly between 2 and 3) and ~82% are satisfied with this attribute of their gig work.
Independence: this is the third ranked attribute by respondents, with over 80% of respondents being satisfied with this attribute of their work.
Potential to develop skillset: this factor is less important than the other options but has a high level of satisfaction from respondents.
Less risk of job/income loss: this is ranked lowest by respondents and has somewhat inconclusive satisfaction ratings.
Moreover, much of the secondary research pointed to the fact that gig workers universally face potentially worse working conditions than their traditionally-employed counterparts, there has been a decline in the South African worker’s power in the labor market partly due to the weakness of direct state intervention, and thus collective action/organization by gig workers may be the best (or only) recourse for gig working conditions to improve.
Research conducted by Cristina Pogorevici and Thulo Serobe. For any questions, feedback or recommendations please contact us at cpogo@wharton.upenn.edu and thulo@wharton.upenn.edu.
About the Authors
Cristina and Thulo were recipients of the Social Impact Research Experience grant in 2020 offered by the Wharton School of the University of Pennsylvania. Thulo was born and raised in South Africa where he worked at a tech startup (EmptyTrips) that was one of the forerunners of the gig economy in the country before coming to Wharton. Cristina had been awarded the Social Impact Research Experience grant in 2019; she then analyzed the challenges and provided recommendations on improving the entrepreneurial ecosystem of the Republic of Moldova.Together, they decided to focus on delivering an impactful paper on the topic of youth involvement in the gig economy in South Africa.
