What We Can Learn From Gig Economy Companies

By Jamie McSloy / January 7, 2018
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What We Can Learn From Gig Economy Companies

Most gig economy companies and other tech giants work because of three principles. And don’t give me any arguments about it being about innovation, growth hacking or buzz-term guru nonsense.

Here’s what they are:

Decentralised Labour, Decentralised Taxes and Centralised Power.

We can learn lessons from all three of those principles. These ring true whether you’re a freelancer, an employee or a budding business emperor.

Let’s look into them.

Decentralised Labour

Let’s assume you’re a freelance writer who wants to scale their business.

The last thing you should do is take on employees on a full-time, pay-their-pension basis.

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If Uber can’t afford to do it, then neither can you.

Understand this before you crucify me along with all the evil capitalist pigs though: The workplace is shifting so that this is the norm.

Far be it from me to predict the future, but it’s unlikely that people are ever going to get the final salary, golden-age pension that their grandparents got ever again.

And far be it from me to put out another prediction, but it’s unlikely people are going to get their career positions at twenty and keep that same job for life.

What does this tell you about the world and the economy?

You have to prepare for this reality.

You are the decentralised labour if you’re a freelancer, and if you’re an employee, that’s your likely future.

It’s best I don’t get started on the robot revolution.

So how do gig economy companies deal with this?

They pool their service providers.

You need to pool your money-making opportunities. Whether that’s operating on multiple freelance platforms, building your own client list, buying multiple income-generating assets or something else… it’s your opportunity and responsibility.

If you want a retirement or a house to live in in thirty years, then you’re going to have to get the resources to achieve that. Your employer won’t and your government… well let’s talk about that next.

Decentralised Tax

I possibly upset the capitalists above, and now I’m going to go after the socialists too.

What can we learn about business from gig economy companies when it comes to their tax situation?

Well, firstly, they don’t pay tax.

This is part of a dubiously ethical strategy of minimising their costs of operating.

It also takes advantage of a global marketplace, which they use to shop around for tax jurisdictions.

It’s also, despite public protestations to the contrary, something that the political system deals with or otherwise promotes.

(Amazon, who have never drawn a profit and otherwise avoid as much tax as possible, got rewarded with becoming the biggest supplier of the US government this year. It’s not in the government’s interest to raise their own prices and they love having access to your data.)

What can we learn from this?

Firstly, you live in a global business marketplace now. You should treat your business accordingly.

This can be as simple as going on a freelance platform to work with people from different countries or selling a book on all the Amazon stores or whatever. It can be as complex as keeping different currencies in different accounts, starting offshore companies or the whole wealth protection treasure chest. It doesn’t have to be (and keep it legal, folks.)

Secondly, prepare for public services you know and love to become compromised. Also, prepare for there to be a clampdown on any of the activities I listed in the above paragraph. On one hand, we’re an interconnected global community and so it’s harder to get away with paying any tax, and on the other, massive corporations can afford not to pay tax.

This means you’ve got to take destiny into your own hands and prepare for as many eventualities as you can.

Centralised Power

Here’s the thing when you work with tech giants.

It doesn’t matter if you’re driving for Uber, selling books on Amazon or writing on Upwork.

All of those companies do one thing: They centralise the power.

In most cases, the power is the data. It’s the customer list, the analytics and the “behind the scenes” stuff that you could use to make your business more powerful.

Of course, you can’t do this because you don’t have access.

Let’s say you write a book and sell it on your website. If you have a brain the size of at least a small primate, then you can work out how to install an analytics plugin and get a better idea of who is looking at your site and who is buying your book.

Let’s say it turns out that the people viewing your website are women in their forties and the ones buying your book are women in their forties who are married.

With that information, you can say, “I’ll target just married women in their forties” and you’d make a ton more money from that decision because you’re cutting out the non-buyers from the buyers.

You can’t do that when you sell a book on Amazon.

You have no idea who is looking at your book, who is buying your book or what percentage of people looking actually buy. This means you can’t optimise.

…It’s All In The List

Alright, alright… we know they’re the bad guys.

Here’s the point though: These tech giants are basically building entire oligarchies based on their list and their analytics.

What is Uber?

They don’t provide the drivers. They don’t provide the customers. Nor do they do any of the vehicle tech – I don’t even think they provide the maps for their driver’s GPS devices.

And if you think they’re going to pay minimum wage and give people employee benefits, I have a bridge on the moon to sell you. Uber drivers are going to be self-employed until the day the robots take their jobs.

So what is Uber?

Uber is essentially a list of customers and a list of service providers. Put the two together and you’ve got a $100 Billion company.

Luckily anyone can use that same principle to do some content marketplace arbitrage or otherwise build a list that they have control over.

If you have a mailing list – especially a targeted, engaged and happy mailing list, then nobody can take that away from you. (Make sure to back it up, because then your email service provider can’t even take it away from you. That’s if you have a service provider. Better still to host your own emails.)

So probably the biggest lesson is to centralise your power using your marketing list.

Let’s finish up.

Small Fish, Big Pond

Unless you’re a lost Silicon Valley start-up billionaire, chances are by visiting this site you identify yourself as a small fish.

You’re in a big, global pond.

That means you’re in for some stormy seas and a rough ride. We’re living in a digital revolution that’s as big as the industrial revolution a couple of centuries ago.

That doesn’t mean you can’t play the game and win.

Survey the scenery (the economy, in other words) and act with interests that’ll get you towards a place of freedom and achievement.