Will Covid-19 jumpstart the ‘gig economy’ in Switzerland?

A bicycle courier brings food to people in lockdown during the Covid-19 outbreak in Lausanne, Switzerland Keystone / Laurent Gillieron

The so-called “gig economy” has taken off around the world, but Switzerland has always been lukewarm to the concept. Will the Alpine country be more open to ad-hoc employment following the coronavirus pandemic?

This content was published on July 25, 2020 - 11:00

Ride-hailing by smartphone, Airbnb, food delivery and on-demand home cleaning have shown that there’s no need to be hired by a company, since short-term or one-off services can easily be booked online. This new form of flexible employment has grown rapidly in much of Europe, the Americas and Asia.  

But Switzerland has so far not gotten on board.

The Swiss Federal Statistical Office conducted a survey External linkfor the first time of gig workers who provided services or sold goods through online platforms for money. Not only were there few gig workers providing services in this way, but the income was minimal.

In 2019, only 0.4% of Swiss residents said that they had used online platforms in the previous 12 months to engage in product sales, house rental, food delivery, and ride-hailing.

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In countries such as China, India and the United StatesExternal link, a sizeable segment of the working-age population has made providing goods and services on demand through the internet and mobile apps their main source of income.

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But most gig workers in Switzerland only make an annual pre-tax income of less than CHF1,000 (1,075) through online platforms. The per capita annual income of Swiss residents who take on gigs through online platforms is CHF 5,849 - just CHF 487 per month. The average monthly salary in Switzerland is CHF6,538 per month.

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‘It’s impossible to make a living on gigs alone’

Karin Frick, a researcher focusing on future trends in social and economic development at the Gottlieb Duttweiler Institute (GDI), a Swiss think tank, is not surprised.

“Switzerland is so wealthy and prosperous. As long as there are enough relatively high-paying jobs in the market, it is difficult for companies like Uber to gain a foothold here,” she toldExternal link the news website Watson.

The Statistical Office’s survey results bear out her observation. Of all Swiss residents who participated in the gig economy through online platforms, only 1.2% chose to be gig workers because they could not find a stable job.

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Marko KovicExternal link, president of the Zurich Institute of Public Affairs Research (ZIPAR), believes that it’s not that Swiss people aren’t interested in gigs, but that “compared with the United States and China, [for example], Switzerland is still a toddler in terms of the gig economy.”

The number of gig workers remains limited. “With the very few online platforms which have yet to take a strong foothold in the country, it is difficult to make a living in Switzerland by taking on gigs alone,” he said.  

The pandemic as a catalyst

Earlier this year, the various restrictions adopted by Switzerland to curb the spread of the coronavirus forced some freelancers who were once active in the gig economy — such drivers for app-based ride services, on-call domestic workers or freelance photographers — to stop working in the face of drastically reduced job opportunities and concerns over the spreading virus. However, the social distancing measures adopted during the pandemic have brought unexpected benefits to certain gig economy sectors.

“Since mid-March, Uber Eats has been very active in expanding business in Switzerland. In just a few months, we have added Lucerne, St. Gallen, Neuchatel and Winterthur to our service network on top of the initial 10 cities, and we plan to go on expanding our coverage in the coming months,” said Luisa Elster, head of public relations at Uber Eats Switzerland, an online platform that provides food delivery services. She noted that between January and June, the number of restaurant partners in Zurich alone doubled and the delivery area has expanded five times over.

Kovic believes that in the post-pandemic era, “Switzerland will have more online platforms and apps that match supply with demand, and there will be more fertile ground for the gig economy to grow. There is no doubt about that.”

The number of "blue-collar" service industry gig workers is expected to increase. That’s because some people may consider taking on gigs to make money amid the economic fallout from Covid-19 and resulting un-and-underemployment.

“I think this trend will continue in Switzerland, and companies [that offer gig jobs] will benefit from it,” Kovic predicts.

Good for workers?

But Kovic believes that although pandemic restrictions in Switzerland have enabled consumers to “keep a safe social distance”, a closer look reveals that food delivery instead of restaurant dining and ride services instead of public transport are made possible at the expense of the labor rights of gig workers.

Elster of Uber Eats emphasises that the company provided all drivers and food delivery staff with necessary protective gear such as masks during the lockdown, and began to offer all "independent partners" – as she calls the company’s gig workers – compensation to offset loss of income from accidents and diseases in 2018.

But Kovic says that’s the crux of the problem lies in addressing the lack of job security faced by gig workers.

“Is the gig economy beneficial for all stakeholders? No, the reality in recent years has been that it has many drawbacks,” he said. Like their peers in other countries, Swiss gig workers generally enjoy the benefits of flexible working hours brought by the gig economy but lack job security.

Kovic wroteExternal link in an article that gig workers are especially vulnerable when it comes to their identity and role within the framework of labour law. Most gig platforms do not regard gig workers as employees, but as “self-employed individuals” who bear their own risks. Gig workers are often responsible for their own social security and insurance. However, many gig workers don’t contribute to a pension fund and may suffer loss of income in the event of an accident.

In some parts of Switzerland, the courts have stepped in to rule in favour of gig workers’ full employment status. A Geneva court ruled in June that Uber Eats is an employer under the law and as such has the obligation to hire its drivers as full employees, with social insurance benefits.

“Switzerland needs strategic regulation which must be backed by policies,” Kovic says, citing a similar ruling in CaliforniaExternal link over the employment status of Uber and Lyft drivers as a positive example.

“I think Switzerland can draw some inspiration from it."   

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