An Institutional Logics Perspective on the Gig Economy

Abstract

We witness rising tensions between online gig-economy platforms, tax agencies, regulators and labor unions. In this paper, we use the framework of institutional logics as an analytical lens and scheme to understand the fundamental institutional challenges prompted by the advent of the online gig economy. We view gig-economy platforms as corporations that organize and self-regulate markets. In doing so, they span two parallel markets: the market for platforms competing to provide intermediation services and the market for the self-employed competing on platforms to provide peer-to-peer services. Self-regulation by platforms also weakens the traditional roles of the state. While the corporation and market logics empower the platform, they weaken self-employed suppliers as platforms' design constrain suppliers to grow into a fully-fledged business by limiting their entrepreneurial freedom. At the same time, current labor law generally does not classify suppliers as employees of the platform company, which limits the possibility to unionize. The current resolutions to this institutional misalignment are sought in "band aid solutions" at the level of sectors. Instead, as we argue, macro-institutional reform may be needed to re-institutionalize gig work into established institutional logics.

Uber-production: From global networks to digital platforms

“…On the other hand, we would suggest to advance beyond an economistic reasoning on markets (regardless of whether one-or multisided) and to explore and conceptualise further how platform operators are not simply match-makers but instead veritable market-makers. As market-makers, platform operators not only enable individual transactions but actually frame the entire institutional and regulatory framework of the platform economy (Frenken et al, 2018;Kirchner and Schu¨ßler, 2020). In Polanyian (1945) terms, platform operators, then, co-produce their own institutional and societal embeddedness (Grabher and K€ onig 2020).…”

“…The juxtaposition between ‘asset-heavy’ GPN firms and ‘asset-light’ platform operators is presumably most starkly evinced in the politically charged debates on the status of the asset labour (Frenken et al., 2018; Kirchner and Schüßler, 2020). Whereas the production logic of GPN implies that labour is employed and, at least in the controlling echelons of the network, is regarded as a critical asset (Coe and Yeung, 2019), the very essence of the matchmaking logic of platforms is to refuse contracted labour the status of employees (Frenken et al., 2018). Platform operators insist in the role of the neutral intermediary that solely matches the supply of and demand for independent contractors (Graham et al., 2017).…”

Having their cake and eating it too? Online labor platforms and human resource management as a case of institutional complexity

“…Institutional complexity occurs when organizations face tensions that arise from competing institutional logics, that is, ideal-type, taken-for-granted social prescriptions of what constitute legitimate goals and activities (Greenwood et al, 2011;Thornton & Ocasio, 1999). Through their use of HRM activities, we expect that online labor platforms create tensions between two competing institutional logics: (1) the market logic that legitimizes profit-making through free, unregulated competition among self-employed workers, and (2) the corporation logic that legitimizes market share and revenue growth through coordination and control of employees by an employer (Frenken et al, 2018).…”

“…market logic) or employees that are controlled by an employer (i.e. corporation logic) (Frenken et al, 2018;Meijerink & Keegan, 2019).…”

“…Although extant research discusses response strategies to institutional complexity (Greenwood et al, 2011;Lewis et al, 2019;Pache & Santos, 2010), these strategies may not translate well to online labor platforms as they involve favoring one logic over others. As corporations that organize markets, online labor platforms are unlikely to opt for a single logic since they see working with freelancers as desirable (a market logic) while simultaneously wanting to control these freelancers (a corporation logic) (Frenken et al, 2018). Our study therefore explores the institutional complexity of HRM for controlling freelance gig workers, and the response strategies adopted by online labor platforms for integrating competing institutional logics.…”