The Gig Economy on High Street: Flexibility for Stores, Risks for Workers?

Bustling high streets signal the busiest time of the year for retailers. But behind the glittering window displays lies a labour revolution that’s raising eyebrows and alarms. Increasingly, major brands like Urban Outfitters, Lush, Gymshark, and Uniqlo are turning to gig economy platforms to fill their shop floors with so-called “freelance” workers. It sounds like a win-win: flexible shifts for young workers and cost efficiency for employers. But is this a convenient fix for retailers or a troubling loophole in employment rights?

What’s Happening?

Traditionally, retailers handled the Christmas rush by hiring agency workers, who enjoy basic legal protections like minimum wage, holiday pay, and rest breaks. Now, companies are bypassing these agencies, sourcing temporary staff through app-based platforms like YoungOnes and Temper. Workers on these apps are classified as self-employed freelancers, meaning they lack the rights of regular employees.

For instance, Urban Outfitters recently advertised on YoungOnes for “friendly young people” to work in their stores for £12 an hour. Gymshark sought 30 freelancers for its London flagship store, while Uniqlo and Lush followed similar patterns. Some businesses, like Emma Sleep, staff entire stores with freelancers. This shift reflects the broader rise of gig work across industries but also raises serious questions about fairness and protections for workers.

The Gig Economy: What’s Driving It?

The appeal for retailers is clear: hiring gig workers allows them to adjust staffing levels rapidly without committing to long-term contracts or paying for employee benefits. This flexibility transfers financial risks—such as periods of low customer footfall—from businesses to individual workers.

For workers, the arrangement can offer short-term benefits, like the ability to choose shifts and locations. But many face precarious conditions, with no guaranteed hours, sick pay, or job security. “This is about firms being able to flex staff up and down,” says Tim Sharp of the Trades Union Congress (TUC). “It’s clearly passing on risk from the business owner to the individual staff member.”

The Bigger Picture: The UK’s Gig Economy

The gig economy is not new, but its growth in the UK is staggering. As of 2023, approximately 4.4 million people—nearly 14% of the workforce—engage in gig work, up from just 2.3 million in 2016. While platforms like Uber and Deliveroo dominate public attention, sectors like retail, healthcare, and even education are increasingly relying on gig workers.

The flexibility promised by the gig economy appeals to young people, especially students looking for part-time work. However, research reveals that most gig workers earn less than the national minimum wage after accounting for expenses like transportation and equipment. A 2023 report by the Resolution Foundation highlighted that two-thirds of gig workers lack savings or financial safety nets, making them vulnerable to economic shocks.

The Legal Debate: Worker or Freelancer?

At the heart of this issue lies the question of employment status. UK law distinguishes between employees, workers, and the self-employed, each with varying rights. Employees enjoy the most protections, including redundancy pay and unfair dismissal rights. Gig workers often fall into the self-employed category, where legal protections are minimal.

The Labour government has promised reforms, aiming to clarify the employment framework. A proposed two-part system would differentiate between workers and genuinely self-employed individuals. However, unions warn that platforms exploiting current loopholes may find new ways to sidestep regulations.

For example, platforms like Temper claim to empower contractors with “autonomy and competitive rates.” Yet, critics argue that this narrative masks a reality where workers shoulder significant risks without reciprocal benefits.

What Does This Mean for Retail Workers?

For gig workers in retail, the challenges are immediate and tangible. Many must compete daily for shifts, with no guarantee of consistent income. Despite earning slightly above the minimum wage, they miss out on essential benefits like paid leave and sick pay.

The festive season, traditionally a time of economic opportunity for temporary workers, now exposes the vulnerabilities of a system prioritizing flexibility over fairness.

Unions like the TUC argue that these practices undermine the very idea of a social safety net. “It’s absurd that someone working in a shop could be denied basic protections,” says Sharp. Critics fear that gig work in retail could spread beyond seasonal peaks, becoming a permanent fixture of the labor market.

What’s Next?

The rise of gig work in retail reflects broader shifts in the economy, where technology and cost-cutting redefine traditional employment. But it also serves as a reminder of the importance of strong labour protections in ensuring that flexibility does not come at the expense of fairness.

For students and young workers entering the labor market, understanding these dynamics is crucial. Gig work may seem like an easy way to earn money, but it often comes with hidden costs. As the debate over employment rights evolves, one thing is clear: the future of work will require balancing innovation with equity.

Glossary of Key Economics Terms

1. Gig Economy: A labour market characterised by short-term, flexible jobs, often facilitated by digital platforms, with workers classified as independent contractors.
2. Minimum Wage: The lowest legal hourly pay an employer can offer to workers, set by government policy.
3. Self-Employment: A working arrangement where individuals operate as their own business, lacking the protections of employees or workers.
4. Employment Status: A legal classification determining the rights and protections a worker is entitled to, including employee, worker, or self-employed.
5. Agency Worker: A temporary worker employed through an agency, entitled to specific employment rights such as holiday pay.
6. Flexibility: The ability for businesses or workers to adapt quickly to changing demands, often cited as a benefit of gig work.
7. Precarity: Economic insecurity stemming from unstable employment, low wages, or lack of benefits.
8. Labour Market: The supply and demand for labour, where employers seek workers and individuals offer their skills for compensation.
9. Economic Shock: A sudden event, like a recession or pandemic, that disrupts the economy and affects workers and businesses.
10. Regulation: Rules or laws designed to control or govern behavior in markets, often to protect workers, consumers, or the environment.

By connecting these terms to real-world scenarios, this article hopes to illuminate the economic forces shaping our high streets—and the lives of those working on them.

The Rise of Informal Non-Contract Employment: A Balanced Debate

The surge in informal non-contract employment, particularly through gig economy platforms, has sparked a heated debate about its merits and drawbacks. Let’s break down the key arguments for and against this trend in the UK labor market.

Arguments For Informal Non-Contract Employment

1. Flexibility for Workers: Informal gig work allows individuals to choose their hours, offering flexibility that suits students, part-time workers, or those with caregiving responsibilities. Workers can accept or decline shifts, giving them control over their schedules. This autonomy appeals particularly to young people seeking short-term, low-commitment opportunities.
2. Adaptability for Businesses: For businesses, particularly in retail and hospitality, gig work provides an efficient way to scale their workforce up or down based on demand. During the Christmas rush, for example, retailers can quickly bring in staff without long-term obligations. This flexibility helps businesses remain competitive in an uncertain economic environment.
3. Cost-Effectiveness: Gig work minimizes labor costs for employers. By classifying workers as freelancers, companies avoid expenses like holiday pay, sick leave, and pension contributions. These savings can be reinvested in other areas of the business or used to maintain competitive pricing.
4. Opportunities for Young Workers: Gig platforms often target young people, providing them with accessible entry points into the labor market. For some, this experience can serve as a stepping stone to more stable employment or offer supplemental income during their studies.
5. Encouraging Entrepreneurship: Gig platforms promote the idea of self-employment, encouraging workers to think of themselves as entrepreneurs managing their own careers. This can foster a sense of independence and financial control for those who thrive in non-traditional employment settings.

Arguments Against Informal Non-Contract Employment

1. Lack of Worker Protections: The absence of a formal contract strips gig workers of fundamental rights, including sick pay, holiday entitlement, and minimum wage guarantees. Without these protections, workers are left vulnerable to exploitation and economic insecurity. For example, a worker who falls ill during a busy period loses income without any safety net.
2. Economic Precarity: Non-contract employment often results in unpredictable income, as workers compete for shifts on a day-to-day basis. This uncertainty can make it difficult for individuals to budget, save, or plan for long-term goals such as education or housing.
3. Erosion of Employment Standards: The proliferation of gig work risks undermining traditional labor standards. As businesses prioritize cost-cutting and flexibility, permanent jobs with fair pay and benefits may become less common, leading to a "race to the bottom" in employment conditions.
4. Shift of Risk to Workers: Gig platforms transfer the financial and operational risks of employment onto workers. While businesses enjoy the stability of lower fixed costs, workers bear the brunt of fluctuating demand, unforeseen expenses (e.g., commuting costs), and the absence of guaranteed hours.
5. Inadequate Legal Frameworks: Current UK labor laws struggle to keep pace with the rise of gig work. Legal ambiguities around employment status leave many workers in a gray area, unable to claim rights or protections afforded to employees. Critics argue that this loophole enables businesses to bypass their obligations while profiting from cheap, disposable labor.
6. Impact on Social Welfare Systems: The growth of informal employment has broader implications for public welfare systems. Gig workers typically do not receive employer pension contributions, potentially increasing future reliance on state pensions. Similarly, the lack of sick pay or insurance can strain public health and social services.
7. Psychological Toll on Workers: The competitive, unstable nature of gig work can lead to stress, anxiety, and burnout. Workers face constant uncertainty over income and must contend with the pressure of securing daily shifts or meeting platform ratings to remain employable.