i DRAFT Opportunities and risks of the gig economy Sascha Wlaschek
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i
DRAFT
Opportunities and risks of the gig economy
Sascha Wlaschek
ii
Bibliography
Heger, M; Schermann, M.; Volci, K. (2012): Business Plan Professional: From
Vision To Operationalization, Vienna
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Concepts For The Production Of Today, Wiesbaden
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And Measures For Quality Assurance In The Hotel And Gastronomy Industry,
Munich
Wirtz, B. (2005): Integrated Direct Marketing: Basics - Instruments - Processes,
Wiesbaden
Wlaschek, S. (2019): The Business DNA - Success Can Be Planned, Minden
https://unternehmer.de/lexikon/finanz-lexikon/gig-working
https://unternehmer.de/lexikon/finanz-lexikon/gig-working
https://karrierebibel.de/gig-economy/
https://en.wikipedia.org/wiki/Freelancer.com
https://www.finanzen.net/bilanz_guv/freelancecom (abgerufen am 11.9.2020)
https://www.freelancer.de/feesandcharges/# (abgerufen am 11.9.2020)
https://marjorie-wiki.de/wiki/Twago
https://www.allenovery.com/en-gb/global/news-and-insights/news/randstad-
erwirbt-europas-fuehrenden-freelancer-marktplatz-twago
https://probao.de/twago-erfahrungen/
https://trusted.de/twago
https://www.handelsblatt.com/unternehmen/beruf-und-buero/the_shift/freelancer-
kompass-2019-so-unterscheidet-sich-der-stundensatz-der-selbststaendigen-von-
dem-der-festangestellten/24935554.html?ticket=ST-926414-
a21HlYZECsRyddEnuU09-ap4
https://de.statista.com/statistik/daten/studie/370252/umfrage/umsatz-der-
randstad-
holdingweltweit/#:~:text=Umsatz%20der%20Randstad%20Holding%20weltweit
%20bis%202019&text=Der%20Umsatz%20des%20in%20den,rund%2023%2C7
%20Milliarden%20Euro.
https://thedlf.de/upwork-aktie-investieren-gig-economy (abgerufen am 11.9.2020)
https://www.upwork.com/i/pricing/
iii
https://www.finanzen100.de/finanznachrichten/boerse/fiverr-die-gig-economy-
und-ihr-weiterer-heiss-ersehnter-boersengang_H841832424_10860012/
https://de.wikipedia.org/wiki/Fiverr
https://www.finanzen100.de/finanznachrichten/boerse/fiverr-die-gig-economy-
und-ihr-weiterer-heiss-ersehnter-boersengang_H841832424_10860012/
https://www.finanzen.net/chart/fiverr_international
https://spendmatters.com/2019/06/14/fiverr-ipo-launches-at-21-and-share-price-
nearly-doubles/
https://www.herder.de/leben/lebensberatung-und-psychologie/maslowsche-
beduerfnispyramide/
https://wirtschaftslexikon.gabler.de/definition/normalverteilung-39769
iv
Table of Contents
1. Chapter One: Introduction ....................................................................................... 1
1.1 Definition of the Gig Economy .......................................................................... 1
1.2 The market of this piece of work and the demarcation ...................................... 2
1.3 Relevance of the topic ...................................................................................... 4
1.4 AuthorĀ“s experience with the gig economy ....................................................... 4
1.5 Statement of the Problem ................................................................................. 4
1.6 Research method ............................................................................................. 4
1.7 Objectives of the Study..................................................................................... 5
1.8 Hypothesis ....................................................................................................... 5
2 Chapter Two: Body .................................................................................................. 6
2.1 Methodology ..................................................................................................... 6
2.1.1 Introduction ............................................................................................... 6
2.1.2 Graphical representation of the Research Framework ............................... 6
2.1.3 Sampling Techniques ................................................................................ 7
2.1.4 Data Gathering Procedures, research Instruments and research Design .. 7
2.1.5 Statistical Treatment of Data ..................................................................... 7
2.1.6 Ethical consideration ................................................................................. 8
2.2 Opportunities and Risks ................................................................................. 10
2.2.1 Introduction ............................................................................................. 10
2.2.2 Future Prospects ..................................................................................... 13
2.2.3 Risks perceived by the business owners ................................................. 14
2.2.4 Opportunities ........................................................................................... 27
2.2.5 Opportunities from the Perspective of Gig Workers ................................. 41
2.2.6 Opportunities for Gig Workers ................................................................. 52
2.3 Findings and Results ...................................................................................... 61
2.3.1 Introduction ............................................................................................. 61
2.3.2 Summary of Gaps / Findings from this work ............................................ 62
3 Chapter Three: Conclusion and Recommendation ................................................ 66
3.1 Introduction .................................................................................................... 66
3.2 Review of the research ................................................................................... 66
3.3 Limitations of the study ................................................................................... 66
3.4 Implications of the Study / Answering the Hypothesis ..................................... 67
3.5 Recommendations ......................................................................................... 67
3.6 Limitations often he study ............................................................................... 68
3.7 Implications of the Study / Answering the Hypothesis ..................................... 68
4 APPENDICES ....................................................................................................... 70
v
5.1 Summarized Results of the Survey ................................................................ 70
List of Figures
Figure 1 .......................................................................................................................................... 6
Figure 2 .......................................................................................................................................... 8
Figure 3: Alle Bereiche Fiverr ..................................................................................................... 8
Figure 4 5 ....................................................................................................................................... 9
Figure 5 ........................................................................................................................................ 10
Figure 6 ........................................................................................................................................ 11
Figure 7 ........................................................................................................................................ 11
Figure 8 ........................................................................................................................................ 12
Figure 9 ........................................................................................................................................ 13
Figure 10 ...................................................................................................................................... 18
Figure 11 ...................................................................................................................................... 22
Figure 12: Picture shows a showreel and no violations known to the author ................... 25
Figure 13 ...................................................................................................................................... 38
Figure 14 ...................................................................................................................................... 65
Figure 15 ...................................................................................................................................... 69
vi
Abstract
Introduction
This paper addresses the opportunities and risks of the relatively young industry
of gig workers. A great part of the industry, which emerged after the financial crisis
of 2008-2009, is divided into a few large platforms. Some of these platforms have
grown by up to 40% per year in the past years, which makes IPOs of the industry
giants an exciting topic of the economy. The objective of this research is to
investigate whether the conditions for further growth are given and if not, what is
necessary for them.
Body
In order to get the best possible insight into the industry, gig-workers (freelancers
who do short jobs) and gig-clients were interviewed for this work.
The survey was conducted according to the basic elements of the SWOT analysis.
The SWOT analysis, which was elaborated in narrative interviews live or via zoom,
was used to obtain further information from the participants of the survey.
The solution approaches to exploit opportunities and minimize risks were
developed in detail by a group of experts in four full-day meetings. The expert
group weighed up every opportunity and every risk with the internal strengths and
weaknesses of the industry. In addition to various feasible suggestions for
improvement, this work brought a new insight that can strengthen and
revolutionize the industry. This is about the emergence of a new profession that
can be applied in a variety of companies around the world and can become a real
game-changer - the gig worker manager.
Conclusion
This thesis shows the great potential but also the danger that the growth of the
industry could suffer. As some platforms are already shrinking, the entire industry
is endangered in the long run, if not countered. The findings of this research can
help to improve the market situation of the Gig-Economy significantly and
sustainably.
1
1. Chapter One: Introduction
1.1 Definition of the Gig Economy
The term "gig economy" is used to describe a part of the labor market. This market
usually involves smaller, temporary contracts/projects. The definition comes from
the music industry where a gig is an order. Musicians apply or are hired to perform
for example for one evening. If the musicians are more popular, the jobs become
more regular and bring variety - so does the work of the gig-workers.
Like the bar owner has no employment contract with a musician who comes to the
bar for an evening, the client in the gig economy has no employment contract with
a gig-worker - the person who does the gig (the short assignment). Gig-Workers
therefore live (by definition) from job to job.
This is the difference with freelancers. A gig lasts for a shorter time than the normal
activity of a freelancer. In Germany in particular, there are quickly problems with
a bogus self-employment. This occurs if employers use the freelance position
(thus the self-employment of the contractor) themselves so that they do not have
to pay taxes for the "employee". Even with longer contractual relationships.
Due to the usually short duration of the gig, such problems arise rarely. This offers
more security for the client so that he does not have to pay later. Also the payment
model, which usually runs over the relevant platforms, provides a safeguard in the
direction of the tax office, since individual jobs are difficult to assign - even if you
work with a gig-worker for a long time.
The gig worker himself can be self-employed, freelance, or even a company. Here
you can choose the model that fits best. Again, the payouts come from the
platform. When choosing the right legal form for a gig worker, the other
acquisitions that may arise in the context of self-employment in addition to working
in the gig economy are also decisive.1
1 https://unternehmer.de/lexikon/finanz-lexikon/gig-working (aufgerufen am 24.8 2020)
2
1.2 The market of this piece of work and the
demarcation
The relatively young market of the Gig-Ecomomy is spread over a few main
platforms. The emergence of the gig-economy market is estimated to have
occurred during the financial crisis around 2008. Here, people have been thinking
about how they can get money quickly without the client taking big risks. The
market dealt with in this study, works on such freelancers who can be creative
worldwide for companies.
The most important platforms for gig workers are:
ā¢ Fiverr
ā¢ Freelancer
ā¢ Twago
ā¢ UpWork
Platforms such as Uber, Airbnb, myHmmer and Co. are not covered in this study
as they are not the subject of this thesis. Likewise, there are various additional
platforms for IT experts who mediate worldwide. Due to the often-long time
commitment of IT experts, these platforms are also not discussed here.
Freelancer.com
Was founded in Australia in 2009. Freelancer.com has a total of over 45 million
users on its platforms. The IT sector is very intensive and involves around 34% of
Freelancer.com users. Freelancer starts with a briefing to which freelancers can
apply. Freelancer.com has a strongly growing turnover of over 20% in the last
couple of years. The turnover of the platform amounts to 237 million euros. The
total turnover of the platform, with 10% fees to freelancers and 3% fees from
clients, amounts to approximately 2 billion US dollars (approx. 1.82 billion euros)
(the total amount earned is also known in the industry as the Gross Service Value
(GSV)).
Twago
Like freelancer.com, it was founded in 2009 - but in Germany. Twago was
completely taken over by Randstand Holding in 2016. Randstad Holding itself is
an international recruitment company based in Amsterdam. Twago also relies on
3
a model which includes a mixed calculation of 10% of the project budget and
service fees. Twago itself does not have a good rating on various evaluation
platforms. Some platforms advertise to go to the competition. Twago itself has
about 700.000 freelancers - again a strong IT-load with over 30%. Randstad
Holding had a total turnover of 23.7 billion euros in 2019. The turnover falling on
Twago could not be determined for this study.
Upwork
Upwork was founded only in 2015 in the USA. There are about 12 million
freelancers and about five million clients on Upwork. Upwork is also benefiting
from a growing market. In 2019, the GSV was around 2.1 billion US dollars.
Upwork itself generated revenues of around 300 million U.S. dollars. This
corresponded to an increase in sales of 20% compared to the previous year.
Upwork also charges 10% commission from its gig workers. In addition, Upwork
charges 3% commission from clients and the option of premium accounts.2
Fiverr 3
Fiverr was founded in Israel in 2010. Fiverr has been listed on the stock exchange
since 2019. In 2019, Fiverr generated sales of 82.5 million (only) - and that with
a whopping 20% commission. Nevertheless, experts and investors see great
opportunities in Fiverr. In 2019, Fiverr reported a revenue growth of around 40%.
The value of one share rose from 29 Euro to 105 Euro from the beginning (June
14, 2019) to September 11, 2020. Fiverr also builds on a fee from the buyer in
addition to the 20% commission. The GSV amounts to approximately 400 million
Us dollars.
Fiverr best reflects the simplicity of Gig-Ecomomy. Here, there is no need to create
elaborate briefings to start a project.
The Fiverr platform is the platform on which all conclusions in this paper are based.
Besides the simplicity, Fiverr shows by far the strongest characteristics of a real
gig platform.
2 https://www.upwork.com/i/pricing/
3 https://www.finanzen100.de/finanznachrichten/boerse/fiverr-die-gig-economy-und-ihr-weiterer-heiss-
ersehnter-boersengang_H841832424_10860012/
4
1.3 Relevance of the topic
As the market grows, so does its relevance. It is difficult to get reliable sources for
the growth, but basically the market of the gig economy is a strongly growing
market. Platforms are gaining more and more popularity, which is also reflected in
the share prices. For this relatively young industry, enormous revenues are
already being generated so that a further increase, which is also favored by the
Corona Pandemic, will lead a large part of the working population into the Gig-
Economy.
1.4 AuthorĀ“s experience with the gig economy
The author himself has over 12 years of experience in gig management. On and
through Fiverr alone, about 150 projects have been realized by the time this thesis
was written. Some of them with up to five gig-workers in the project. As a project
manager, the author knows how relevant and reliable platforms and gig workers
are for taking advantage of opportunities, but he also sees the risks for smaller
companies that have opted for the Gig-Economy.
1.5 Statement of the Problem
The problem which is treated in this thesis is that the potential of the gig economy
is still relatively small even after 10 years. Despite the international approach, the
security for clients and the geographically independent work for gig workers, the
gig-worker model generates significantly less revenue than the top 4 temporary
employment agencies in Germany. In this paper we investigate reasons why the
potential is not being exploited and what the obstacles are for small and large
companies.
1.6 Research method
For this relatively young market, for which there is not yet a significant number of
books, the most obvious research method is primary research. Here, primary
research is divided into a narrative interview, which is conducted using a
questionnaire. Following a survey of about 60 relevant individuals, a panel of
experts looked for solutions to exploit opportunities and minimize risks.
5
1.7 Objectives of the Study
The goal of this thesis was to analyze the Gig-Economy to identify opportunities
and risks that help to reduce barriers.
It is not the goal of this thesis to analyze and evaluate the effects on the
"conventional" labor market.
1.8 Hypothesis
A1 - The Gig-Economy has the potential to revolutionize a large part of the
professional world.
A0 - The Gig-Economy has a rather weakening character and represents only a
small, alternative part of the labor market in the future.
6
2 Chapter Two: Body
2.1 Methodology
2.1.1 Introduction
This chapter deals with the data collection of the work and its relevance. Chapter
2.1 describes the research framework of the work, the sampling procedure, the
methods and instruments of data collection. For the sake of completeness, the
ethical consideration of the topic of the Gig-Economy is addressed here but not
pursued further. As described in the introduction to the whole thesis, the ethical
approach is not part of this research.
2.1.2 Graphical representation of the Research Framework
The components of the framework are established by the author of this thesis, the
respondents, and the expert panel.
Figure 1
7
2.1.3 Sampling Techniques
The thesis is a sample selection, which is a mixture of clients (35) and gig-workers
(24). A total of 59 relevant persons were interviewed. The survey ran from June
2019 to May 2020.
2.1.4 Data Gathering Procedures, research Instruments and
research Design
This research is a partial survey in the context of the Gig-Ecomomy survey around
the freelance platform Fiverr.com. The domains on the platform were a mixture of
all the offered domains. Here, gig workers were surveyed from gigs with a length
of one day up to gigs with a length of more than a month.
A narrative interview was chosen as an instrument, which was conducted in an
accompanied way (via zoom, bigbluebutton, video-telephony and live). The
documentation and the guide can be found in the appendix as a blank form.
The author has chosen this method to ensure that all questions are answered and
all interviews can be evaluated. The narrative interview also gave the opportunity
to ask for specific answers and to understand the meaning behind them.
Especially with open questions, it can otherwise quickly lead to
misunderstandings. By using this method it was possible for the interviewees to
have a comprehensive view and contribute to the later searched solutions.
The search for possible solutions was developed in four full-day expert meetings
from a group of four relevant experts. The experts who participated were either
gig-workers or clients themselves, representing both sides of the industry.
2.1.5 Statistical Treatment of Data
The goal of the research was to work according to the criteria of objectivity - if
possible no influences from one' s own view on the research, reliability - the same
results in case of repeated research, and validity - to research with a meaningful
research method.
With the number of interviewees and the members of the expert group, the author
assumes that he achieves a certainty of at least 95% in the Gaussian distribution.4
4 https://wirtschaftslexikon.gabler.de/definition/normalverteilung-39769
8
Figure 2
2.1.6 Ethical consideration
The ethical consideration of this work undoubtedly leaves a lot of room for
maneuver. Here the pros and cons must always be weighed up.
Pro
The pro argument here is an increasing and usually better possibility for
companies to act more economically and plan more precisely. This includes all
areas covered by the Gig-Economy (focus is usually: IT, design, creative writing)
- if opportunities are used and risks are minimized.
Figure 3: Alle Bereiche Fiverr
9
Cons
As a counter-argument (cons), the most important thing here is of course the loss
of normal jobs in the company - thus a loss of security for employees and a
possible increase in unemployment. The argument of the loss of security has
already been identified by Maslow as one of the most important indicators for
healthy growth and is shown in the pyramid of needs.
Figure 4 5
With this counter-argument, however, it must be pointed out that the gig economy
not only causes the loss of securities, but also that securities are only created in
second or third world countries, since regionally in countries such as Pakistan,
Bangladesh or similar countries there is hardly any employment.
The goal of this thesis is not to analyze or evaluate the effects on normal
employment relationships. It is only about the opportunities and risks that arise
from gig-economy - without the influences on the conventional labor market.
5 https://www.herder.de/leben/lebensberatung-und-psychologie/maslowsche-beduerfnispyramide/
10
2.2 Opportunities and Risks
2.2.1 Introduction
In the empirical survey for this thesis, the narrative interview followed the basic
points of a SWOT analysis.
Figure 5
The reason for the question based on the SWOT analysis was the resulting
conclusions that created the solution approach.
In order to use opportunities, they must be defined and compared with strengths
and weaknesses. 6
6 Vgl. Heger u.a. (2012): 50.
11
Figure 6
In order to minimize risks, weaknesses must be minimized and strengths
expanded or consolidated.
Figure 7
The expert panel thus used the SWOT analysis of the narrative interviews as a
basis for a practical solution search. According to the panel, solutions must come
from the people who work there every day.
If we transfer this approach often to the "normal professional world", the approach
would correspond to Bottom-Up planning. However, it should be noted here that
the world is changing and is rapidly moving into a digital world. This change implies
that the position of management, which is called "up" in the model, is rather
different in the gig-economy. Even if platforms are managed, they also represent
a service, which does not create a superior position.
12
Figure 8
The prerequisite for the inclusion of an expert in the panel of experts was that they
have at least 5 years of experience in the gig economy so they understand the
background and mentality.
Based on the narrative interviews, answers were compiled and sorted according
to their meaning. The summarized answers can be found in the appendix starting
on page ....
The summarized answers were again divided into three main categories.
These are:
o Costs/Time
o Communication and
o Quality
The recombination, in the above-mentioned categories, has avoided unnecessary
double processing, which has been reduced to the minimum.
13
2.2.2 Future Prospects
The supplementary question from the narrative interview requested the
respondents' prognosis for the development of the entire industry. This also
underscored the importance of research on this work.
The primary research showed that a majority of both parties surveyed in the Gig-
Economy consider the industry to be rather critical. About 75% of the clients see
problems in the conventional system of the Gig-Economy. About 80% of the Gig-
Workers saw their future in the Gig-Economy as uncertain or even threatened.
The reason for this was the personal experience of the last years. The growth
described in the introduction is that many creative people are entering the industry
only now and not that the existing users are placing or completing more orders.
An explanation for this phenomenon can be found in research in the model of
early-adapters and Co.7
Figure 9
7 Vgl. Wirtz (2005): 124
14
2.2.3 Risks perceived by the business owners
I. Financial Risks
Financial risks are probably the most heavily weighted issue in any industry in the
world. While quality risks and communication risks can often be dealt with
subsequently, financial risks always represent the risk that liquidity is no longer
sufficient and the company becomes insolvent.
In addition to typical financial risks such as termination, non-compliance, non-
usable files and renegotiations, the respondents also mentioned typical IT risks
such as the passing on of passwords or access by gig workers to software and its
users. Especially in the western market, data loss can quickly lead to lawsuits -
which in turn can lead to enormous financial loss. Liquidity can be jeopardized by
a time shift of orders because the next steps in the project, such as advertising or
sales, cannot even start.
Quality - weaknesses (financial risks)
The biggest risk according to all opinions is that projects are incompletely finished.
This contradicts the philosophy of a wake-up call but is a common reality. Orders
can be completely or partially useless. Completely useless jobs are usually found
in software. Here it is often not possible to continue writing a certain code
afterwards. Thus the quality is on the lowest level. The only purpose that such
work can fulfill is to learn from it and to include possible positive points in the
documentation or in the next job description.
Stolen content can entail a considerable financial risk. This is about the possible
violation of copyrights which are punished separately.
Files created with pirate copies can cause considerable financial problems.
Especially with complex systems such as CAD or 3d, but also software languages
and image files, it can lead to files becoming completely unusable.
A lack of competence of gig workers can lead to serious errors in the project
architecture. This is an enormous problem in all complex projects, for example in
the IT or CAD area. The reason for this is that although topics can obviously be
implemented, the basis for this is often missing. Programming courses, for
example on Udemy, can make it possible to program, but without the foundation
15
of the architecture, a development according to western standards is almost
impossible. Selecting gig workers in the belief that they can handle the project is
also due to the unrealistic evaluations.
Solution approach - eliminate the weaknesses in quality
- The mistake here is clearly on the side of the client. The gig-worker asks them
to accept the order now - bound to a promise of completion. The platform has to
prohibit and sanction this practice. Also, an appeal to all clients is to be made that
this method must not be supported. As a client, the work model must always be
kept in mind - and a work contract is always and solely based on the successful
completion - not on an attempt.
- With regard to pirate copies, test files can be requested. In this way, pirate copies
(e.g. through watermarks) can be exposed, but also old versions. Furthermore,
these details must be recorded in the order description and, if necessary,
documented in the specifications. An offence against the copyright should also be
punished by illegal software use of platform pages.
- For complex projects, from clients and platforms, it should be noted that western
countries have different standards and a different background. From this it can be
deduced that important parts of a project, like for example the architecture, may
not be made by gig workers but by western experts. Gig-Workers may then be
able to provide some input. Alternatively, it would be possible that experts look
over the work before handing it in and accept it. At Fivverr.com there is for example
a three day evaluation obligation - this should be extended to one week for
software.
Quality - strengthening (financial risks)
One strength of quality in terms of financial risks is the large selection of gig
workers. Also, the encounter of nerds and underdogs can have advantages here.
There are nerds and underdogs who sometimes work for 1/10 - 1/5 for the salary
of a western expert. This offers various chances to create cheaper products and
to realize more projects for the same money. These factors can reduce the
financial risk.
16
Solution approach - expanding the strengths of quality
- Company internal directories of possible platforms are to be kept. A regularly
planned Google search can also help to be always up to date. One can assume
that many companies use PR for a market launch so that the tab "News" at Google
provides various new opportunities for a secondary regular research.
- A regular search for new gig workers on the platforms already in use can also be
very helpful. Here the recommendation to the gig-worker platforms like Fiverr.com
would be to introduce more sorting functions. For this approach they should add
the function "search for gigs of newcomers".
Cost/time - weaknesses (financial risks)
Renegotiation can be a big problem, especially in relation to the aspect of time. If
the gig worker sees his own position as strong, this can lead to problems.
Rework times can drive whole projects into a partly unplanned length.
Especially if follow-up tasks are defined and need the processing of a point, this
can cause big time problems which can endanger the liquidity.
If the gig-worker considers a project to be too difficult, it is always possible to abort
it. This can destroy complete projects and of course, if not completely destroyed,
it can have a huge impact on the time. The financial risks are strongly dominated
by the loss of time.
Solution approach eliminate the cost/time weaknesses
- Renegotiations may only be permitted if the client makes changes. However, a
project must always be clearly communicated by the client.
- Reworking times may only be given a maximum of 3 times. The unlimited number
of changes can extend projects indefinitely. A quality rating would also be possible
here. This means that gig workers are additionally evaluated by the number of
reviews. This quality rating should be awarded separately.
- To reduce the risk of termination, premium projects should cost more but also
provide more security.
17
The expert panel has considered a continuous documentation program which is
led by platforms.
The point here is that milestones are visible but also data and progress are
continuously uploaded and thus are free for viewing but can also be used in case
of termination. Milestones divide a whole project into partial steps. Optionally, a
project could be divided by sub-steps or by time. For example: "divide this project
into 4-time units". The model is similar to the Github platform in the software area.
With Github, progress can be tracked and offers direct communication on the
status of the work.
Likewise, in premium projects, gig workers could also be kicked out of platforms,
for example after 3 cancelled jobs, to emphasize the seriousness of the project.
This creates more pressure on the qualitative elaboration of projects.
Cost and time strengths (financial risks)
The most important strengths in terms of minimizing financial risks are the
character of the plant model.
Approach Expansion of Quality Strengths
- So far, the work model is well communicated to the gig workers from platforms.
This must absolutely remain so.
- It is also recommended (as described in the previous section) to set milestones
and to keep a complete documentation. The documentation can make the
maximum of usable information useful in case of a termination. This can save time
in replacement projects.
Communication - Improving weaknesses (financial risks)
The emerging success coach mentality - you can do something, let it out, take a
lot of money, believe in yourself.... Represents a big financial risk factor. People
are encouraged by this trend to appreciate themselves more. A deceptive
conclusion is that after hearing such a message, one's own work is directly worth
more. The fact that work becomes more valuable by an increase in quality is
usually not considered.
18
Another possibility to hide costs and not to mention them "legally" in the
communication is the function that can be hidden behind a buy button. Especially
when you are watching gigs to plan with the prices, the costs are not visible at first
sight because of this hiding function. Sometimes without these "additional costs"
there are not usable files because without the "Commercial Rights" there is not
much to do with files.
Figure 10
A lack of understanding of the client's location also represents a financial risk. The
reason for this is that different views on quality does not allow for acceptance in
the client's location because the product does not meet the expectations.
Language barriers on platforms can quickly lead to misunderstandings, which can
endanger the whole project and therefore the financial situation. Here the risk can
go so far that platforms can consider the contract as fulfilled, especially through
mistakes in communication.
Lack of communication within the gig runtime is a risk if projects are not completely
planned. Also a slow response time can take a lot of time, especially when
changes are made.
19
Cultural discrepancies can have an impact on various issues. On the one hand,
the different views of quality, but also honesty and reliability (e.g. for subsequent
support, etc.) must be considered.
Solution approach eliminate the communication weaknesses
- Counteracting the success coach mentality is only possible to a very limited
extent. Comparison pages on the platforms could show prices for comparable
gigs. Also, a table could be given beside the comparable Gig's which shows how
many years of experience the Gig-Worker brings along. The practice has shown
the expert group here that it is clearly easier and more timesaving to work with
"professionals" who already have many years of professional experience.
- Hidden costs should be prohibited from the platforms. Prices must be
continuously marked in the different gig pacts.
- For risks that are connected with this, the solution was chosen that data and
insights into the respective country should be visible through platforms. "Country
wikis" but also video interviews of companies that show products and their quality
are indispensable for a correct understanding.
- To counteract linguistic and cultural risks, the expert group recommends the
introduction of interviews/video interviews - to improve the assessment of gig
workers, platforms can, for example, also create the possibility of video interviews
being visible for a small fee due to the storage requirements. Through the
interviews, clients could get a much better picture of the gig-worker or create a
clearer profile with the help of industrial psychologists. Such an interview could be
created by the platforms for each gig area (e.g. graphics, IT, 3D, CAD, creative
writing) by means of a questionnaire. In the questionnaire it is important that the
gig-worker presents himself professionally and realistically. This is about
professional and personal skills.
- For corrections - which might not be possible due to a lack of communication
between the gig-worker and the client - the experts decided to use a kind of alarm
system that allows push notifications with priority. In this case, 100% of the gig
workers are alerted - so that this function is not used, it could be declared as a
paid service.
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Strengthen communication strengths (financial risks)
Communication strength is also clearly communicating the work model.
Approach Developing strengths
- As described in the previous chapter, it must be communicated that the payment
of the gig-workers will only be made after a satisfied acceptance by the client.
II. Quality risk
The quality risks named by the respondents ranged from simple misunderstanding
to commercial data theft.
The data loss/data theft is unfortunately not very far-fetched as it is handled by gig
workers without any problems since all accesses for the gig workers are usually
available.
Quality risks can also occur afterwards due to errors in the architecture of projects.
The data theft discussed in this chapter is in contrast to the data theft in the
previous chapter related to the quality and not to the financial risk.
However, quality risks also include misunderstandings that can render projects
useless. It should be noted here that a gig platform always represents a two-sided
trust. A project - even if it is not completed from the client's point of view or is in
very poor quality - can be considered as completed by the platform.
However, gig-workers can also lose some of their own know-how because
outsourced areas can be neglected internally.
Requirements for the implementation of quality opportunities - improve
weaknesses and develop/use strengths.
Improve quality weaknesses (quality risk)
Stolen content refers to work that is simply copied or bluntly copied. Such works,
like the use of pirated copies, violate the applicable copyright law. Unfortunately
this is often found in the industry. Every gig-client has already had experience with
stolen content, in the processing of orders.
21
A lack of knowledge or the use of other work to present oneself as an expert can
lead to the risk of misjudging a gig worker and endanger the quality of a project. A
project cannot become better than the skills of its developers allow.
The theft of data is a real problem, especially due to insufficient control
possibilities, a relationship of forced trust arises.
Solution approach - eliminate the weaknesses
- Piracy and fake profiles must be directly punished and lead to the referencing of
platforms.
- Lack of control and data theft can only be prevented by extensive tracking.
Alternatively, a backup platform could be created that opens programs under a
protection program and only allows editing in this program.
Thus, the platform would provide for data security, through virtual servers, which
could be carried out at different levels. Important elements would be, for example,
password encryption and the use of work programs (such as CAD, coding or other
graphics programs) via the Gig platform. Virtual servers can also block copying
via drag and drop or in any other way.
The cost of this solution would require extra fees. This solution would also be a
possibility for any third party vendor who could set up such a company.
Quality Building on strengths (quality risk)
Underdogs and nerds can sometimes complete projects cheaper and better than
their own employees. However, this is also at the expense of their own internal
know-how and can therefore lead to a long-term quality risk.
Solution approach - building on strengths
- The solution would be to extend the individual know-how so that developers
become project managers. The individual know-how should be used here to keep
the overview and to be able to intervene. Therefore it is important to pay attention
to languages and formats that can be used in the company itself.
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- With regard to change management, it should be communicated that it is not a
matter of reducing the number of employees, but of being able to achieve more
with the same budget.
Figure 11
Only with the right communication does change management bring the desired
result - that after the change, improvements in the company will also arrive. If the
employees are not properly prepared for these changes, which can be threatening
in view of the capabilities of the Gig-Economy, working with the Gig-Ecomomy will
be difficult.
ā¢ For new job postings, the Assessment Center should provide exercises that
are tailored to project management, with a focus on working with gig workers.
Improve cost/time weaknesses (quality risk)
Delays (whether due to renegotiations, improvement times or even partial
terminations) in the process can lead to a loss of time that subsequent
departments have to compensate for. This means that less time is available for
the same planned follow-up task, which can be at the expense of quality if the
deadline cannot be postponed.
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Solution approach - eliminate the weaknesses
- In order not to jeopardize the quality in projects by a loss of time, the possibility
of quickly forming teams in an emergency or finding supporters for gig workers
who can compensate for a loss of time should always be considered. These
additional gig-workers should also be booked via platforms to ensure the security
of the work contracts. Searching for additional gig workers can be done via the
platforms or by contacting the gig worker himself. It would make sense to have a
contact list to be able to use reliable gig workers.
- The survey also showed that every client has already had to put up with an
enormous loss of time. The Gig-Economy stands for a free, not bound to time and
place lifestyle. Clients must be aware that for projects, buffer time is inevitable. If
this buffer time is taken into consideration, quality risks based on time losses will
occur less frequently.
Build cost strengths (quality risk)
The favorable costs in combination with the large offer and the work contract can
be used to further minimize quality risks.
Solution approach - expanding strengths
- It should always be kept in mind that prices are extremely low in the gig economy.
A comparison should always be made to the normal costs in companies with
similar tasks. For this the basic condition is that costs in the enterprise are
separated and products are assigned as clearly as possible. If a customer/project
manager sees the actual costs, he can use the advantages of the Gig-Economy
to have the same project done at least twice. This leads to a wider view of the
processing but also creates new nerds and underdogs. For this purpose, the
budget available for recruiting can also be used.
Improve communication weaknesses (quality risk)
Language barriers, understanding of the client country and hidden costs have
already been discussed in the previous chapter 2.2.3.I.
As described in the introduction to the previous chapter, the success coach
mentality is becoming an increasing problem. Nearly every respondent (90%+)
24
has already heard of different success coaches. Quality problems arise from the
mentality that says "work less - take more money". Through this mentality, gig
workers can try to take shortcuts or they take more money which makes clients
think they are professionals. This misconception can also disrupt quality by the
time factor.
Solution approach eliminate the weaknesses
- The tasks of platforms should be, in relation to success coaches, a purposeful
clearing-up. Education can be through video messages with leaders with the
opposite opinion. Promoting this should be an intention of platforms. The expert
panel came to the conclusion that the comparison with similar gig's here has the
best results on a realistic pricing.
Strengthen communication skills (quality risk)
In the opinion of the interviewees, communication skills are almost not part of the
gig economy - the greatest weakness is seen here, which is only seen through the
clear communication of the contract for work, as described above.
III. Communication risk
In the survey, three main risks were identified as communication risks on the part
of the business owners. These are:
- Unclear platforms
- Relaxed settings of the gig workers regarding the use of pirate copies, publishing
of work on the profiles of the gig workers and no contract penalties in case of
termination
- Various cultural risks
Unclear platforms make communication with relevant gig-workers much more
difficult.
The often loose attitude of gig-workers is closely connected to the idea of the
noncommittal nature of the gig economy. This is favored by the absence of
contractual penalties. Thus the attitude of a possible termination goes along with
every communication.
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Cultural risks always entail a great communication risk. These risks are promoted
by the introduction of the often "second" language - English - on the platforms.
This increases the risk of misunderstandings.
Improve quality weaknesses (communication risk)
In terms of communication risks, pirated and stolen content is a problem which,
coupled with cultural attitudes (e.g. a culture of honour that allows lies), seems
difficult to solve.
The partly unrealistic evaluations or the lack of evaluations for cancellations
increase the communication risk because gig-workers are even more difficult to
assess..
Solution approach Improve weaknesses
- Honest answers that are true to their own quality are often very difficult to obtain
due to cultural differences. Here there is the possibility of test files and the demand
on platforms that such violations are strictly punished. The communication of the
contract for work should serve as a benchmark here, which also works.
- Stolen content in profiles (pictures and videos in showreels) must also be strictly
punished as an appeal to platforms (e.g. also with a fine coupled to the
name/email/IP address)
Figure 12: Picture shows a showreel and no violations known to the author
26
- Terminations must be continuously recorded in algorithms to get a clear picture
of the reliability of the gig-worker.
Quality strengths (communication risk)
A big offer on a platform always means a high degree of awareness of a platform.
If we look at the model of the market which describes the early adapters and other
groups, it means that we are far beyond this phase with a big offer. The "Early
Adapters are often the nerds and underdogs on platforms who love what they do
and therefore were looking for a platform. Rather show humans those see - " there
is something to get here" ....... Although these people increase the offer, the risk
increases with the less qualified spreading to platforms.
Approach Developing strengths
ā¢ A long active involvement on deck should be appreciated just as quickly.
This always indicates a certain persistence. Furthermore, an approach here would
be to introduce a graphic of activities. This could show completed orders over time.
It should also be considered that nerds can still be active on platforms that are
only able to become active on platforms after they have reached the age of
majority or when a normal job is interrupted. Conclusions can be drawn here - in
relation to nerds who are hit by the loss of a regular job - for example crises.
Financial weaknesses (communication risks)
A loose attitude of GW has the practical consequence that renegotiations are "no
barrier".
Loose attitudes also favour considerations of a termination of a project or
subproject.
Likewise, loose attitudes - resulting from a lack of penalties - are the reason for
partially exhausting deadlines for rework on a project. The frequency of
rectifications can also be exploited here.
Solution approach - improve weaknesses
- Renegotiations and cancellations must be punished
- legal rectification times must be limited to prevent exploitation.
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Financial strengths (communication risks)
Cheap prices are dangerous if you add up your personal working hours.
Communication risks can be greater than the benefit of the gig-worker because of
the time spent.
The work contract model should continue to be strongly communicated.
Build on the strengths of the solution approach
ā¢ Here is a CRM that archives the gig-worker activities and quickly shows
which gig-worker really understands orders.
Communication weaknesses (communication risks)
Language and cultural risks could be mitigated by an interview as described in...
The lack of commitment can often lead to an abort if a project becomes too
complicated for the gig workers, especially afterwards. This lack of commitment
can also be a reason for time loss, as gig workers who recognize language barriers
or the complexity of a project may not respond without canceling.
Approach Improve weaknesses
- Additionally, platforms could provide a culture wiki. General hints or cumulative
experiences of users with certain cultures (e.g. sorted by country) could help to
make a better decision.
Communication strengths
As already mentioned in previous chapters and sections, communication
strengths are not among the strengths of the Gig Economy.
2.2.4 Opportunities
I. Financial Opportunities
Replacing departments can have far-reaching positive effects on the company. In
summary, the responses to the survey can also be summarized under this point:
ā¢ Cheaper productions in the future
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ā¢ Economic Action
ā¢ Permanent savings potential
ā¢ Replacing departments
ā¢ Favorable opportunities to develop a market
ā¢ New markets for recruits
- Acting economically
- Permanent savings potential
- Replace departments
- Favourable chances to develop a market
- New markets for recruits
The reason for the summary is that the above points are a result of replacing
departments.
Cheaper productions are possible by gig-workers due to numerous
circumstances. For example, the salary of a qualified IT expert, for example in
Pakistan, is only between 700-1200 dollars. In Germany, freelancers quickly earn
more than 100 Euro per hour - that's approximately 16.000 Euro per month.
Economic growth of the respective country must always be taken into account in
the planning.
Economic action means achieving the best possible result with the available
means. Especially this point is very interesting for the Gig-Economy. In the Gig-
Economy, the remuneration is only paid upon success (based on the German
contract for work according to Ā§631 BGB). Thus, a client pays only when he is
satisfied. This results in a nearly perfect planning for projects/processes.
Permanent savings potential - Especially when gig workers are known or proven,
but also through the growth of platforms, the chance to get a permanent savings
potential increases.
Replacement of whole departments - the areas of the Gig-Economy explored in
the introduction of this thesis represent a large part of possible departments in
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companies. This results in an outsourcing of whole departments which can be
outsourced all over the world. This does not only result in cost advantages which
are associated with work contracts and quasi without the danger of bogus self-
employed persons, but also to reach skilled workers for reaching a new market.
For example the profession of a manager of a Facebook page can be found
without problems on Gig-Worker platforms. Through these advantages, markets
can be opened up at low cost.
The Gig-Worker model even indirectly encourages the use of the platform for
hiring on some platforms. This also creates opportunities to get permanent
employees - on a pure project level and without ties. Since most gig workers live
from job to job, there is a long-term chance to get a secure cooperation through
work contracts.
Quality - weaknesses (financial opportunities)
In order to prevent poor quality that consumes time and money and can lead to
consequential damage, there are not many possibilities than to test gig workers
due to the large offer on the market.
Quality can not be determined by showreels because content can be copied.
Similarly, orders can be created with pirate copies - or even ideas were copied or
directly stolen for the order (e.g. stock picture pages).
Quality cannot be measured by ratings because on platforms like fiverr.com there
are several possibilities to fake them. The fastest and easiest way is the $5 gigs.
Even if a provider (gig-worker) never sells $5 gigs because it is a time consuming
product, it is possible to create a $5 gig. Friends, relatives, etc. of the gig-worker
can quickly rate the gig-worker for $5 - 80% of which the gig-worker gets. (BS-9)
Solution approach - improve weaknesses
- The only way to deal with the point of quality through non-real profiles, showreels
etc. is and remains that we rely on real people. People have to be introduced so
that the quality of the gig-workers can be better assessed. Experiences with gig
workers should be documented continuously. This can be done with CRM systems
or with a documentation according to your own guidelines. Possible guidelines
are:
30
o punctuality
o Requirements fulfilled
o Communication
o Ability to put yourself in the project
For the sake of clarity, scales could be used here.
- Direct violations of the copyright law (regardless of whether it is not personal
content in profiles or pirated copies) must be punished directly by platforms. The
importance of copyright must be communicated on the platforms. All work of third
parties must be subject to these regulations and not only registered or well-known
features.
There should be a reporting function and a notice to communicate to clients that
infringements should be reported.
A bench partner here would be Google or Twitter and Facebook, which specifically
target fake news during the corona pandemic.
- Statistics could emerge from ratings that show which price categories of the gigs
ratings were composed of. A $ 100 gig costs around $ 20 dollars, so fakes make
less sense here.
Quality - strengths (financial opportunities)
A large supply (BS3) is an essential part of finding suitable workers. The smaller
the supply, the more limited the possibilities. Here it is important to note that a
Business Owner can use not only one platform. Especially in the current fast
moving time it is important to pay attention to new developments. Also a possible
migration of platforms can be observed.
The flexibility (BS2) (flexibility speaks here of the possibility of quick order
placement) is a significant additional advantage of the gig-workers. However,
there may also be restrictions in certain areas. These areas have to be identified
in order to avoid unpleasant surprises. An example for this is the IT-industry with
regard to popular languages (e.g.: C++). Here it is often difficult to find
programmers who do a good job.
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Solution approach - building on strengths
- Google and the already used gig worker platforms have to be searched regularly
to find new gig workers as soon as possible (as described in 2.2.3.I)
- For flexibility - platforms could introduce a traffic light system that describes the
workload of individual industries. This has advantages for the client, because the
system quickly recognizes how busy the workload is and thus saves time when a
cancellation is made. Likewise, an industry-specific traffic light system could
provide a USP for platform operators.
Cost/time - weaknesses Improve (financial opportunities)
Loss of time is a big problem especially in the western world. Here the tolerance
for orders and rework times are a big problem
Approach to improve weaknesses
- Project deadlines have to be met to the minute - one solution would be to penalize
the client by paying a percentage of the project costs back to the client
- Make time for rectification transparent - a project submission by the gig-worker
from which there is no doubt that the submission only took place in order to meet
the time schedule must be punished.
- Also the possibility of a request after a longer period of time has to be
communicated clearly. So also directly and as a checklist before the assignment
of a gig for example "I have taken note that a gig-worker may ask me for an
extension of the time".
To avoid the exploitation of this point there should be a limitation that for example
no extension of time is allowed to be made 24 hours before the gig is given.
Alternatively a milestone plan for each project could be requested. This can also
be developed as a software form and projects can be planned independently in
sections.
Costs and time - strengths develop (financial chances)
The price of a service is always a matter between supply and demand. If the
demand grows the price increases. If the supply increases, the price decreases.
32
If you look at the forecasts found in the introduction, it is to be assumed that the
fallow of the gig-workers is growing. This will lead to a growing supply of providers
(gig workers).
Due to the corona crisis, various companies are going bankrupt worldwide.
Especially many smaller companies that have no reserves will be taken off the
market. Here a decreasing demand can be predicted, which can be eliminated by
a new trend - the noncommittal and the desire of short bindings of MA.
The Corona crisis also leaves its mark on the gig economy. This will open up
opportunities by providing security to gig workers during this time.
Approach to solutions Developing strengths
- Due to the Corona crisis, a price increase is not in sight at the moment, as many
gig workers are currently complaining that they don't have enough orders. An
increase, which could develop for example through inflation in some countries,
can be found quickly by regular market observation.
- One way to save money in Corona times can be a kind of subscription ratio to
gig workers. In this relationship you can promise gig workers a fixed turnover for
a certain period of time which is lower than the individual order. This is about
exchanging security for lower prices.
Communication - weaknesses (financial chances)
In terms of communication, the biggest problem is that the order is not understood
properly - which can lead to a renegotiation afterwards.
Hidden costs can significantly disrupt the calculation.
Approach Weaknesses Improve
- With regard to the fact that the order is not correctly understood and it can come
afterwards to price increases help a clean and clear specification sheet.
It is important to include the note in the order description of these specifications.
If not all information should be noted directly in the order, the order description can
also contain the note "as discussed and specified in document XY - which is
available on this platform".
33
- Hidden costs can be researched in the gig description. The best thing would be
to prohibit this procedure to hide costs. Otherwise, clients must conduct their own
research during the planning phase. At least the platforms should communicate
clearly that there are price submenus, which is not the case so far.
Communication Strengths (Financial Opportunities)
The clear communication to gig-workers that the service is a contract for work -
thus a work which is the basis of success - is a clear advantage offered by
platforms which also justifies their fees.
Approach to solutions Developing strengths
- In order to further expand this advantage or to leave it as it is, clear
communication to gig workers - that orders are contracts for work - is still
necessary.
At the expense that more gig workers come to a platform to increase the superficial
attractiveness of the platform because many gig workers are represented on the
platform, weakening this communication can be the end of a platform. Clear rules
that are communicated unambiguously are essential for the success of a gig-
worker platform.
II. Quality opportunity
Quality describes the congruence of expectations and demands on a finished
product.
Quote from Henry Ford: "The greatest enemy of quality is haste".
Even though this saying is more than 100 years old and thus comes from another
time, it is more topical than ever.
In times of rapid change, it is more and more important for companies to react
quickly.
Changes must be used and offer less and less time for research and development.
If you take the current Corona crisis as an example, you will find various examples
where quick action has brought a lot of money. Some examples are here:
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- Security Service
- Mask production
- Disinfectants
But sometimes the chances were gone as fast as they came. Security services in
Germany, for example, were gone again after a few weeks because there was no
longer any obligation to monitor compliance with the rules.
Considering the fact that processes would have to be anchored in the company
through change management, the time for this would be over again.
Normally the Change Management itself always needs time to reach the
new/desired state.
In terms of the ability to react quickly to changes, the Gig Economy turns out to be
a real game changer in the context of this research.
Requirements for the implementation of quality opportunities - improving
weaknesses and developing/using strengths.
Quality weaknesses (quality opportunity)
Again, profiles and ratings that do not correspond to reality are a great risk
because precious time is lost.
It should also be considered that there are also times that cannot be shortened by
gig workers, such as printing processes or other prototyping processes.
Solution approach - Improve weaknesses
- If a fast, high-quality solution for any problem is required, the "normal" gig
economy reaches its limits. Here is the only relatively safe way to rely on known
gig workers who are for example recorded in a CRM. To rely on new gig-workers
brings with it various risks when it comes to high quality in a short time.
- If time buffers - which are indispensable in the gig economy - cannot be kept,
you should get away from unknown gig workers.
35
Expand quality strengths (quality opportunity)
The flexibility of the gig-workers themselves represents the greatest potential in
terms of reacting quickly to an opportunity. This is due to the following. Gig-
Workers work from job to job as described in the introduction. This is a big
difference to conventional workers.
For the gig worker it is normal to work into a new topic.
This creates - especially for underdogs or nerds - the chance that the gig-workers
themselves think along with the project and also bring in their own new and
important ideas that help to make the project even better.
Approach - Expanding strengths
- According to the opinion of the expert panel for researching the contents of this
thesis, the solution is that the flexibility of gig-workers is given by nature.
The solution to build on these strengths is to promote the person who is in charge
of the project management for the job creation.
Here it is about quickly formulating a project description, not to forget anything and
to deal with the project in depth and prepare optimally as a project manager.
For the managing director of a company, this means that if he delegates this point
to an employee, he makes sure that the project manager himself is extremely
flexible and a fast thinking person. Conservative views usually have no room here.
Improve cost weaknesses (quality opportunity)
The time pressure, which is very important for quality, can become a lever for the
gig-workers to encourage renegotiation.
Likewise, abort risks and possible unplanned rework times pose a great risk for
quality.
Solution approach - Improve weaknesses
- In addition to the already mentioned focus on well-known gig workers, the
solution is to address an appeal to the gig worker platforms.
36
This appeal includes the request to sort gig workers according to cancellations
and to display cancelled projects in relation to completed projects.
- It also has to be obvious which gig workers have renegotiated their contracts -
without the client's request for subsequent changes.
This also means that a price increase on the part of the gig-worker can be more
justified if there are subsequent change requests.
However, if this is not the case and prices were only increased subsequently from
the point of view of the gig-worker, this appeal follows the view that such gig
workers should be marked.
Cost Strengths (Quality Opportunity)
By the partly very favorable prices for example on Fiverr.com - also good quality
can be converted well and promptly. The contract for work and services model
also protects the client, as payment is only made if the project is successful.
Solution approach - building on strengths
- Even with new unknown gig-workers it is possible to increase the quality of your
own products.
It is always important to schedule time buffers.
Optimal is also the recommendation to set milestones and to document every
progress.
- Due to the low prices on gig-worker platforms two completely different gig-
workers can be used for the same project description.
This way you always have a comparison and different approaches to solutions.
Also the risk of time loss is minimized because two parallel Gig-Workers halve the
risk of abort or delay and twice as much progress in projects can be documented.
Of course, more than two gig-workers can run against each other as needed -
without the knowledge of the other or in form of a contest in which the winner gets
a tip ("tip" on platforms).
37
Improve communication weaknesses (quality chance)
Hidden costs can influence quality because quality and costs are inseparably
linked.
The selection of a gig-worker is always associated with certain individual costs. If
there are hidden costs behind a gig, a completely wrong impression can be
created.
The term "outstanding quality" is usually defined differently for Europeans than for
people from second or third world countries. The point here is to write the
requirements in a culturally uniform way.
This point also takes into account that the language barriers - often neither gig
workers nor gig worker project managers have English as their mother tongue -
can cause misunderstandings.
In the communication weaknesses it should also be considered that answers from
gig workers can take longer.
Solution approach - improve weaknesses
- Costs should not be hidden on platforms, as in previous chapters
- The points of excellence and language barriers that have been researched can
be described in detail in a specification sheet and reproduced in the form of a
requirements specification.
- For the communication a communication plan can be agreed upon and a regular
communication with the gig-worker can be arranged. This can also be very
important for the Gig-Worker CRM in order to better assess the gig-worker and
keep the client informed about progress.
Strengthen communication strengths (quality chance)
The interviewees did not make any direct statements in the interviews with regard
to communication strengths.
The point of communication is rather seen as a weakness in the gig economy. In
the context of the expert round however the communication strength was found
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that the platforms created it usually each Gig Worker understands that he is paid
only if the order is "taken off" and that he goes out otherwise empty.
Here the expert panel took advantage of feedback from participants of the survey
who stated that gig workers often ask their clients to accept a project - with the
promise that they will continue with the project afterwards.
This promise is often broken.
Approach - Expanding strengths
- Here is an appeal to platforms to prohibit this method. Questions about
premature acceptance must be at least as prohibited as the prohibition of contact
outside the platform at Fivverr.com. The interviewees and the group of experts
came to the conclusion that this "please accept now" is one of the biggest dangers
in the gig economy.
III. Communication opportunity
Underdogs or nerds can be found on various platforms, which is a strong
advantage of the gig economy. The Maslow pyramid is also to be considered here,
which puts self-realization at the top.
Figure 13
39
Because of this desire for self-realization, real nerds and/or underdogs can be
found on the platforms who choose this freer working model because of their own
self-determination. If these underdogs/nerds are identified, highly qualified experts
can be won for a very reasonable price.
Improve quality weaknesses (communication opportunity)
Detecting underdogs or nerds encounters various obstacles on platforms. The
main reason for this are the fake profiles already mentioned in this work which are
adorned with other people's work.
Approach - improve weaknesses
- The solution approach can be found here, as mentioned in 2.2.3.1, in a regular
search of platforms and in an own gig-worker CRM to recognize underdogs and
nerds and to bind them to the company as well as possible.
Expand quality strengths (communication opportunity)
Due to the large and growing offer on gig-worker platforms, the chance of finding
nerds and underdogs is also increasing.
Solution approach Developing strengths
- Here a continuous, regular search using showreels helps. Also a network can
help in which friendly or cooperating companies give tips about underdogs and
nerds.
Financial weaknesses (communication opportunities)
Especially nerds live for projects or in other words for making thoughts and plans
visible. A nerd is often not only interested in money. Therefore, the risk of a nerd
or underdog dropping out of a project can also increase if he no longer sees
himself in the project.
Solution approach - Improve weaknesses
- In the western world, skilled workers receive extensive support. Here there are
mentoring systems, coaching or supervision, for example. A mistake often made
by clients that they think that a gig-worker is replaceable.
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Fact is that everyone is unique - whether he or she has chosen a way into the gig
economy or not. In order to keep nerds and underdogs, the group of experts of
this paper therefore appeals for a similar value as for highly qualified specialists
in the company. Practical approaches are psychological aspects such as, for
example, the consideration of the 4-ears model by Schulz von Thun. The 4-Ears-
Model detects misunderstandings which can lead to a protection against migration
of gig-workers.
- If the communication, especially in small companies, without for example
industrial psychologists, should find a state, it is important to pay attention to an
active appreciative culture. Appreciation does not mean that quality is valued at
the expense of quality. A possibility of the appreciation is usually always a tip (tip).
Here the appeal of the expert group is the introduction of intermediate tips that
allow the possibility of a bonus payment - even without the project being finished.
This could be optimally combined with a milestone system. Participation in
milestone plans can be optional and can be provided with the tip recommendation
as an incentive. Even the mere participation in the milestone program can already
be remunerated extra by the client. A simple check mark can be sufficient for this.
Financial Strengths (Communication Opportunities)
Except in the case of a change in the legal situation in the platform operator's
country of origin (e.g. Israel for Fivverr.com), the work contract model is the best
solution for clients and a clear financial strength in terms of the chance to find
nerds and underdogs on platforms.
Solution approach - Expanding strengths
- To ensure that this approach continues to prove its worth, good treatment - and
not exploitation - of gig workers is essential. Appreciation must be lived here so
that gig workers do not migrate.
Communication weaknesses (communication opportunities)
Also in relation to nerds and underdogs, the point explored in the survey is that
language barriers and cultural background can cause problems.
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The next point is the lack of understanding of the needs of the client's country of
origin. This can also lead to a sub-optimal solution despite working with real
underdogs.
Approach - Improve weaknesses
- For linguistic and cultural differences, video interviews can help gig workers to
better assess their skills. More about this can be found in 2.2.3.1
- To familiarize with the interests of the target group from the client's country of
origin is an enormous expenditure of time. This has to be paid for or, in the opinion
of the expert group, it is a better solution. There should be a checkbox that allows
to create a CG analysis. These creators could also be found via the platform. Of
course, a detailed analysis can also simply be attached to the order. It should be
noted that this could also appear in the project description as an obligatory point.
Strengthen communication strengths (communication opportunities)
From the respondents' point of view, communication strengths are not present in
relation to nerds as a strength. Communication strengths could be developed by
platform operators which can be derived from this work.
Approach - Developing strengths
- A possible communication strength could be a kind of project configurator that
helps to describe a product/service in such a way that all relevant factors are
considered. Platforms offer the advantage that gigs are categorized. So for each
main category a configurator could be set up that shows which elements are
basically important.
2.2.5 Opportunities from the Perspective of Gig Workers
I. Financial Risks
The financial risks that gig workers are exposed to are always the biggest risk -
even if a gig worker is a skilled worker who would also have a good income in a
"normal" employment relationship.
Reasons for the "normality" of this problem are known to small and large western
agencies. Taking advantage of "creative people", stealing ideas or asking for
42
information without the intention of placing an order is a common feature of the
creative industry.
With more gig workers on platforms and the growth of the providers, there is also
the danger of losing customers or even getting fewer customers. In the long run
there could also be a risk that platforms like Amazon introduce similar models
where you have to buy your way up (Amazon allows you to "buy your way up" your
own project in the Amazon Marketing Service ranking).
If the dissatisfaction of gig-clients continues to grow, this can also lead to wrong
conclusions of the platform operators. Wrong conclusions could, for example,
influence the right to rectification. If this right of rectification includes a lower
bargaining power of the gig workers, the risk for gig workers increases
disproportionately.
Beside this time or money losses, there can also be liquidity risks for gig workers.
This liquidity risk can be strongly influenced by two factors.
1. one - which is already important - is based on the fact that even for larger
projects the payment is only made 14 days after completion (at Fiverr). If a project
has a 30 day duration (for example a book production) in addition to the 14 day
payment, a bottleneck can occur especially if the customer wants to make
improvements.
The second factor risk is that platforms could lock up gig workers while a certain
number of projects are in recession. This would be a sensible consequence for
the client but can also endanger the liquidity of the gig-workers.
Quality - weaknesses (financial risks)
Weaknesses in quality, which have a direct impact on financial risks, are
accompanied by the risks associated with the inability to assess the client.
Solution approach - Improve weaknesses
- The approach to the solution can be found in the interviews mentioned in 2.2.3.I.
From the point of view of the gig-workers it is important that also clients make such
interviews so that they are better assessable.
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Quality - strengths (financial risks)
Varied riding does not always mean doing the same activity. The risk that comes
with it is always to get involved with new clients - with every client the risk of
financial losses increases. By taking advantage or other reasons for breaking off
on the part of the client.
Approach - Expanding strengths
- Also here the expert group refers to the interview solution
- A further approach is also the possibility to evaluate the clients of platforms. Here
you can find out about abort rates, requests for improvements, etc. This would be
comparable with the employer brand used in the industry. This means that clients
can get better gig workers because of their good reputation - which is confirmed
by the platform. To promote this, there is also the possibility that certain gig
workers for example level 3 only accept clients with a strong rating.
Cost/time - improve weaknesses (financial chances)
In order to counter the financial risk of the gig workers, the aim here is to split the
risks.
Liquidity bottlenecks are very obvious due to the work contract model but also the
late payment by platforms.
Finding a solution is very important because the survey has shown that especially
nerds and underdogs who do long-term projects (20 days +) have real problems
with the payout rhythm of the platforms. The result of this is the search for new
platforms or also the search for fixed settings. This leads to a brain drain from
platforms to increase their own security. If the security is not given we see in the
pyramid of needs that there is no self-realization.
Maslow's pyramid of needs is a pyramid that builds up. If the underlying levels are
not maintained or consolidated, the following levels are no longer relevant.
Solution approach - improve weaknesses
- On the one hand there is the approach of a design fee.
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- On the other hand there should be a milestone planning, especially for larger
projects.
In order not to be to the detriment of the clients, which would lead to a migration
of clients, this would have to have a sensible division that allows work to continue
at any point.
The milestone planning can optionally work with down payments or advances.
A down payment of 20% - which only has to be paid back in case of gross
violations - would be very reasonable. This model should also not be possible for
newcomers. Here it is about satisfying underdogs and nerds in an optimal way to
prevent a migration of platforms.
Cost/time - strengths (financial risks)
The independent life in time and space, which makes the gig economy possible
and creates space for free living, requires more security.
Solution approach - building on strengths
- The solution here, as described in the previous chapter, would be to set up a
milestone payment including a 20% down payment. The down payment must be
communicated directly in the gig for large projects. Here it is important that the
gig-workers work with references or are verified by the platform so that the gig-
client knows that this fee is safe. Gross violations lead to the recovery of the
money.
- Alternative - to minimize the risk of platforms, the fee for gig workers could also
be increased to 25% (at Fiverr/ 15% at freelancer.com and others) The 5%
increase could then act as risk money/insurance.
So even if the customer is against a down payment model, this insurance could
be covered by the 5% fee.
It is important to choose a model that the customer accepts. If the customer goes
to other platforms, there is no need for hedging.
- It is also important to communicate about security. For example, it is helpful to
communicate about how unemployment insurance in western countries works.
45
This could then also lead to a voluntary 5% risk buffer - which is a kind of
"unemployment insurance" through platforms.
Communication - Weaknesses Improve (Financial Risks)
There are also known approaches to improve the weaknesses
- A proper project description. A proper project description requires industry and
professional knowledge. There is no standard configurator that can be used here.
However, gig-worker platforms could write examples for the individual fields of
activity.
- Video interviews to get a picture as already described in 2.2.3.1
- A binding communication plan that has already been mentioned to set meetings
as binding and to sanction them if necessary
Breaking the power of customer evaluation is also an important area to prevent
financial bottlenecks.
Here we refer to the already described solution approach which says that ratings
can be improved by platforms and independent committees.
Solution approach - weaknesses Improve
Text
Communication strengths (financial risks)
Since there is no researched communication strength, which could minimize the
financial risks, the expert group came to the decision to research further at this
point, since irreparable long-term damage can emerge in the gig economy through
communication strengths, which can destroy the entire industry.
Approaches - Developing strengths
The expert group has introduced a new term here that was not defined before this
work. With the Gig-Economy a new industry has emerged. This very young
industry offers thus, like all new industries, also new chances to trump by new
views.
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As found out in the interviews, communication is rather a weakness - gig workers
and clients agree on that. A new solution is needed to smooth out this weakness.
Mediators are known from business administration to mediate conflicts between
two or more groups. Mediators arbitrate and mediate so that a company, a
cooperation, or something similar runs more economically again. Mediators are
often specialized lawyers who charge a high hourly rate (usually starting at 200
Euro). The normal economy knows the benefits of this, however.
Also, for the new industry of the Gig-Economy an awareness of the importance of
communication and that the Gig-Economy is a complex industry in its own right
has to be created.
In the opinion of the expert round it is necessary to let such mediators develop.
These mediators who act as a link between gig-workers and clients are called
āGig-Worker-Managerā
The Gig-Worker Managers are industry experts who can accompany the project
description, gig-worker search as well as the entire project planning until
completion. With a gig-worker manager there is no more direct contact between
gig-workers and clients. The contact always goes through the intermediary.
These gig worker managers can be employed by companies or work freelance.
However, the expert group does not propose a contract for work but a contract of
service as a remuneration model.
The prerequisite for this new profession should be a talent for handling several
projects, a distinct ability to communicate is required. Linguistically, a gig-worker
manager must have strong skills in the English language. This job also requires a
basic understanding of the projects he is assigned to.
A gig-worker manager must be able to break down his projects into their
components.
II. Quality risk
Another major and growing risk area from the point of view of gig workers is the
so-called quality risk. The quality risk describes the fact that gig workers perceive
their own work as qualitative - i.e. good - or in contrast negative. It is about how
47
satisfied gig workers are with their work. Satisfied gig-workers are an important
part of the resources a platform has.
The survey identified two large and relevant quality risk areas.
1. the first is caused by oversupply on platforms. This increases the bargaining
power of the clients as the offers they receive are avoidably equally good.
2. another risk is the "zeitgeist", which often mistakenly suggests that the client
can do everything himself or can quickly acquire all knowledge. It can happen that
the client "fiddles around" with files which can influence the quality of the whole
project.
Improve quality weaknesses (quality risk)
To counteract the declining appreciation and to break - reduce - the negotiating
power of the clients, clients need to see more work/showreels of the gig workers.
However, this stands in contrast to the weakness of "contact prohibitions" outside
the platform.
Approach - improve weaknesses
- The weakness can be minimized by allowing platforms to make their own strict
but fair evaluation of gig workers and thus verify gig workers. This evaluation can
include an in-depth portfolio view through the platforms. The evaluation can be
done by other gig workers representing the platform, as described above.
Quality Strengthen strengths (quality risk)
The declining appreciation also finds parts of its origin in the strengths.
A relatively quick entry into the gig economy and the possibilities of change bring
risks with them. This simple entry can be risky for clients and endanger the
reputation of the platforms.
Solution approach - Expanding strengths
- Newcomers should be marked necessarily.
- Gig workers who work in different gig areas should be marked as well.
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- Expertise - i.e. gig workers who are true to their core competencies - should be
marked positively.
- It is recommended to introduce a graphic representation of how loyal a gig worker
is to his core industry.
Cost weaknesses (quality risk)
The negotiating power of the client and the work contract model are for many a
challenge to live a lack of appreciation.
Solution approach - Improve weaknesses
- A gig-worker manager would also be a possibility to eliminate this weakness.
Cost Strengths (Quality Risk)
Clients are usually aware that an entry into the industry is possible quickly and
without problems. Thus, an appreciation is not automatically given.
Solution approach - Strengths develop
- Here the evaluation of the platform or the assignment of different levels (currently
conditionally available) would be a possibility. The levels and their meaning and
prerequisites must be better communicated here, since none of the respondents
knew what was behind the individual levels.
- Gig-worker managers would serve as mediators who could also enable
motivated newcomers to enter the market. A recommendation of the expert groups
would be "deluxe" ratings by gig-worker managers that would be more important
than those of normal clients.
- It should also be considered that newcomers can also be people who do not want
to jump on the bandwagon of the gig economy because of their own initiative, but
because of their age. Here the expert round recommends a differentiated
designation as for example Newcomer (A) - A for preferentially treated (admits
from the ABC analysis in addition, as initial letter of the word age).
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Communication weaknesses (quality risk)
The customer's lack of understanding of the project, coupled with the will to
understand everything and have a say in the project - without being a real expert,
this is a dangerous weakness. Fiddling around with files can result in irreparable
damage to files. No matter if IT, CAD or graphics.
Solution approach - Improve weaknesses
- The source files should only be assigned at the end. The time of the handover
must be documented so that it cannot be a quality problem.
Strengthen communication strengths (regarding the quality opportunity)
- A gig-worker manager would increasingly ensure the appreciation of "his" gig-
workers and provide the arguments for this.
- A gig-worker manager would also take over the communication and a kind of
trustee job to prevent contractors from fiddling around.
III. Communication risk
The communication risk is always a problem, due to two parties who both often
speak the English language non-native. In addition, there is the cultural problem.
Cultural problems represent what is "normal" or self-evident for the respective
person - shaped by the culture. If someone has grown up in a western culture, he
has a different understanding of quality than someone who grew up in a second
or third world country.
Improve quality weaknesses (communication risk)
The weaknesses that have been researched here are the difficult assessment of
the client or of what he understands by "good quality", for example.
Solution approach - Improve weaknesses
- The solution is already described here, for example the interview which gives the
gig-worker a better assessment of the client.
- A second approach would be a quality evaluation or some kind of quality
algorithm. This would categorize clients by country and define a quality level
50
internally (e.g. Germany 10 of 10). This comparison could then be strict.
Indications could be orders already worked out. But also, the complexity of work
could be an indication that not every gig-worker can get every job or is warned.
Since the implementation of such an algorithm is more likely to be difficult, the
increased use of AI could also be helpful here. Because the AI learns which clients
(from the respective countries of origin) get along well with which gig-workers (also
from the respective countries of origin), the AI can make specific
recommendations.
- Another solution would be webinars on cultural backgrounds that make the gig
workers aware of these big differences in quality or even train them through
workshops. These workshops could also be created by gig-workers, for example
with a remuneration in the form of 0% fees for a period of time X.
Extend quality strengths (communication risk)
The communication risk in relation to quality requirements also has a risk potential
in the researched strengths. Especially the point of "gathering new experiences"
can quickly cause a - "I'll give it a try" - mentality. The problem here is that the gig-
worker has to try from the beginning to gain experience. This leads to the fact that
the idea of quality fades away very quickly when it is uncomfortable.
Solution Strengthen strengths
- The solution approach would be to identify newcomers from the operator side in
order to minimize this risk factor and to communicate the knowledge of this risk to
the client. Also a warning notice that could act as a popup would be helpful, for
example before the booking.
Improve financial weaknesses (communication risk)
As already described, financial risks are the biggest problem for gig workers. This
is of course also strongly given by communication risks. Misunderstandings or
false expectations can quickly lead to low hourly wages or even to a cancellation.
Solution approach - Improve weaknesses
- Due to the contract for work model, solutions are very limited. Interviews with the
client can help to get a better picture in advance.
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- A "design fee" could be an alternative. This could be an addition to the gig, for
example. Also possible would be a basic marking something like: "This gig
includes a design fee which is also due in case of refusal of acceptance".
So that this fee is not exploited, this fee should not be possible for newcomers.
Also there must be an arbitration board so that the exploitation is not possible.
Exploitation of this fee/option must be severely sanctioned,
Financial Strengths (Communication Risk)
The possibility of a relative good income is a strength of the gig economy. In terms
of communication risk and quality views, this point is an important factor. Just
success coaches destroy this point a large piece far and would see wrong view
and a destructive thought construct
Expanding the strengths of the solution approach
- A good income must always go hand in hand with high quality. Taking advantage
of clients is a major problem for the entire industry. Workshops, seminars and
webinars are an important approach to this. As a motivation for gig workers there
could also be a special award for participation in such events. Also a kind of visual
sticker could be possible here. This would help to separate the wheat from the
chaff.
Improve communication weaknesses (communication risk)
These communication weaknesses have already been discussed in detail in this
paper.
Approach Improve weaknesses
- A proper project description.
- Video interviews to get a picture
- A binding communication plan
Develop communication strengths (communication risk)
Due to the lack of communication strength, a gig worker manager would be highly
recommended to minimize this risk and to ensure that the industry gains an
important communication strength.
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2.2.6 Opportunities for Gig Workers
I. Financial Opportunities
The financial chance to get a steady income through the gig economy and to live
independently from the respective country is the biggest prerequisite to work in
this industry of gig workers.
Many gig workers also expect their income to increase slowly but surely.
Many gig-workers also see a chance to change their status with banks etc. so that
loans for house building and Co. are also possible. Also a goal of many gig
workers is of course a high time utilization.
Surprisingly few of the gig workers (around 40%) have suffered large financial
losses due to cancellations by the clients but many see a growing danger. Due to
the growing popularity of the gig ec, gig workers are hoping for fairer payment
models (e.g. demolition fees or surcharges for later requests).
Quality - weaknesses (financial chances)
In order to turn financial opportunities into reality, it is necessary to improve the
weaknesses. As a quality factor on the part of the gig workers, the client is
decisive. Here his "quality" has to be estimated to get as few problems as possible
to get a secure order.
A weak point is the lack of evaluation of the client.
Also outside of platforms one must not look for them (contact ban by many
platforms).
Solution - Improve weaknesses
- A clear client evaluation is an important appeal to gig-worker platforms.
- Also a kind of portfolio of clients would be an important tool for gig workers to
better assess the new client. In the best case, the number of completed jobs
(personal data can simply be blacked out) would also be the number of rectification
requests with appearance.
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Quality - Strengths (financial chances)
A strong and growing customer base increases the demand and is therefore a
conduit for financial opportunities.
Also, the fact that international work can easily be done through platforms is an
important factor in achieving financial independence. Through these factors,
arguments like "country of origin" are strongly invalidated and one's own skills are
strongly promoted.
Approach - Building on strengths
- Gig workers who hope to make a living from the platforms are dependent on
demand. Here is also a marking recommended by sides of the platform of people
who earn large % of their income on platforms. Gig-Workers who only sign up to
earn some extra money from time to time should be marked accordingly. This
would also not be a devaluation, but only a marking. For companies that book gig
workers it is important to work with people who are willing to invest a lot of time in
projects. For B2C (Business to Customer) businesses like for example the
invitation card to a wedding, clients will already be willing to go to hobby gig-
workers.
Cost/time - weaknesses improve (financial opportunities)
Project cancellations offer a loss of time and money.
This possibility of aborting projects is supported on the part of the client by his
power that radiates onto the platforms. The clients are the actual customers of the
platforms - they have to be satisfied by the platforms.
As already mentioned, there was no gig-worker in the survey who never had to do
any rework. Here is the danger that a full capacity utilization was not possible
during these periods, which has a negative effect on the financial opportunities.
Approach Weaknesses Improve
- In the case of aborts, the reasons must be sought more strongly. Here it should
be clearly communicated that there are arbitration boards or if these do not exist
on platforms, they must be set up. Here again the evaluation of the client comes
54
into play. The client evaluation offers the gig workers a clear picture of the abort
rate of the client.
- The power of the gig-workers has to be known to the platforms. Since a kind of
"union" would be extremely difficult to achieve, the only thing left for the gig
workers to do is to scan the market regularly and to log on to other platforms if
necessary. With regard to the hobby gig-worker labeling, data from other platforms
can also be taken over which shows that a lot of gig-workers work in the gig-e.
- Rework must be clearly marked. It is important that the platforms communicate
even more clearly with their clients so that any subsequent request costs money
and automatically ends with an offer.
Expand cost and time strengths (financial opportunities)
A strength of the gig economy is that a good income is possible. Especially for 2nd
and 3rd world countries the Gig-Economy can or is a real game changer.
Solution approach - expand strengths
- To keep it that way, more advertising for the Gig-Ecomomy is important. Since
about 2019 Fiverr is also investing more in advertising, for example in YouTube
videos. Advertising has to be further increased as the potential of the gig economy
is far from exhausted. Here PR would be a good platform option. Regional offices
of platform operators could also help to create a basis for this. The branch office
could include some kind of consulting for gig clients or a clear gig-worker
management or gig-worker management consulting.
Communication - weaknesses (financial opportunities)
Communicative weaknesses, in terms of financial opportunities from the point of
view of the gig-workers, are due to the fact that too little information is given for a
project. Often the overall picture is only revealed to the gig-workers much later.
This leads to the fact that the time required is usually underestimated. Reasons
for this are often the pure uncertainty of the client about the project.
The second biggest problem from the gig-worker's point of view is the lack of
communication, which costs money to improve the project.
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Language barriers are not only noticeable for gig workers but also for clients. All
interviewed gig-workers already had customers who spoke worse English than the
customers themselves, which often led to misunderstandings.
Slow response rates or even inadequate answers to questions posed to the clients
pose a time risk and are therefore in direct contrast to financial opportunities.
Approach - Weaknesses Improve
- For too few project details, the solution approach, as described in 2.2.5.1., can
be found in the form of a proper project description that is optimally provided by
the platforms as a blueprint.
- The unsatisfactory communication, which change requests by the client those
afterwards developing money cost, were already mentioned in this work and are
considered from itself the group of experts as enormously important around Gig
Worker a feeling of the appreciation to give. The Gig-Economy is a model which
only works with gig workers and clients. This must always be considered.
- Response rates have to be agreed and sanctioned. Not only for gig-workers but
also for clients. A gig-economy which is only based on the back of the gig-workers
cannot last.
- Interview videos about the language barriers should also be visible here. This
way the gig workers can get a clear picture of their clients.
Communication Strengths Financial Opportunities)
This survey did not find any strengths in communication in relation to the clients.
Solution approach Developing strengths
- The ordinary project description described in 2.2.5.I would be a solution
approach.
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II. Quality opportunity
The quality opportunity from the point of view of gig workers is a diversified working
life which, in combination with the financial opportunities, brings security and
fulfilment of purpose.
Quality weaknesses (quality chance)
To ensure a fulfilling working life on gig platforms, the right clients are the key
factor.
Solution approach -Improve weaknesses
- In order to be able to assess the clients better, we refer to the video interviews
and detailed profiles.
Quality Strengths (Quality Opportunity)
The gig economy has strong quality of life opportunities for its workers.
The Gig-Economy practically stands for working independent of time and space,
the space for free living and diversified work as international projects which are
constantly being expanded by new ones are the daily routine of the Gig-Economy.
The strength of the strong customer base is expandable here. Even if they are
already well known, this strength is absolutely expandable.
Solution approach - Expanding strengths
- Winning new customers in the gig economy is essential for strong growth in the
industry.
Here are possibilities the circuit of advertisement in addition, as in chapter
described regional address around also PR possibilities regionally to open up. A
further possibility would be gig worker agencies which could also take over the
management of the gig workers. Agencies could advertise for the gig economy
themselves.
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Cost weaknesses (quality opportunity)
The weaknesses associated with cost and time loss are also a threat to the quality
opportunity.
The Gig-Economy can only guarantee a secure diversified work if there is more
security for gig workers and not only on their loads.
Solution approach - -improve weaknesses
- video interviews
- Meaningful profiles
- Clear communication that improvements cost money
Cost strengths (quality opportunity)
A good income is possible in the gig economy because it is not about the country
of origin of the gig workers. The Gig-Economy even creates, despite the partially
dumping prices compared to western providers, a balance in terms of payment.
The entry into the Gig-Economy is easy and requires only an Internet-enabled
device plus the device with which the virtual DL is provided.
Approach - Expanding strengths
- The pricing model, which is not determined by country, should definitely be
retained. This creates opportunities for an international wage balance.
- Software that is used to provide services is often pirated. The reason for this is
the sometimes high acquisition costs for software or high costs for subscriptions
(e.g. Adobe or Autodesk). Here an appeal to manufacturers would be to agree on
an order placement model. This way, gig workers can produce safely and clients
can get files from current software versions, the manufacturers would have more
profit than from pirate copies. Gig platforms could act as intermediaries or trustees,
which offers another advantage and also allows direct cooperation with agencies
or universities.
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Communication weaknesses (quality opportunity)
Subsequent requests for improvement and bad project descriptions are a strong
weakness that also disturbs the chance of a varied life.
The lack of understanding of clients, which 100% of gig workers see as a major
risk factor for working on platforms, can be counteracted.
Solution - Improve weaknesses
- If clients have no understanding, they can hire gig worker managers. More about
this in chapter 2.2.5.1.
Communication Strengths (Quality Chance)
Since the interviewed gig workers did not identify any communication strengths, a
middleman - a gig worker manager - would be an important option to improve
quality opportunities in the gig economy for both gig workers and client.
III. Communication opportunity
The interviewed gig workers see a chance that better communication rules are
formulated from platforms to improve the communication with each other on the
platforms and thus open a communication opportunity. Especially on Fiverr,
communication is a real problem from the point of view of the respondents.
Communication is a key factor in various industries. By developing this
opportunity, the industry can experience strong growth.
Weaknesses in quality (communication opportunity)
With regard to the weaknesses of clients - and thus their poor assessment
possibilities - various approaches are available in the form of interviews and
profiles
In order to counteract quality weaknesses in the long term, the emergence of the
new profession of the gig worker manager can be decisive.
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Solution approach - Improve weaknesses
- Gig worker managers can improve communication. Prerequisite n for this is their
emergence and their tolerance. There are different possibilities for tolerance.
- An agency that shows different work will increase the acceptance of clients. A
strong network which is committed to the gig-worker manager can also lead to an
acceptance of gig-worker sites.
- Gig-Worker managers can not only be created as an own agency regionally and
online but also on platforms in an own section. Here an introduction is crucial and
also a clear definition when you need it. New areas always require extensive
communication - so this new industry.
Quality strengths (communication opportunity)
International work is a quality strength that plays a major role in achieving
communication opportunities.
Gathering experience is an important prerequisite for correct communication,
since unknown and un-experienced things are difficult to communicate.
Solution approach - building on strengths
- The solution for communication Opportunity of working internationally could be,
for example, the targeted teaching of Business English courses or a cooperation
of platforms such as Fiverr and Udemy.
In the long term, there could also be a small language test on platforms to improve
communication and thus create regulations
- Gathering experience is important, but it also creates risks for clients and can
therefore - if inexperienced gig workers are not working and completing projects
poorly - ruin various communication opportunities.
One approach here would be to label newcomers within the scope of the possible
communication regulations and possibly demand a reduced rate. This minimizes
the risk for clients but also offers the opportunity for newcomers to win customers
at an attractive price.
60
Financial weaknesses (communication opportunities)
Communication regulations can be a sustainable game-changer in the gig-
economy, where interruptions and their prerequisites, subsequent requests and
conditions for work contracts are clearly communicated.
Solution approach - Improve weaknesses
- Communication regulations must be clearly communicated, be binding and
compliance must be monitored through sanctions.
Strengthen financial strengths (communication opportunities)
Communication rules are there to realize expectations or to resolve them through
approaches. Problems usually arise from different / partly unrealistic expectations.
So also with the income. The income must always reflect an equivalent value in
work.
Solution approach - building on strengths
- To make communication opportunities a reality, it is important to communicate
the strength of the relatively high income clearly in terms of performance. This also
includes marking newcomers.
Communication weaknesses (communication opportunities)
Communication rules can be very helpful to overcome communication
weaknesses. The proper project description described in chapter 2.2.5.1 could, by
means of regulations, become binding. Also the interviews, portfolios for
assessment can become a binding model.
The power of the customers by evaluations could be revised in the context of
communication regulations as well.
Solution approach - improve weaknesses
- Communication regulations offer various possibilities for binding improvement.
Especially with platforms that also offer small gigs, like Fiverr, a whole new
potential can arise.
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- Evaluation should be contestable. There would have to be a committee that limits
the power of the ratings and this can be improved afterwards should clear
injustices be seen. However, the time spent would inevitably have to be
remunerated. This committee can also be composed of gig workers so that the
platform employees do not have to do this. The gig-workers could get a monetary
consideration or an exemption of the % fees for a certain period of time. A simple
algorithm could send the requests which is then at least geographically separated
on the two disagreed parties.
Communication strengths (communication opportunities)
Gig-Worker Managers who spend the whole day dealing with the topics of the Gig-
Economy will usually have no problem with various communication regulations as
this will be their daily routine and especially this target group knows how important
clear communication is.
2.3 Findings and Results
2.3.1 Introduction
The biggest problem in the digital world is that people do not know each other.
Therefore, according to the findings of this work, one must clearly invest in
communication. It must, also digitally, the possibility be created, to estimate the
opposite correctly. For this purpose, the platforms that act as contact points must
create clear rules and also provide opportunities for extensive communication.
Gig-Ecomomy is a complex industry that covers various fields of activity and has
many millions of workers. Therefore it is important to note that every industry and
every market has its own challenges and rules. Before entering the gig-economy
it is therefore essential and elementary important to get familiar with the own risks.
The interviews and research on this work have shown that many people approach
the industry of the Gig-Economy with a strong euphoria. Gig-Workers see the fast
money and clients see the big saving potentials. After the first projects in the
industry, this euphoria has often faded.
62
The most important new insight of this work is the inevitable emergence of a new
profession that takes up a position or in larger companies whole departments - the
gig worker manager.
For all the solutions that have been researched and found, communication is the
key that can make the industry grow or die..
2.3.2 Summary of Gaps / Findings from this work
The gaps that this work has explored are as numerous and diverse as the industry
itself. A great responsibility lies with the platform that, through communication
regulations and the creation of further opportunities, has the greatest responsibility
in creating opportunities but also the greatest potential for profit.
I. Solution approaches from platforms
Communication Platform regulations to be communicated to gig-workers and
clients represent a significant and relatively quick approach to improving the
overall situation.
But also technically there are various points found in this work how the situation
can be improved - sustainably -.
Communication to Gig-Worker
- The use of pirate copies, all contents of third parties such as profiles of others,
stock images, etc. can lead to exclusion from the platform
- Terminations in higher levels can, after examination, lead to leaving a higher
level (level 2 gig worker is downgraded to level 1 if several terminations occur)
- Gig-Workers have to publish an interview in which questions of the platform have
to be answered by themselves
- Improvement times may not be used and can also lead to leaving a level or being
excluded from the platform
- No renegotiations without the client's request for improvement
63
Communication to clients
- Orders may not be accepted if they are not really done - but there is a possibility
of advance payment
- Improvement requests by clients are automatically associated with costs - one
possibility would be to create a checkbox which is clicked before each request
during a project "this request is not a new requirement".
- Clients have to publish an interview and an extensive profile in which questions
of the platform are answered by themselves
- Please use the report button if clients see that the work is supposed to be the
work of third parties or that it is pirated.
Development possibilities of the platforms to improve the situation
- Introduction of country wikis (for gig-workers) to better understand the countries
and culture of the clients
- Introduction of culture wikis (for clients) to better understand the gig-workers
- Introduction of expert panel by gig workers for arbitration, for example in case of
bad ratings
- Customer ratings must also be visible to every user of the platform.
- Education on success coaches by experts
- Showing comparative prices in order to be able to assess yourself realistically.
- Introduction of the possibility to split a project into milestones. This should be
possible automatically. Also here, sample processes for projects could be an
important instrument.
- Introduction of the possibility of binding communication plans. Obligatory for both
sides.
- Marking of newcomers and newcomers that occur due to their age
- Introduction of the possibility of between tips to support and motivate the gig-
worker
- Create the possibility of voluntary unemployment insurance
64
- Enable design fee to protect creative people
- Delete hidden price options
- Experts mark - as in the solution approaches researches best possible over the
function how many orders the person has completed in percent in the respective
field of expertise.
- Enable extensive evaluations (e.g. also for premium clients)
- Introduction and clearer communication of different levels of both gig workers
and clients
- Offer relevant webinars
- Publish examples of project descriptions for each field of activity as a Blueprint
In addition to these development opportunities, the platforms should urgently
make themselves aware that gig workers must also be valued more!
II. Solution approaches from the client side
- Appreciation of the Gig-Economy, for example through own CRM and regular
research
- Schedule time buffer
- curb the euphoria of making money fast and also search and read critical articles
III. Solution approaches from gig-workers
- Create financial reserves
- Try to better assess clients
- Slow down the euphoria of high savings and also look at the dark sides
IV. General solution approaches - Cross-industry
The emergence of the gig-worker manager profession is a fast and effective
approach that could revolutionize the industry without major changes. The Gig-
Worker Manager takes over the improvement points which are based to a large
extent only on communication. Through a strong own management of time, buffers
and the leadership of a gig-worker CRM, a gig-worker manager can solve the
65
problems of the industry almost on his own - the prerequisite is the acceptance of
this new profession.
V. The overall picture of the solutions
Together, these solutions offer strong potential for the industry. If you look at the
solution approaches like a puzzle, the approach looks more complete than if you
look at a single part separately. The complexity of the industry is therefore also
reflected in various smaller and larger - but all of them realizable solutions.
Figure 14
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3 Chapter Three: Conclusion and
Recommendation
3.1 Introduction
In this last chapter of the thesis, we will focus on the challenges of research, the
answer to the hypothesis and the appeal to the industry itself to explore more and
to engage in a process of continuous improvement for its own platform. Only in
this way can there be real sustainable success.
3.2 Review of the research
The biggest challenge of this work was to find solutions in the expert panel. The
reason for this was the approach to always compare strengths and weaknesses
with all risks and opportunities in order to get a complete picture of how the
opportunities of the Gig-Economy can be used and the risks can be minimized.
Thus the danger of individual factors could be quickly dismissed as "repetition"
without checking them again by re-examining the respective headline.
A further challenge was that individual experts from the clients' backgrounds were
very dominant and therefore could not find too one-sided solutions.
Likewise, a re-entry into the topic proved to be very time consuming. The group of
experts held full-day sessions on each of the topic blocks (risks from the
perspective of the business owners, opportunities from the perspective of the
business owners, risks from the perspective of the gig workers, opportunities from
the perspective of the gig workers). A re-entry needs time because the sessions
could not be completed on four consecutive days.
3.3 Limitations of the study
Limits of the study arose from the sometimes rather dominant business owners
and the often extroverted gig workers. Also, a ban on contact on the part of the
platforms to hold zoom meetings with many gig workers was a hindrance. The
67
author therefore had to know the participants on the gig-worker side in order to
use live or zoom meetings for the survey.
3.4 Implications of the Study / Answering the
Hypothesis
The author sees the hypothesis A1 as strongly endangered by this work due to
insufficient communication and the failure to address current weaknesses by gig
workers and clients.
Without the development of the industry, hypothesis A0 will be true and the gig
economy will shrink and lose importance, just like individual platforms already do.
Shrinking would move nerds and underdogs back into permanent employment
and thus open a vicious circle that could destroy the entire industry. An exception
to this is the IT sector, which must be treated separately outside Fiverr. The
exception is that the demand for IT specialists is not satisfied without freelancers
and gig workers.
The author also sees a major problem in the fact that platforms often focus heavily
on their clients. In this case it is important to make sure that the appreciation of
the gig-worker increases, also due to the technical and communicative innovations
discussed in the previous chapter. No gigs without a gig-worker. The platforms
should be as aware of this as they are of the fact that there are no revenues without
clients.
The author considers Gig-Worker Manager as an urgent and logical next step for
the industry to minimize weaknesses quickly or even directly. Gig-Worker
Managers approach the industry without euphoria and with the knowledge of the
weak points, because their job is only created by weaknesses, so these Gig-
Worker Managers have a big entry advantage.
3.5 Recommendations
The biggest challenge of this work was to find solutions in the expert panel. The
reason for this was the approach to always compare strengths and weaknesses
with all risks and opportunities in order to get a complete picture of how the
68
opportunities of the Gig-Economy can be used and the risks can be minimized.
Thus the danger of individual factors could be quickly dismissed as "repetition"
without checking them again by re-examining the respective headline.
A further challenge was that individual experts from the clients' backgrounds were
very dominant and therefore could not find too one-sided solutions.
Likewise, a re-entry into the topic proved to be very time consuming. The group of
experts held full-day sessions on each of the topic blocks (risks from the
perspective of the business owners, opportunities from the perspective of the
business owners, risks from the perspective of the gig workers, opportunities from
the perspective of the gig workers). A re-entry needs time because the sessions
could not be completed on four consecutive days.
3.6 Limitations often he study
Limits of the study arose from the sometimes rather dominant business owners
and the often extroverted gig workers. Also, a ban on contact on the part of the
platforms to hold zoom meetings with many gig workers was a hindrance. The
author therefore had to know the participants on the gig-worker side in order to
use live or zoom meetings for the survey.
3.7 Implications of the Study / Answering the
Hypothesis
The author sees the hypothesis A1 as strongly endangered by this work due to
insufficient communication and the failure to address current weaknesses by gig
workers and clients.
Without the development of the industry, hypothesis A0 will be true and the gig
economy will shrink and lose importance, just like individual platforms already do.
Shrinking would move nerds and underdogs back into permanent employment
and thus open a vicious circle that could destroy the entire industry. An exception
to this is the IT sector, which must be treated separately outside Fiverr. The
exception is that the demand for IT specialists is not satisfied without freelancers
and gig workers.
69
The author also sees a major problem in the fact that platforms often focus heavily
on their clients. In this case it is important to make sure that the appreciation of
the gig-worker increases, also due to the technical and communicative innovations
discussed in the previous chapter. No gigs without a gig-worker. The platforms
should be as aware of this as they are of the fact that there are no revenues without
clients.
The author considers Gig-Worker Manager as an urgent and logical next step for
the industry to minimize weaknesses quickly or even directly. Gig-Worker
Managers approach the industry without euphoria and with the knowledge of the
weak points, because their job is only created by weaknesses, so these Gig-
Worker Managers have a big entry advantage.8
Figure 15
8 Vgl. Syska (2007): 100 ff.
70
4 APPENDICES
4.1 Summarized Results of the Survey
Summarized answers from business owners
Weaknesses
Often poor quality, for example due to lack of competence (BS-1)
Stolen/copied content (BS-2)
Hidden costs for example for copyright (BS-3)
Renegotiation because gig workers lose the overview, especially in
complex projects (BS-4)
rarely an understanding of the country of the client (BS-5)
Working with people from other cultures - resulting in often different views
(BS-6)
Language barriers (BS-7)
Profiles showing other work (especially in the graphics area) (BS-8)
Partially unrealistic reviews of the gig workers (BS-9)
Often lack of communication with the gig-workers (BS-10)
Often too slow answers to queries (BS-11)
Often long rework times allowed by platforms (BS-12)
Canceling of projects by the gig-worker easily possible (BS-13)
success coach mentality
Weak control of the gig-workers
Strengths
Favourable (BS1)
Flexible (BS2)
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Wide range (BC3)
Work contract model (pay on satisfaction) (BS4)
Work contract model (pay on satisfaction) (BS4)
Easily find gig worker platforms (BS5)
Favourable access to experience in the industry possible (BS6)
The test itself is not paid (BS7)
Underdogs/Nerds on platforms (BS8)
Opportunities
Replace entire departments (BC1)
Complete productions can become cheaper in the future (BC2)
Economic (BC3)
No long commitment of personnel (BC4)
Always new wind in the company (BC5)
Gig-Economy enables fast action in case of changing strategies/increasing
flexibility (BC6)
Favourable chance to open up new markets through Gig-Economy (e.g.
geographically through gig workers on site, for example through "Facebook Page
Manager") (BC7)
With increasing quality and increasing reliability, a permanent high savings
potential is created (BC8)
Expanding the industry to other areas (e.g. consulting)
Underdogs/Nerds find those who are introverted or with whom you would
otherwise not have come into contact
New markets for recruiters
Legal permanent circumvention of minimum wage
72
Risks
Data theft
Data loss / data appear on the Internet
Poor quality can also cause damage / consequential damage later
Cancellation of projects by gig workers can result in consequential risks
Possible loss of time in case of aborts
Possible loss of time due to non-fulfillment in whole "teams
Loss of know-how in your own company
Confusing platforms
Faking ratings to influence algorithms
Broken or not understood agreements regarding formats (e.g. image
formats) can also endanger the production chain
Projects not finished but accepted by the client
Work with pirated copies or old versions - consequential damage possible
or damage to files
If the basic idea of the order is not understood, the fulfillment can go
completely in the wrong direction.
Due to a loose attitude of the industry, there are few liabilities/no penalties
for termination, publish profiles in the picture...
Possible price increases/renegotiations if the gig-worker sees that he is
needed
Cultural risks
Risks for IT - for example, through passwords or access to software and
websites
Exploitation of the gig economy by hackers
Liquidity risks due to late charges and thus late payments by the
entrepreneur himself (for example, if the entrepreneur also acts as a middleman)
Increasing mentality through success coaches who think "you are worth
taking more and working less".
Poaching good gig-workers into employment, thus quality loss on platforms
Future Prospects
Solid component until sinking
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Yellow = quality
Green = cost/time
Blue = Communication
Black = formulated by the experts (after)
Summary responses from gig workers
Weaknesses
With complicated customers often low hourly wage
No money in case of cancellation by the client
Loss of time in case of abort
Negotiating power of the clients towards the gig workers supported by the
platforms
Contract for work Model
Information often has to be asked for yourself
Too little information at the beginning
Subsequent improvement requests/change requests from customers -
despite indications on the platforms that this is not possible
Lack of understanding of the customer about the project
Working with people from other cultures = different views
Language barriers
Client evaluation is often missing
Difficult assessment of the client also because of partial contact prohibitions
outside of platforms
Power of the platforms (payout often only 2 weeks after okay of the
customer)
Power of the customer's reviews
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Lack of communication between the clients
Too slow answers to queries
Strengths
Not bound by time and place
Space for free living
Easily find gig worker platforms
Favorable entry into the industry possible
Quick entry into self-employment
Relatively good income possible
Strong customer base of the Gig-Economy
Varied work
International work is possible without any problems
Gathering new experiences
Opportunities
Permanently more varied working life
Constant source of income
Cost increase slowly possible
Further growth in the industry possible - resulting in more orders
With growing popularity - increasing reputation - opportunities for loans etc.
as gig workers could become a recognized profession.
Fairer model for gig-workers possible - even in some areas, e.g. graphic
designers are also paid for the attempt; or the occurrence of a termination fee
Through better communication rules - better cooperation
Risks
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Idea theft can become ever more popular
Gig-Workers are used more efficiently
Exploiting creative people - possible through the contract for work (pay only
when satisfied) - as a trend model of companies to get more sample works
Buying up on platforms, as a gig worker as a possible future model
Paid advertising, for gig workers, on platforms (e.g. like Amazon)
"going down" on platforms with negative evaluations - strong dependence
on evaluations - thereby often pushed to the additional work which was not agreed
upon
Decreasing appreciation because there is/can be an oversupply of gig
workers in some areas - negotiating power of the client
Growing bargaining power of the enterprises opposite the platforms can
worsen the situation of the Gig-Worker further to the example possible later rework
right
Cultural risks, for example the extremely high quality standards of the
Germans - this can be associated with many free improvements
Loss of time
Loss of money
Liquidity risk for longer projects
Risks if customers tamper with the files
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