Going off of HelloDAO’s core tenet, DAO is not only a web 3 idea, in this article I will analyze how DAO can change the gig economy and benefit both the service providers and the employers.

The gig economy is characterized by flexible work hours such as food delivery and ride-hailing services. Apps such as Uber, Lyft, and Doordash, hire contract workers and act as a middleman between customers and those workers. The aforementioned companies have undeniably achieved huge success as they have a combined valuation of 70 billion dollars as of October 2022. The reason why these apps are better than the traditional Medallion Taxi Services is that these apps effectively break down the barrier between customers and service providers by setting up a direct line of communication for each “ride” using GPS and instant messaging/call service. However, the industry faces backlashes over worker’s pay, health benefits, and payout schedule. Workers cannot set the price for their service, and it’s controlled by the app. Workers are categorized as contractors, so companies don’t have to pay health insurance for them. Payouts are often not delivered real-time.

The gig economy apps boast that you can be your own boss and work according to your own schedule. Sounds a lot like decentralization, right? Let’s take Uber for an example. Signing up to be a worker is extremely easy with little requirement while signing up as a user requires almost nothing at all. If you have used any web 3 apps, you will know the resemblance is striking. However, once we dive further into the governance structure of Uber, you will see how centralized it actually is and the detrimental effects of being centralized while it should be decentralized.

First, although workers can indeed set their own working hours, they do not get to decide their pay. As a centralized app, Uber makes all the decision regarding how much they charge and pay the riders and drivers. Number of signed-up drivers is an important revenue driver for Uber because Uber will be able to cut down payment for drivers and increase profit margins for themselves as more drivers are on the road. Operating all over the world, Uber is analyzing data regarding demands for ride, macroeconomics factors such as fuel prices, individual country’s income level, to determine fares. While it might be true that Uber can hire the best analysts, I believe the workers should have the right to determine how much they want to get paid, collectively. They can do this by periodically voting to adjust how much the fares should be based on the actual demand they experience. DAO is the best organization for them because as contract workers, and not legally “employees’ of Uber, it’s difficult if not impossible for them to form a traditional labor union even if they want to. In addition, a labor union is expensive to manage. Cost is a major factor for gig workers. DAO is easier to maintain, cheaper to form, and offers more benefits which I will get into.

Many gig workers are under financial stress, living paycheck to paycheck along with a looming global recession and high inflation. In order to get paid, they will have to wait for Uber to release their pay and their banks to clear the deposit. But the actual process is complicated and time-consuming. In some apps, workers only get paid after customer rates them. While this may make sense for companies that sell physical products which can be returned if the customer is not satisfied, the services provided by gig workers are often “irreversible” and thus cannot be returned. DAO excels at giving payouts better than any of the apps because blockchain is a peer-to-peer payment system with no middleman. In addition, the amount earned in crypto can be used as representation of voting power for important matters such as fares. More experienced workers with more earned tokens which give them more say in important matters as other people will look for their opinion for guidance. Transparent earnings statistics also keeps a healthy balance of professional relationship between workers. Given the low requirement for being a driver, new drivers will constantly join the herd and it’s important that they receive some guidance when voting for important decisions. In a DAO, they will know who the senior members are simply by taking a look at their earned tokens. Every decision must be carefully made in order to improve the well-being of everyone.

The list of benefits of DAO for gig workers goes on. Smart contracts can be embedded in the app that gig workers use, which execute decisions based on the results of votes. Decisions such as when and who should be working, will be easily enforceable since smart contracts can simply lock the workers out of the app if they shouldn’t be working at the time. This will also prevent fatigue driving, reduce burnouts and save lives.