ASU research finds that the gig economy doesn't really produce a 'flat Earth'


The online “gig economy” would seem to create an ideal work world for freelancers, as employers can choose the best people for a project from a global pool and workers can bid on jobs in any country.

But does the internet really make a true meritocracy?

A new paper by an Arizona State University professor finds that some biases still keep people away from work, but that modifying the online outsourcing platforms could promote fairness for people who are qualified.

Yili Hong, an assistant professor of information systems in the W. P. Carey School of Business at ASU, examined data from one of the world’s largest online platformsThis platform posts more than 11 million projects from around the world, with more than 20 million registered users. that matches freelance information-technology workers to projects around the world.

Yili Hong 

“There’s long been the idea that the internet has ‘flattened’ the world, providing a level playing field for everyone all over the world,” Hong said.

“That’s the idea of these marketplaces. IT services are easy to outsource because you just need to deliver the codes, which you can do online. It’s not like a physical product. Anyone from any part of the world, as long as you have the internet and you have the skills, can compete with other people.”

Many studies have looked at pricing in the online gig economy, but few have considered country differences.

Hong and his colleagueHong, the co-director of the Digital Society Initiative in the Department of Information Systems at the W. P. Carey School of Business, did the research paper, “On Buyer Selection of Service Providers in Online Outsourcing Platforms for IT Services,” with Paul A. Pavlou of the Fox School of Business at Temple University. The paper will soon be published in the journal Information Systems Research. looked at several variables that could affect whether an employer chose a certain worker for an IT project. Three of those were objective: differences in language, time zone and culture between the countries of the employer and the prospective worker. 

“Culture could be things like conformity,” he said. “In some countries, I have to give you something very detailed. In other countries, they want you to take more initiative.”

The fourth was more subjective — whether the employer perceived the worker’s home country as being highly developed in information technology.

Finally, people who seek jobs on online platforms have “ratings,” based on past performance, and while many previous studies have looked at how ratings affect prices, Hong wanted to see whether a high rating could mitigate bias in choosing that worker.

Hong analyzed several big sets of publicly available data.

“What I found is if you have language, culture or time differences, I’m less likely to select you. If you are from a country that’s highly developed, I’m more likely to hire you,” he said.

Workers with good ratings were more likely to overcome language and culture differences, as well as the perception of their country’s IT development — but not time zones, the study found.

Hong studies the gig economy, and has done previous research on how the ride-sharing platform Uber affected traffic patterns and how online reviews changed when the platforms integrated with social media. He wonders whether freelancing sites could provide information to reduce these biases, such as by eliminating the country information or by offering language tests within the platform.

“Even if we are from different time zones, maybe I’m diligent and I can cater to that. I can get up early in the morning to talk to you. Maybe I’m from China, but I have 100 percent on this English test,” Hong said. “Even if I’m from a lower-developed country, I’m a summa cum laude from a good university.

“Our discipline is about how to design systems to better present information. These sites could be more sophisticated at providing information to make it more fair for everyone.”

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