The Impact of the Digital Economy on Labor-Market Structure: Evidence and Governance from the Platform Economy_Vol. 2 No. 6 (JBM 2025)_Journal of Business and Marketing (ISSN: 3005-5717)

Home > Journal of Business and Marketing (ISSN: 3005-5717) > Vol. 2 No. 6 (JBM 2025) >

The Impact of the Digital Economy on Labor-Market Structure: Evidence and Governance from the Platform Economy

Download PDF

DOI: https://doi.org/10.62517/jbm.202509616

Author(s)

Tangyong Zhou

Affiliation(s)

Economic in Social Science, University of Ottawa, K1N 6N5, Ottawa, Ontario, Canada

Abstract

In the last ten years, digitally mediated platforms have changed the way that work is matched, tracked, and paid for in ride-hailing, last-mile deliveries, online freelancing, and creative economies. This study integrates international scholarship, comparative regulation, and illustrative instances (Meituan, Didi, Uber, and Douyin/TikTok) to evaluate the impact of platformization on labor market structure. I contend that platforms expedite a transition from conventional employment to varied non-standard arrangements, facilitated by algorithmic management and two-sided market principles that redistribute risk from employers to employees. The effects are mixed: platforms make it easier to get started and create more flexible income opportunities, but they also make it harder for employers to take responsibility, make income less stable, and put workers under opaque, data-driven control. A review of policies in the EU, the U.S., China, Singapore, Spain, and the U.K. shows that there is more agreement on five regulatory levers: (1) presumptions of employment or intermediate dependent contractor statuses; (2) portability of social protection with shared financing; (3) transparency and human oversight for algorithmic systems; (4) data access to enable enforcement and collective bargaining; and (5) targeted inclusion of youth, women, and migrants. The paper ends with a macro-structural framework that connects platform governance to labor market segmentation. It also suggests a policy mix for China (quasi-employment pilots, co-financed social insurance, algorithmic audits, and sectoral dialog) to improve job quality without hurting the growth benefits of the digital economy.

Keywords

Digital Economy; Platform Labor; Algorithmic Management; Non-standard Employment; Labor Market Governance

References

[1] State Council Information Office of the People’s Republic of China. (2023). China’s digital economy grew to 50.2 trillion yuan in 2022. https://english.www.gov.cn/archive/statistics/202304/27/content_WS644a6152c6d03ffcca6ecb0e.html [2] International Labour Organization. (2021). World Employment and Social Outlook 2021: The role of digital labour platforms in transforming the world of work. ILO, Geneva. https://www.ilo.org/publications/flagship-reports/role-digital-labour-platforms-transforming-world-work [3] Rochet, J.C., Tirole, J. (2003). Platform competition in two-sided markets. J. Eur. Econ. Assoc., 1(4): 990-1029. https://www.jstor.org/stable/40005175 [4] Parker, G., Van Alstyne, M., Choudary, S.P. (2016). Platform Revolution. W. W. Norton, New York. [5] Kellogg, K.C., Valentine, M.A., Christin, A. (2020). Algorithms at work: The new contested terrain of control. Acad. Manage. Ann., 14(1): 366-410. https://doi.org/10.5465/annals.2018.0174 [6] Murgia, A., Pulignano, V., Doellgast, V., et al. (2020). Hybrid areas of work between employment and self-employment: Emerging challenges and future research directions. Front. Sociol., 4: 86. https://doi.org/10.3389/fsoc.2019.00086 [7] Rosenblat, A., Stark, L. (2016). Algorithmic labor and information asymmetries: A case study of Uber’s drivers. Int. J. Commun., 10: 3758-3784. http://dx.doi.org/10.2139/ssrn.2686227 [8] Vallas, S., Schor, J.B. (2020). What do platforms do? Understanding the gig economy. Annu. Rev. Sociol., 46: 273-294. http://dx.doi.org/10.1146/annurev-soc-121919-054857 [9] Kässi, O., Lehdonvirta, V. (2018). Online Labour Index: Measuring the online gig economy for policy and research. Technol. Forecast. Soc. Change, 137: 241-248. https://doi.org/10.1016/j.techfore.2018.07.056 [10] Stephany, F., Kässi, O., Rani, U., Lehdonvirta, V. (2021). Online Labour Index 2020: New ways to measure the world’s remote freelancing market. Big Data & Soc., 8(2): 1-7. https://doi.org/10.1177/20539517211043240 [11] Srihita, H.R., Goli, G., M.R., Gobinath, R. (2025). Transformative dynamics of the gig economy: Technological impacts, worker well-being and global research trends. Int. J. Eng. Bus. Manage., 17: 1-15. https://doi.org/10.1177/18479790241310362 [12] European Parliament and Council of the European Union. (2024). Directive (EU) 2024/2831 of 23 October 2024 on improving working conditions in platform work. EUR-Lex. https://eur-lex.europa.eu/legal-content/EN/TXT/uri=CELEX:32024L2831 [13] Ministry of Human Resources and Social Security of the People’s Republic of China. (2021). Guidelines on Safeguarding the Labor Rights and Interests of Workers in New Forms of Employment. http://www.lawinfochina.com/display.aspx?id=36322&lib=law&EncodingName=big5 [14] Reuters. (2021). Meituan to change delivery algorithm rules as China urges labour protection. https://www.reuters.com/world/china/meituan-change-delivery-algorithm-rules-china-urges-labour-protection-2021-09-13/ [15] South China Morning Post. (2024). Meituan to end late-delivery penalties for couriers amid crackdown on food-delivery industry [by Ben Jiang]. https://www.scmp.com/tech/article/3292643/meituan-end-late-delivery-penalty-amid-regulatory-crackdown-algorithm-misuse [16] Wang, Y. (2025). Current status and challenges of China’s platform economy: A macroeconomic perspective. Adv. Econ. Manage. Polit. Sci., 187: 1-12. https://doi.org/10.54254/2754-1169/2025.BL23703 [17] Ministry of Manpower (Singapore). (2024). CPF changes for platform workers. https://www.mom.gov.sg/employment-practices/platform-workers-act/cpf-contributions-for-platform-workers [18] California Supreme Court. (2024). Castellanos v. State of California, No. S279622. https://law.justia.com/cases/california/supreme-court/2024/s279622.html [19] U.S. Department of Labor, Wage and Hour Division. (2024). Employee or independent contractor classification under the Fair Labor Standards Act (Final rule), 89 Fed. Reg. 1638-1743. https://www.federalregister.gov/documents/2024/01/10/2024-00067/employee-or-independent-contractor-classification-under-the-fair-labor-standards-act [20] Ministry of Manpower (Singapore). (2024). Work injury compensation for platform workers. https://www.mom.gov.sg/employment-practices/platform-workers-act/work-injury-compensation-for-platform-workers [21] Cook, C., Song, J., Horton, J. (2018). The gender earnings gap in the gig economy: Evidence from over a million rideshare drivers. NBER Working Paper No. 24732. National Bureau of Economic Research. https://www.nber.org/papers/w24732 [22] U.K. Supreme Court. (2021). Uber BV and others v Aslam and others 2021 UKSC 5. https://www.supremecourt.uk/cases/uksc-2019-0029.html [23] Roy, D., Dutta, M. (2022). A systematic review and research perspective on recommender systems. J. Big Data, 9(1): 59. https://doi.org/10.1186/s40537-022-00592-5 [24] Poell, T., Nieborg, D.B., Duffy, B.E. (2021). Platforms and Cultural Production. Polity, Cambridge.