The transformative role of AI in reconfiguring gig employment in Sri Lanka
By Anudika Wickramasinghe
In the socio-economic fabric of contemporary Sri Lanka, the transformation of labour is no longer driven solely by markets or human management, but increasingly by invisible systems of code. The skyrocketed rate of artificial intelligence within the gig economy signals not merely technological change, it is the emergence of “algorithmic capitalism” which can be defined as a system of automated decision making. The platform economy has been emerged as a growing as socio-technical mechanisms in the gig economy. Although gig work is frequently constructed within neoliberal discourses of flexibility, autonomy, and entrepreneurial freedom, this modalities obscure the algorithmic control of workers through digital platform economy.
What is algorithmic capitalism?
Algorithmic capitalism refers to a contemporary and modern form of capitalism in which algorithms, artificial intelligence (AI), and data-driven systemsplay a central role in organising economic activity, production, consumption, and labour. In this system, economic value is increasingly generated and controlled through digital platforms and algorithmic processes rather than traditional human-led management. Companies use algorithms to collect vast amounts of data, analyse user behaviour, predict outcomes, and make automated decisions that shape markets and labour relations. A key feature of algorithmic capitalism is the rise of platform-based business models (such as ride-hailing, food delivery, and freelance platforms), where algorithms determine how workers are assigned tasks, how customers are matched with services, and how prices and wages are set dynamically.
When considering about modern socio-economic context and gig work in Sri Lanka, it is important to explain the historical transformation from industrial capitalism to algorithmic capitalism. Industrial capitalism mainly was organised around factory-based production, wage labour, and direct managerial control. In this model, workers sold their labour power and capitalists extracted surplus value through control over production. In contrast, algorithmic capitalism redefines this labour process through digital platforms, data, and artificial intelligence. Further, production and services are not confined to factories or companies. Instead of it, production and services are governed and controlled by digital networks where algorithms allocate tasks, coordinate labour and evaluate performance. Control becomes less visible but more pervasive. However, this transformation does not represent an entire break from capitalism but rather its evolution into a more technologically sophisticated version. When considering a Neo-Marxist and Post-Fordist lenses, algorithmic capitalism can be explained as a system where flexibility and digital innovation coexist with deepening inequalities, precarity, and new forms of control, particularly evident in gig economies like those emerging in Sri Lanka.
Impact of AI on gig work
According to global statistics, 60% of freelancers are expected to use AI driven platforms by 2027. Moreover, Freelancers with specialised AI and prompt engineering skills are commanding a 56% wage premium over traditional roles as “Agentic AI” becomes a standard workplace strategy. When considering AI impact on freelances, 2,727coworking website has introduced many statistics about AI and digital labour in 2025. Recent global studies indicate that a significant proportion of freelancers have already integrated AI tools into their workflows, with estimates suggesting that over 70% of freelancers are currently using AI technologiesto enhance productivity and efficiency. However, the algorithm constrains and controls the gig economy.
Transformation of occupation patterns in algorithmic capitalism
Gig economy has expanded with the escalation of AI in Sri Lanka. The employment patterns gradually and structurally have been changed from standardised and full-time occupational arrangements. By today, the stable employer-employee relationships have transformed into more fragmented and task-based employment patterns. In this modern socio-economic paradigm, workers increasingly engage on an assignment based and temporary basis. This paradigm classifies the workers as independent contractors, and they are excluded from the traditional labour patterns and institutional safeguards. According to Schmid’s taxonomy, gig work within digital markets can be distinguished into two sectors such as cloud work (web-based digital labour) and location-based gig work, is spatially embedded, encompassing services such as ride-hailing and delivery, where workers are constrained to specific geographic zones. In the Sri Lankan context, the gig economy has expanded through the proliferation of global, regional, and local platforms, integrating workers into both of these categories. Freelance marketplaces, micro tasking crowd work, and contest-based creative crowd work can be provided as the examples for web-based digital labour. Accommodation, transportation and delivery services, household services and personal services can be provided as other basic types of location based digital labour. According to studies of Friedrich-Ebert-Stiftung (FES), commertical digital platforms can be divided into multiple domains such as goods, services, money, communication, entertainment, and information. Each of these categories is further subdivided based on the nature of the transaction. Goods can be divided into various platforms such as tangible for sale (Physical products sold online – e.g: Amazon, eBay, Etsy), tangible for rent (Physical assets temporarily accessed – e.g: Airbnb), intangible for sale (Digital goods sold permanently – e.g: Apple App Store, iTunes), and intangible for rent (Subscription-based access to digital content – e.g : Spotify, Netflix). Indiegogo and Kickstarter can be introduced as financial platforms or crowdfunding platforms. Facebook, Youtube, Tinder, and any other social media platforms can be categorised as communication and entertainment platforms. Within this system, digital labour (both cloud and gig work) is deeply embedded and governed by algorithmic systems, making it as a central component ofalgorithmic capitalism. With the emergence of AI and expansion of gig work, conventional types of employment have been changed, impacting traditional social relationships, human behaviours, and economy. In Sri Lanka, with the emergence of ride-hailing apps such as Pick Me, Uber and freelancing working platforms gig work and algorithmic capitalism has expanded. Further, when explaining more about algorithmic capitalism in Sri Lanka, Fiverr can be identified as a famous gig work platform for freelancing. It generates integration with global markets for freelancers. Every digital platform is governed by invisible codes or algorithmic system. Therefore, this systematic transformation can be recognized as the superiority of digital capitalism.
The AI-driven automation expansion is fundamentally reshaping the demand for gig labour in Sri Lanka. The most famous platform-mediated sectors such as Uber and PickMe basically rely on algorithmic systems. Its algorithmic manipulation can forecast demand, optimise routes, and dynamically allocate tasks. This algorithmic hegemony reduces human intervention in managerial functions. In Sri Lanka, Uber Eats and PickMe food utilised automated dispatch systems that determine which rider receives which order, effectively restructuring labour demand into just-in-time, on-demand micro-tasks. In parallel, global freelancing platforms like Upwork expose Sri Lankan workers to AI-assisted competition, where tasks such as content writing, data entry, and graphic design are increasingly supplemented or even replaced, by automated tools.
Within this evolving landscape, the relationship between workers and technology can be identified as a form of human algorithmic interaction, producing what can be termed hybrid labour regimes. Rather than fully replacing workers, algorithms function as coordinative and supervisory agents, shaping how labour is performed in real time. For instance, ride-hailing drivers working through Pick Me or Uber must continuously respond to algorithmic cues such as acceptance rates, customer ratings, and surge pricing signals. However, their behaviour aligns with system-generated incentives. In this sense, labour becomes a negotiated process between human agency and algorithmic command, where workers retain limited autonomy but remain structurally dependent on opaque computational systems.
Generation Z and gig economy
According to DemandSage website, 435 million gig workers can be identified in the global arena in 2025. According to World Bank, 76.4 millions of Gig workers in United States in 2025. Further, according to the global predictions, market size of the gig economy can be expanded into $ 2,178.4 billion in 2034. According to global statistics, 15% of baby boomers are engaging in gig work, 30% of Generation Z are engaging in gig work, and 48% of millennials are engaging in gig work. According to researchers’ explanations, less than 5% of workers are engaging in gig work in 2025 in Sri Lanka. When considering generation Z, it has an increasing interest in gig work, and they are hugely controlled by algorithmic hegemony or algorithmic capitalism. According to the research article in Sri Lankan Journal of Entrepreneurship, within the evolving structure in Sri Lankan economy, Gen Z has become a driving sector of gig economy. Empirical research conducted among Sri Lankan youth (with a sample of 450 respondents) demonstrates that multiple factors significantly influence Gen Z’s attraction to gig work. Here, task flexibility, social influence, and contextual economic pressures can be introduced as examples. Notably, the findings reveal that social and task-related factors are among the strongest predictors, indicating that Gen Z is not only economically motivated but also influenced by peer networks and lifestyle preferences. The expansion of the gig economy has also been accelerated by structural challenges such as youth unemployment and economic instability, particularly following the COVID-19 pandemic. For many young workers engaged in gig economy because it functions as a “quick alternative” source of income and a better solution for the situations where stable employment in unavailable. Furthermore, according to Institute of National Security Studies in 2024, digital platforms have enabled Gen Z workers to access global labour markets, allowing them to engage with international clients and diversify their income streams beyond local economic constraints. However, according to Department of Census and Statistics, despite these opportunities, statistical reality also reflects underlying vulnerabilities. The relatively low participation rate (below 5%) suggests that gig work remains informal, underregulated, and not fully captured in national labour statistics, complicating efforts to measure its true economic contribution. Moreover, the reliance on platform-based work exposes Gen Z workers to income volatility, lack of social protection, and algorithmic control, reinforcing patterns of precarity rather than long-term security. Thus, while Gen Z is at the forefront of adopting gig work in Sri Lanka, statistical evidence reveals a dual realitysuch as the gig economy represents both an emerging opportunity for youth employment and a structurally fragile labour regime that requires policy attention, regulation, and institutional support.
Thus, algorithmic capitalism in the contemporary digital arena can be demonstrated through the transformative role of artificial intelligence in gig employment in Sri Lanka.
(The writer is an assistant lecturer at the Rajarata University of Sri Lanka and can be contacted on [email protected])
Disclaimer: The views and opinions expressed in this article are those of the writer and do not necessarily reflect the official position of this publication.
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