Jobs like food delivery for Deliveroo, etc. are very low productivity and consumers are not willing to pay a lot for delivery.

This type of jobs can only be paid at the low end. Rates don't go up, they can't. What's happening s is that those jobs and services disappear. That's good if that leads to higher productivity, better paid jobs, but not if that leads to unemployment.

This has an impact on the length of the workweek, too. But in any case all self-employed must decide whether they can afford to cut their hours or if they can commercially.

The "welfare state" must be paid for somehow, too.

If it's too low productivity then it shouldn't exist. This is, mathematically speaking, orthogonal to gig vs non-gig.