Difference between revisions of "Gig Economy"
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A little over an hour later, Ms. Guidry returned home, having completed an airport drop-off. She had made $28, not accounting for the cost of gas. She would do a second airport run, then come back to wake her family and make breakfast."
A little over an hour later, Ms. Guidry returned home, having completed an airport drop-off. She had made $28, not accounting for the cost of gas. She would do a second airport run, then come back to wake her family and make breakfast."
Revision as of 17:38, 25 April 2016
"Tina Brown, editor of The Daily Beast, recently christened today's job market as the "gig economy." Her point is that fewer people seem to have full-time jobs; instead they have contract gigs.
Being a freelancer or contract worker may actually be a practical way to survive this recession. It could also lead to new entrepreneurial vistas." (http://www.fastcompany.com/1222400/thriving-gig-economy)
2. By Sarah Kessler:
"The gig economy (a phrase which encompasses both the related collaborative economy and sharing economy) represents a theory of the future of work that's a viable alternative to laboring for corporate America. Instead of selling your soul to the Man, it goes, you are empowered to work for yourself on a project-by-project basis. One day it might be delivering milk, but the next it's building Ikea furniture, driving someone to the airport, hosting a stranger from out of town in your spare bedroom, or teaching a class on a topic in which you're an expert. The best part? The work will come to you, via apps on your smartphone, making the process of finding work as easy as checking your Twitter feed.
Whatever you do, it will be your choice. Because you are no longer just an employee with set hours and wages working to make someone else rich. In the future, you will be your very own mini-business.
The vision is so intoxicating that even as the U.S. unemployment rate remained stubbornly high, with millions of long-term unemployed dropping off the rolls and untold millions more underemployed, the gig economy came to offer not just a path to freedom from our desks but also a way to get the American people back to work. In a TED talk, Rachel Botsman, author of What's Mine Is Yours: The Rise of Collaborative Consumption, described sharing economy companies as "lemonade stands on steroids." New York Times columnist Thomas Friedman wrote a piece headlined "How To Monetize Your Closet" that argued "these entrepreneurs are not the only answer for our economic woes...but they are surely part of the answer." (http://www.fastcompany.com/3027355/pixel-and-dimed-on-not-getting-by-in-the-gig-economy)
Ms. Guidry drives for Uber/Lyft/Sidecar
By NATASHA SINGER:
"In a climate of continuing high unemployment, however, people like Ms. Guidry are less microentrepreneurs than microearners. They often work seven-day weeks, trying to assemble a living wage from a series of one-off gigs. They have little recourse when the services for which they are on call change their business models or pay rates. To reduce the risks, many workers toggle among multiple services.
“Having a diverse portfolio is the best protection,” says Sara Horowitz, the founder and executive director of Freelancers Union, an advocacy organization. “People are doing this in the midst of wage stagnation and income inequality, and they have to do these things to survive.”
To try to insulate herself from the uncertainty, Ms. Guidry makes herself available to drive most weekdays in the predawn darkness. At that time, she figures, ride seekers are likely to be business travelers headed to the airport, a profitable fare.
Around 4:30 a.m., Ms. Guidry ushered me upstairs to her home office, careful not to wake her family sleeping down the hall. She pulled up TaskRabbit on her laptop to check if any new offers had come in. She scrolled through Craigslist, where she occasionally picks up work as a private chef. Nothing doing.
She glanced at the sofa bed by her desk, musing aloud whether she could rent it out on Airbnb. “The thing is, I have kids,” she said, gesturing to a child-size desk on the other side of the room where her son Aden, who is 5, does his schoolwork. So much for the couch-rental idea.
Resigned, Ms. Guidry activated her Uber iPhone, a device that the company issues to its drivers. On her personal Samsung Galaxy phone, she activated the driver modes for her Lyft and Sidecar apps.
Moments later, the Uber phone pinged with a ride request. She accepted immediately. But, ever in risk-mitigation mode, she waited two minutes before leaving, lest the rider change his mind.
“There’s nothing worse than driving all the way over to some place and then having them cancel,” she explained, heading down to the driveway.
A little over an hour later, Ms. Guidry returned home, having completed an airport drop-off. She had made $28, not accounting for the cost of gas. She would do a second airport run, then come back to wake her family and make breakfast." (http://www.nytimes.com/2014/08/17/technology/in-the-sharing-economy-workers-find-both-freedom-and-uncertainty.html)
"Around 11% of online adults aged 16-75 in the UK, equivalent to up to five million people, are being paid for work through online platforms like Upwork, Uber and TaskRabbit, new research shows.One in five, equivalent to around nine million people, say they have used online platforms to seek paid crowd work. Forty-two per cent – equivalent to more than 18.5 million of us – say they have turned to such platforms to source taxi drivers, builders, graphic designers and even accountants.The online study by the University of Hertfordshire, Foundation for European Progressive Studies and UNI Europa, with fieldwork by Ipsos MORI, revealed more than a quarter (26%) of the crowd workers interviewed earn more than half of their income through online platforms. In the survey of 2,238 adults, nine in ten crowd workers interviewed say they are carrying out desk-based online work for platforms such as Upwork, Clickworker or Peopleperhour.") (http://www.progressiveeconomy.eu/content/platform-labour-sharing-economy-or-virtual-wild
"Larson is also a data point in an economic revolution that is quietly turning millions of people into part-time entrepreneurs, and disrupting old notions about consumption and ownership. Twelve days per month Larson rents his Marin County home on website Airbnb for $100 a night, of which he nets $97. Four nights a week he transforms his Prius into a de facto taxi via the ride-sharing service Lyft, pocketing another $100 a night in the process.
It isn’t glamorous–on nights that he rents out his house, he removes himself to one room that he’s cordoned off, and he showers at the gym–but in leveraging his hard assets into seamless income streams, he’s generating $3,000 a month. “I’ve got a product, which is what I share: my Prius and my house,” says Larson. “Those are my two sources of income.” He’s now looking at websites that can let him rent out some of his camera equipment.
The “gig economy,” the plethora of microjobs fueled by online marketplaces offering and filling an array of paid errands and office chores, has been well-documented, and sites like TaskRabbit, Exec and Amazon’s Mechanical Turk continue to grow apace. What Larson finds himself in, however, is something lesser-noticed and potentially far more disruptive–a share economy , where asset owners use digital clearinghouses to capitalize the unused capacity of things they already have, and consumers rent from their peers rather than rent or buy from a company.
While Airbnb is the best-known example of this phenomenon (to most casual observers, it’s the only example), over the past four years at least 100 companies have sprouted up to offer owners a tiny income stream out of dozens of types of physical assets, without needing to buy anything themselves. “The sharing economy is a real trend. I don’t think this is some small blip,” says Joe Kraus, a general partner at Google Ventures who has backed two car-sharing sites, RelayRides and Sidecar. “People really are looking at this for economic, environmental and lifestyle reasons. By making this access as convenient as ownership, companies are seeing a major shift.”
The sharing concept has created markets out of things that wouldn’t have been considered monetizable assets before. A few dozen square feet in a driveway can now produce income via Parking Panda. A pooch-friendly room in your house is suddenly a pet penthouse via DogVacay. On Rentoid, an outdoorsy type with a newborn who suddenly notices her camping tent never gets used can rent it out at $10 a day to a city slicker who’d otherwise have to buy one. On SnapGoods, a drill lying fallow in a garage can become a $10-a-day income source from a homeowner who just needs to put up some quick drywall. On Liquid, an unused bicycle becomes a way for a traveler to cheaply get around while visiting town for $20 a day.
Getting into the share economy was the reason Avis Budget Group last month chose to pay a whopping $500 million for Zipcar, despite the fact that the pioneering rent-by-the-hour startup generated a paltry profit of $4.7 million over the past year. But Zipcar in some ways misses the larger point of what’s going on: Its fleet, as with Avis’, has been centrally owned. A more profitable model may lie in peer-to-peer car-sharing services such as RelayRides and Getaround, which mimic Hertz or Avis except that the service itself owns nothing. Their fleets, about 50,000 combined at last count, draw from the tens of millions of autos idling in America’s driveways. SideCar and Lyft slice that market finer, monetizing an empty seat by letting owners tote along fee-paying passengers on routes they may already be taking.
Just as YouTube did with TV and the blogosphere did to mainstream media, the share economy blows up the industrial model of companies owning and people consuming, and allows everyone to be both consumer and producer, along with the potential for cash that the latter provides. Shervin Pishevar, a venture capitalist at Menlo Ventures and an investor in Getaround, TaskRabbit, Uber and other startups in this space, believes these services will have a major impact on the economics of cities. “This is much bigger than any specific app,” he says. “This is a movement as important as when the web browser came out.”
FORBES estimates the revenue flowing through the share economy directly into people’s wallets will surpass $3.5 billion this year, with growth exceeding 25%. At that rate peer-to-peer sharing is moving from an income boost in a stagnant wage market into a disruptive economic force." (http://www.forbes.com/sites/tomiogeron/2013/01/23/airbnb-and-the-unstoppable-rise-of-the-share-economy/)
The Gig Economy is not helping workers
1. By Sarah Kessler:
"the prospects of finding a living wage in America do not seem any brighter than they did back in 2008 when Busque founded TaskRabbit. Unemployment has drifted down from its high of 10% in October 2009 to 6.6% in the January 2014 report, but income inequality is, according to research based on tax-return data from the IRS, the worst it has been since 1923.
And the anecdotal evidence is appalling. Walmart, the single largest private employer in the country, was spotted at one location last holiday season hosting a Thanksgiving food drive for its own workers. McDonald's, the second largest fast-food chain in the country, teamed up last summer with Visa to sketch out a budget for its low-paid full-time workers. The budget presumed they would each be working a second job. More than a decade after Barbara Ehrenreich wrote Nickel and Dimed to chronicle firsthand the struggles of low-wage workers, conditions only seem to have worsened.
Meanwhile, politicians have begun fighting over what they might do to help, namely, raise the federal minimum wage from $7.25 an hour to as much as $10.10 an hour. President Obama and the Democratic lawmakers advocating the raise hope that it spurs private employers to follow suit. Gap, for one, announced that it would raise its lowest hourly wages to $10 an hour by next year.
In the tech world, fueled by the success and high valuations of Airbnb (room or home rentals), Uber (car service), Lyft (car service), DogVacay (pet sitting), Postmates (urban courier service), and the many other services that rely on a new cadre of employee to fulfill what they're selling, hope remains high that these marketplaces can create the solution. "People who are renting their homes out in Airbnb or driving for Lyft, they may make more money than working a minimum-wage job," says Jeremiah Owyang, a former social-media analyst who last December launched Crowd Companies, a firm devoted to helping name brands such as Ford and Home Depot connect with startups in the gig economy. These folks are doing so well, in fact, Owyang says, "For some brands, this is a threat to employment."
Some examples cited in the story:
"people like Sharon in San Diego, who has a goal of making $300 a week on TaskRabbit to help pay her bills, but hasn't hit it yet. Or Kristen in New York City, who bids on tasks when she's working full-time as a receptionist. Or Stacie, who works full-time as a software engineer in Boston, but always keeps the TaskRabbit website open so she can complete tasks on her lunch hour, after work, on weekends, or without leaving her desk. Stacie made about $6,000 on TaskRabbit last year, earning her "elite TaskRabbit" status. She likes helping people out, but she would never work on TaskRabbit just for the money. "If I wasn't working full time, I could do more tasks," she tells me, "but even if I doubled that, that's still poverty--$12,000 a year. And there are no benefits. You don't know what you're going to wake up to. You could wake up one day, and be like, oh my god, I made $300 today, and then have three days where you're making $12."
When Stacie heard about Lyft, she decided to try that, too. She passed the screening process, attached the requisite pink mustache to her car, and had a great time driving people around for a day. Then she read an article about the insurance risks of driving for a peer-to-peer ride platform like Lyft. She became afraid that if someone were to sue her for getting hurt in her car, her insurance would not cover it. "I have savings, I have kids, and I have a house. I can't risk it," she says. "If I were 25 and I had nothing, yeah, to make a buck, what are the chances." (Lyft has recently made efforts to address such concerns by expanding the insurance it provides drivers, but there are still ambiguities about what happens if claims exceed Lyft's $1 million protection.)
Leena Chitnis, a former Fulbright scholar, finished an MBA program at Syracuse University last year and, while she looks for work, set up eight gigs on Fiverr to keep her going. So far, she's completed a total of 27 orders and made $176. "I have $90,000 in school loans," she says, "so when people say, can you edit my business plan for five bucks, I'm like, people charge $10,000 to write your business plan, and here I am editing it for four bucks [Fiverr takes 20% of every $5 fee]. I've seen panhandlers get more money outside of the 7-11."
When I order my next Postmates delivery, I talk with the courier who biked through an icy storm to bring me a bag of cashews from Whole Foods. He's 22, which means he can still use his parents' insurance. On this four-hour shift, one of his first since signing up for Postmates, he expects to make about $40. "I don't rely on this for my main source of income," he says. "I haven't talked with anyone who does."
Every once in a while on a crowded New York City sidewalk, a puff of sadness will float off a stranger and hit me like a cloud of too-strong cologne. Whether it's coming from a deliveryman with ice caked to the back of his bike or from a man with an overly starched white collar, it only lasts as long as it takes us to pass each other.
Not so in the gig economy. When you meet your neighbors, you meet their hardships. Sometimes they're upfront about it. "Going through a divorce," reads one TaskRabbit task. "Need somebody to preview emails from a contentious ex, redact any contentious material and summarize the essential practical elements (like 'pack the kids' rain boots next week,')." Other hardships, like Teresa's loneliness, sneak up on you. But it's Marge who makes me want my desk job back."
.... Continuing on her own experience, Sarah writes:
"My experiences in the gig economy raise troubling issues about what it means to be an employee today and what rights a worker, even on a assignment-by-assignment basis, are entitled to. The laws regarding what constitutes an employee have not yet caught up to the idea that jobs are now being doled out by iPhone push notification.
In a recent lawsuit filed against Uber--in the wake of an incident in which a driver hit and killed a child pedestrian on New Year's Eve in San Francisco--the prosecuting attorney is arguing that Uber drivers are employees because their vehicles are logged by the Uber App and are therefore "on the clock" even when they don't have a customer in their car. Postmates asks their workers to sign up for shifts. Zirtual asks them to be available during working hours. And most gig economy platforms have a system for weeding out employees who don't get good reviews from customers. TaskRabbit "removes" them after the "second strike."
I ask Postmates CEO Bastian Lehmann whether he thinks there's a case to be made that his couriers are actually employees. "I don't think it's up to the companies or the startups to decide whether there's an argument to be made or not," he tells me. "There is a law that defines how you employ people, and that law allows independent contractors to be working for companies under specific conditions. If people want to change the scope of the discussion, then I think we have to discuss what is allowed by the law and not what a startup does." Lehmann then trots out the now very familiar argument about how these independent contractors can choose to take the jobs or not, and he points out that FedEx also uses independent contractors (it contracts with small businesses to pick up, deliver, and transport packages).
By Lehmann's math, Postmates couriers are making pretty good money. About 20% of couriers on Postmates' platform are working the job as their primary source of income, he tells me. And for those who might complain they aren't even making minimum wage as a Postmates courier (a charge leveled on Internet message boards and picked up by The Register), Lehmann thinks they're doing it wrong. "Saying we don't provide minimum wage, that's like saying, I'm driving for Uber and there is not enough jobs at 6:00 in the morning," he says. "It's like saying, I don't make any money on Airbnb because I only rent my apartment out on Wednesday night."
My last call is to Leah Busque, CEO and founder of TaskRabbit, to seek comment on many of the problems that I and my fellow TaskRabbits have encountered while working on her platform: the difficulty of scheduling work, the lack of insurance, the desire for recurring work. Busque tells me that a platform revamp is scheduled to go live in the United States this year and that it will address some of these issues. She says that she's "looked into a benefits program" for TaskRabbits and it's "in the works."
But Busque is emphatic that her company's responsibility to TaskRabbits is only to provide the best platform possible--nothing more. "We're about empowering these independent contractors to build out their own businesses," she says. "We don't want them to be TaskRabbit employees. It's good for them to have the autonomy and the drive to do what they want, when they want, for the price that they want."
Given the challenges I witnessed in making a living wage via TaskRabbit, I ask Busque how many people are able to work full-time via her labor market. She puts the percentage of TaskRabbits who use the site as their sole income at about 10%, and she says they "cash out" about $5,000 or $6,000 each month. Another 75%, according to TaskRabbit, "rely on the service to pay their bills."
Busque would like to see both numbers increase. "I think we have a real opportunity to match our vision," she says, "which is to revolutionize the way people work. And to do that, we have to see more and more people using the platform full-time."
By the last day of my employment in the sharing economy, I've booked precisely zero Fiverr gigs. Nobody has invited me to cook pizzas at their hipster special occasions (and after about a month, my menu has mysteriously disappeared from the site). Apparently the people of Manhattan are better with Scotch tape than I anticipated, because I have not had a single Skillshare student. WunWun still hasn't responded to my application. I have had two DogVacay requests that I could not accommodate. Two of the services on my list, Prim and Cherry, have shut down. One of them, Exec, was acquired. It had started as an broader errand-running business, and one of the founders wrote a farewell blog post in which he noted that "it was difficult to get [people seeking supplemental income] to stick around when we couldn't guarantee work."
I have come to realize that one of the cruel ironies of the gig economy is that even though it's geared almost exclusively to serve urban markets, the kind of densely packed cities where space is at a premium, one needs a car to have a shot at the cream of the work that's available. Even worse, the universe of gig economy startups is mostly relying on young people and others who are underemployed--exactly the people whom are least likely to be able to afford a car in a city. Or have an extra bedroom. Or a parking space. Or designer clothes. Or handyman skills.
When I'm looking for dependable work, I find myself at the bottom of the digital employment totem pole: Mechanical Turk, Amazon's freelance marketplace. More than 500,000 people--many of whom live in the U.S.--have signed up on the site to complete mundane, repetitive tasks posted by such companies as Twitter, LinkedIn, and AOL. Site veterans can earn qualifications that allow them to accept better, higher-paying tasks (my college degree has no pull here). My best asset is that my IP address is registered in the United States. It's a prerequisite that allows me to take some of the better jobs, like spending 24 minutes taking a survey that pays $0.70.
I spend the biggest chunk of my time, about two hours, labeling photo slideshows at a nickel each. Each of them has five photos, and each photo has 11 pages of labels to use on it. That means that it takes at least 55 clicks to earn $0.05. There are slideshows of cats on couches. Cats on beds. Dogs on beds. Cats in sinks. Dogs with cakes. Cats with cakes. Cats with pizza. Cats with windows. Dogs in car mirrors. Dogs with bananas.
On my way to completing 61 slideshows, I begin to resent Larry Zitnick, the Microsoft researcher who posted this maddening task. When I call him later, he's actually quite nice. Zitnick explains that my slideshow labels are helping to train a computer to recognize images. "In the early 2000s, our datasets generally had hundreds or maybe a few thousand images in them," he says. "And now we had have datasets with millions of images in them. It's because of Mechanical Turk."
Labeling slideshows suddenly feels very important. But it still doesn't pay. I make $1.94 an hour. Research suggests most people, like me, aren't making substantial income off their Mechanical Turk work. Only 8% of workers surveyed by researchers at the University of California, Irvine, said that Mechanical Turk income always helped them meet their basic needs.
My best day at TaskRabbit suddenly seems like a winner. I made $10 an hour at the dance job (not counting the performance that will take place the next day), $15 an hour at the Harvard Club, and about $20 an hour wrapping presents: $95 in total. My eight-and-a-half hour day was a best-case scenario. There was no downtime. The only break I had was a 10-minute lunch that I grabbed next to TaskRabbit user Mark's apartment before gift wrapping his presents. But when you factor in the time I spend commuting between tasks, I only made $11 an hour.
That week, I make $166 on TaskRabbit, which is $46 above the median active TaskRabbit in my neighborhood. I also made $100 in cash from the tutoring job that started on TaskRabbit but was paid off the platform.
Near Central Park the next day, in the second blizzard of the year, my fellow dancers breathe into their mittens for an hour while waiting for the choreographed marriage proposal. "I would never say this professionally," says the choreographer, "But I don't fucking care. Do whatever you need to do to stay warm and get through this." The girl from Sweden doesn't have any boots. She fantasizes out loud about going home to stick her feet in the bathtub as we all jump around trying to stay warm. I mention the $20 I'm making, which at this point seems rather low. The dancers stare at me. It turns out that I and two other TaskRabbits are the only members of the group who are actually getting paid." (http://www.fastcompany.com/3027355/pixel-and-dimed-on-not-getting-by-in-the-gig-economy)
2. By NATASHA SINGER:
"Technology has made online marketplaces possible, creating new opportunities to monetize labor and goods. But some economists say the short-term gig services may erode work compensation in the long term. Mr. Baker, of the Center for Economic and Policy Research, argues that online labor marketplaces are able to drive down costs for consumers by having it both ways: behaving as de facto employers without shouldering the actual cost burdens or liabilities of employing workers.
“In a weak labor market, there’s not much of a floor on what employers, or quasi employers, can get away with,” Mr. Baker contends. “It could be a big downward pressure on wages. It’s a bad story.”
Continue reading the main storyContinue reading the main story Labor activists say gig enterprises may also end up disempowering workers, degrading their access to fair employment conditions.
“These are not jobs, jobs that have any future, jobs that have the possibility of upgrading; this is contingent, arbitrary work,” says Stanley Aronowitz, director of the Center for the Study of Culture, Technology and Work at the Graduate Center of the City University of New York. “It might as well be called wage slavery in which all the cards are held, mediated by technology, by the employer, whether it is the intermediary company or the customer.”
Peer-economy experts and executives recognize that many gig workers are laboring largely without a safety net. Mr. Clark, the industry veteran who founded RelayRides, reels off a list of lacunas: health insurance, retirement saving plans, tax withholding and even the kind of camaraderie and mentoring that can be available in full-time office jobs.
“Looking at this as a new paradigm of employment, which I think it is, the question is, What are you giving up?” Mr. Clark says. “At the end of the day, there’s a metalayer of support services that is missing.”
He predicts that new businesses will soon arise to cater to the needs of project workers: “There are opportunities to focus on providers, finding ways to make it easier, more stable and less scary to earn in the peer economy.”
TaskRabbit has started offering its contractors access to discounted health insurance and accounting services. Lyft has formed a partnership with Freelancers Union, making its drivers eligible for the advocacy group’s health plan and other benefit programs.
That may not be enough. Dr. Standing, the labor economist, says workers need formal protections to address the power asymmetries inherent in contingent work. International rules, he says, could endow gig workers with basic entitlements — like the right to organize and the right to due process should companies seek to remove them from their platforms.
“There should be codes of good practice at an international level that all companies should be required to sign,” he said." (http://www.nytimes.com/2014/08/17/technology/in-the-sharing-economy-workers-find-both-freedom-and-uncertainty.html)