Good Times for Gig Workers Won’t Last Forever
By David Brodwin, American Sustainable Business Council
The on-demand economy (which includes companies like Uber, Airbnb and TaskRabbit) has brought a firestorm of controversy about the nature of work and the meaning of the social contract.
On one side of the controversy are the entrepreneurs in these companies. On the other side are advocates for worker rights. The entrepreneurs emphasize the freedom and opportunity created for workers who can pick their own hours and, in some cases, their pay rates. The worker advocates emphasize the loss of protections like minimum wage, employer-paid health care and other benefits – which apply to employees but not to contractors.
Both sides of this debate claim to have the workers’ interests in mind. And until now, we’ve not heard much – other than anecdotes — from the workers themselves. Last week, though, an important poll was released, conducted by the pollster Penn Schoen Berland and commissioned jointly by Burson-Marsteller (a public relations firm), the Aspen Institute (a think tank) and Time magazine.
The report shows a curious ambivalence among workers in the gig economy about how they want to be treated and whom they trust to protect them. It raises important questions about what will happen to gig workers as the industry consolidates.
For starters, gig workers say they are a fairly happy lot, but some of that happiness is due to lack of conventional career opportunities. Among people who have worked in the on-demand economy (for example, driving for Uber, or renting out their couch on Airbnb) 76 percent report a positive experience. Compared to the public at large, on-demand workers are more upbeat about their personal financial situation and more confident that their finances will improve over the coming year. Most feel pretty good about the companies they work “for”: 61 percent believe that on-demand companies “care about their workers” and 66 percent consider the companies “trustworthy.”
But part of the positive feeling expressed by gig workers stems from the fact that they’re simply glad to have some income. Thirty-three percent of gig workers say they “could not find work at a traditional company.” And the most committed gig workers tend to be on the periphery of regular careers: a disproportionate number are either on the young side (trying to get a career established) or on the old side (trying to sustain income because they can’t yet retire). Racial minorities, who often face discrimination in hiring and pay rates, are very overrepresented among gig workers.
In essence, the on-demand economy contains two very different segments among workers: the “Want Tos” and the “Need Tos.” The two groups may need different social policy. The “Want Tos” like their independence. Many of them may have another major time commitment, for example they might drive Uber only during the lucrative surge pricing periods, while at other times they work toward their graduate degree. They are “skimming the cream” of the on-demand economy. But the “Need Tos” are forced into the on-demand economy for lack of other opportunity, and they may not make as much money. The split between these two segments is close to 50/50.
On-demand workers say they want benefits, training and expense reimbursement, as you would expect. But interestingly, roughly half of them oppose regulation that would require on-demand companies to treat their workers the same as if they were employees rather than contractors. Those who oppose regulations that require gig workers to be treated as employees are, in essence, trusting the market: They assume that competition between companies (like Uber and Lyft) will force companies to pay workers fairly, without any regulation imposed.
These views will likely shift as the gig economy continues to consolidate and competitors are bought out (or go out of business, as Sidecar recently did). Disruptive tech-based businesses tend to have a “winner take all” quality. Those who welcome the disruption at the outset often find themselves on the wrong end of it. For example, when Amazon came on the scene, publishers who resented the muscle of big retailers like Barnes and Noble welcomed the new entrant. They’re not so happy now.
In the ride-hailing business, Uber completely dominates Lyft, its closest competitor, by 10 to 20 times on almost every conceivable metric. Soon, perhaps, Uber will be in a position to rewrite the deal terms with its drivers, without fear of losing drivers. Similar consolidation is underway elsewhere in the gig economy. When that happens, worker satisfaction will go a lot lower, and the appetite for calling gig workers “employees” will be a lot higher.