Help wanted: A gig economy that works for everyone

Print 05 September 2016
Pitch Book Blog

The three-year-old startup from LA that you may have never heard of was an on-demand laundry service. And among the growing number of on-demand service companies in the “gig economy,” it ranked as one of the oldest. But if you’re like most Americans, you probably know next to nothing about the “gig economy” that runs on companies like Washio.

A widely reported study—the first of its kind, actually—from the Pew Research Center released in May found that 89% of Americans didn’t recognize the phrase, with 73% reportedly unfamiliar with “sharing economy,” a common synonym. Whatever it’s called, the labor force “employed” by the Ubers and Airbnbs of the gig economy is likely to grow in the coming years.

Because the avenue to a gig often passes through an app or travels through a website, Silicon Valley is looking to capitalize on this fact with companies in the HR business like Indeed.com and SnagAJob connecting workers with hourly jobs and employers with hourly workers. But as a growing number of reports have pointed out, the workers behind the labor force staffing the gig economy enjoy few rights compared to their full-time counterparts. 

Alas, the Bureau for Labor Statistics doesn’t plan to update its decade-old data on the gig economy until May 2017. Fortunately, the US Census Bureau has compiled data from the IRS (who said collaboration between government agencies was dead?) to identify what it calls “nonemployer businesses.”

Nonemployer business growth by industry, 2003-13

These numbers largely represent self-employed workers running unincorporated businesses without any employees on hand other than the self-employed worker at the helm. As the BLS points out, getting a gig in some fields is far more common than others. The big driver here is temporary on-demand work—which can be great. They’re flexible and varied jobs after all. But they can also be inconsistent and almost always lack benefits.

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