The Gig Economy Is Fine for Gigs
Recently, there has been a lot of hand wringing about the so-called Gig Economy.
For those of you who don’t know the term, the concept of the gig economy is businesses and labor that operate on a per gig, that is per single transaction, basis. The most well known gig economy based businesses currently are Uber and AirBnb. The former, providing car rides to people (like a Taxi normally would) and the latter providing rentals of either a room or a house (like a hotel normally would).
These services are designed to let people pop in and out of the market. If you have some time on a Thursday afternoon, you can sign into the Uber app and give people a few rides, and earn a few bucks. Likewise, if you have an extra room, you can rent it out, temporarily to travelers when it is convenient for you, rather than having a roommate move in permanently.
Ironically, the gig economy isn’t really new. We just used to call it freelancing. I myself, find new clients and write for them, and then don’t. Uber acts much like Upwork. It isn’t as fast and simple, but only because writing a piece isn’t quite as quick and easy as driving a car.
The Problem with the Gig Economy Competition
There are two major problems that arise with the gig economy and the businesses in them. In the case of Uber and Lyft, the problem is that most cities have well established taxi companies, which if not flat out monopolies, are tightly controlled to ensure that the existing players do not have to share their potential revenue streams. As you can imagine, this lack of competition leads to less than desirable services that customers aren’t very happy with.
New York City taxi cabs are notorious for practically abandoning the streets during evening rush hour because that’s when the cab drivers do their shift change. In other cities, taxis are highly inefficient, such as in Denver, where you have to call at least a half and hour in advance, and even then, it’s pretty hit or miss if your cab shows up on time, or even at all. It’s no wonder then that services like Uber or Lyft have taken off, providing increased supply during high demand, and with drivers competing for fares, you are much less likely to have to wait all day.
The problem, of course, is that the established businesses don’t like Uber cutting into their profits by taking riders away.
On the Airbnb side of things, hotels don’t like people being able to find, cheaper, potentially more convenient accommodations, especially during peak events where hotels can usually jack up their rates due to extra demand.
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As you may have noticed, in both scenarios, the customer is the winner by being able to choose what service provides them the best experience. I, for example, have infrequently used Uber, but never used Airbnb. I like the standardization of hotels, but I don’t like the poor taxi service and drivers who are angry that I’m only going a short distance instead of all the way out to the airport like they would prefer.
The Problem With Gig Economy Workers
The bigger issue for most activists and analysts involves the workers in the new gig economy. The idea behind the gig economy is supposed to be that workers choose to work “by the gig.” As it turns out, some people have decided to turn what is supposed to be a choose-your-own temp thing into their full-time job. Not surprisingly that is a difficult proposition.
In some ways, this is the company’s own fault. Both Uber and Lyft talk about making large amounts of money in their ads for new drivers. Of course, to make those amounts, you have to drive a lot, maybe even full-time. It’s no surprise then, that drivers who work full-time hours want treated like full-time employees. That would be all well and good, except that drastically changes both the technology and effort needed, as well as the cost, threatening to unravel the whole thing.
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The irony is that the gig economy is great for certain people. For example, I do pretty well as a freelance writer, and my wife has a full-time job that provides the benefits we need. Although I’ve never actually driven for either Uber or Lyft, when I have kicked around the idea it is to take advantage of times when I might have less work (freelancing is also the gig economy if you think about it) and maybe make some money on the side to do fun things like go to Vegas, or buy a new Playstation, or other things that might not fit in our more responsible budget.
I don’t want or need a job where I have to give up control of my hours to someone else. After all, if I’m full up on gigs, I don’t need to drive, and I don’t always know in advance when that will happen. Even a part-time job can be too little flexibility. The gig economy is perfect for me.
In fact, I used to be involved in an earlier version of the gig economy for writers. Before Google changed up its search algorithm, it was profitable for companies like Demand Studios or Bright Hub to offer writers $10 per article for a small, but hopefully useful, article on a specific topic. Then, like now, this was not way to make an actual living, and many writers loudly complained about that very fact.
But, being able to grab and write an article in an hour or less and make $10 was great for someone like me. I’d finish my day, and still have an hour or two until the kids got out of school, I could sign on and make a few extra bucks.
Then, as now, the problem comes not from using the platforms as they are intended, for miscellaneous gigs. The problem comes from the people who want the best of both worlds. They want the flexibility of work any time, for any amount of time, but also the pay and security that typically comes from a 40 hours per week, the boss sets your schedule kind of job.
Whether the gig economy succeeds or not will depend entirely upon whether or not the companies can make regulators and law makers, as well as workers, understand. You can’t have the take-it-or-leave it job, without the take-it-or-leave it pay.