The Gig Economy Is Real If You Know Where to Look

non-employees are rising at a faster rate than employeesFrom the Harvard Business Review, Ian Hathaway reviews data in certain segments of the economy (rides and rooms) and in certain geographic regions.  He concludes that more gigs have not resulted in fewer employees.  He writes:

Three major findings stand out. First, there are clear growth surges in nonemployer firms in each of the two industries associated with passenger ground transit between 2010 (when Uber launched in San Francisco) and 2013, and in the two industries linked with traveler accommodation from 2009 (the year AirBnB opened). These increases amount to thousands of workers earning a living in some way (either supplemental or in full) because of these platforms. Because of the way income activity is reported, this is almost certainly an undercount—representing a lower bound on activity. This suggests an increase in the number of contractors employed in these industries.

Second, we do not see declines in payroll employment in the same industries during this period. Instead, we actually see increases in all four—particularly in the passenger ground transit sectors.

Caution is needed when interpreting these figures. Nonetheless, such strong employment growth contradicts the idea that Uber drivers are pushing incumbent firms out of business. Instead, it lends credence to the story behind Uber’s founding, and the experience of San Franciscans at the time (myself included)—Uber and other peer-to-peer ride services like Lyft were meeting unmet consumer demand in a city with a massive shortage of taxi services.

Finally, these figures suggest that the trend toward contractors over payrolled employees in the taxi and limousine industry was going on in San Francisco long before Uber’s arrival. If the employment security of drivers is truly the issue, perhaps the debate has to expand beyond concern over platforms like Uber.

Read the full story at The Gig Economy Is Real If You Know Where to Look

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