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Your Uber Driver Probably Has Another Job

Justin Fox is a Bloomberg View columnist. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
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What is the defining characteristic of gig-economy workers? Probably that driving for Lyft or assembling Ikea furniture via Handy or selling knitted leprechaun outfits for babies on Etsy isn’t the main thing they do or the main way they make money.

QuickTake The Sharing Economy

I've been looking at three in-depth studies published recently about the much hyped but still mysterious gig or on-demand economy, enabled by Internet connections and ubiquitous smartphones, and this is perhaps the most strikingly consistent finding. On-demand work is something that people who already have jobs or other responsibilities (going to school, taking care of family members) do on the side. For example:

  • Of people who had earned income from one or more online labor platforms from October 2012 to September 2015, 82 percent got less than a quarter of their overall income from such work in September 2015, the JPMorgan Chase Institute found in a study released Thursday of 260,000 (anonymized!) Chase customers who received payments from online platforms. In the months that people earned money from a labor platform, it accounted for 33 percent of that month’s income, but the study found that gig workers often had months where they received no online-platform income. For those who earned income from online capital platforms (intermediaries that enable you to sell goods or rent assets, such as eBay and Airbnb), the percentages were 96 and 20. There was little overlap between the labor platform and capital platform income recipients.
  • Among 4,622 on-demand workers surveyed in September and October for an Intuit report that came out in December, such work accounted for 22 percent of household income. Forty-three percent of those surveyed also had traditional full- or part-time jobs, 39 percent were small-business owners, 19 percent were family caretakers and 11 percent were students (respondents could give more than one answer).
  • Of 701 “informal” workers identified in the Federal Reserve Bank of New York’s Survey of Consumer Expectations in January 2015, 74 percent of the men and 60 percent of the women also had full-time jobs, and 13 percent of the men and 20 percent of the women had part-time jobs. This survey was done on behalf of three researchers at the Federal Reserve Bank of Boston, which published the results in October.

So the gig economy is composed not primarily of, say, Taskers (what TaskRabbit calls its runners of errands and organizers of closets) scampering from one job to the next for 10 hours a day. It is made up instead of people like the archetypal "diversified worker," described by the Freelancer's Union last fall as "someone who works the front desk at a dentist’s office 20 hours a week and fills out the rest of his income driving for Uber and doing freelance writing."

These on-demand workers tend to be middle class: The average household income of the informal workers the Fed surveyed was in the $60,000 to $75,000 range for men and $40,000 to $50,000 for women (median household income nationwide is $53,657). They also skew young: In the JP Morgan Chase Institute study, 36 percent of the participants in online labor platforms were in the 25 to 34 age range (as opposed to about 22 percent of the labor force).

Moreover, while their numbers are growing fast, on-demand workers still pretty small as a share of the overall population. Here's the JPMorgan Chase Institute's estimate of the percentage of U.S. adults earning income from online labor platforms and from online capital platforms over the past three years:

source: JPMorgan Chase Institute

The on-demand economy, then, is so far mainly a way for youngish middle-income Americans to supplement their incomes. That's great -- their incomes have needed supplementing! It also seems wrong to label all gig work exploitative when so much of it is being done by people who have other jobs and, presumably, other choices.

On the other hand, online gig work doesn't seem poised to take over the labor market, and it may have only limited potential to pull some of the millions of people who have fallen out of the labor force in recent years back in. Last month a couple of conservative thinkers proposed what they (or a Politico headline writer) called "Uber for Welfare." The idea was that the government could require benefit recipients to, for example,

deliver goods and groceries for Postmates and Instacart, assemble furniture on TaskRabbit or mow lawns and plow driveways with PLOWZ & MOWZ. Or if they have the know-how they could offer photo shoots, voice lessons, mural painting, tennis lessons, or painting a house on Thumbtack.

That'll be great for all those former tennis pros and opera singers on welfare, that's for sure! And more generally, on-demand work seems geared toward people who already know their way around the workplace and the Internet. Which is likely true of most work these days.

One other takeaway from these surveys is that more people are probably working multiple jobs, even though the official count of multiple jobholders doesn't really show it. If you earned $500 one month delivering groceries, then did no more deliveries for the next few months because you were busy with your main job, would you put down on a government survey that you have multiple jobs? Probably not. But you really kind of do. We're still a long way from becoming a nation of Hedleys -- the West Indian immigrant family from "In Living Color" in which every member had at least five (or was it six, or seven?) jobs. Something is changing about the way we work, though.

  1. This includes more than just people working through online on-demand platforms, although according to the study most of the tasks are "Internet-based." 

  2. Obviously it's also a way for people to get rides across town and for venture capitalists to make lots of money, but I'm focusing on the labor side here.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Justin Fox at justinfox@bloomberg.net

To contact the editor responsible for this story:
Zara Kessler at zkessler@bloomberg.net