Who is “the Gig Economy”?

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Several recent news stories have suggested that the current pandemic is having an adverse effect on the gig economy. One recent article, by CNN Business, Gig Economy Companies Like Airbnb are Signaling Distress, suggests that gig workers who work for Uber, Airbnb, and Lyft have seen a dramatic drop in clients. This has placed these corporations under some financial stress.

That said, the same article also suggests that those who do home deliveries for companies like Instacart and DoorDash have seen a dramatic increase in work opportunities. So, while there are signs that some industries are negatively impacted, others improve, and gig workers are able shift when needed.

What seems to occur is that there is a shift in what consumers need and are willing to pay for during a pandemic. Companies that are agile like Uber will need to realign their services to meet those needs (hence Uber eats, their food-delivery service which seems to be thriving right now). Gig workers who work in those service industries then make the shift to services that are in demand.

However, what seems to be lost in the message is that while Uber, Lyft, Instacart, and other similar companies consider gig workers as independent contractors, I would argue that they are not. While these workers do enjoy some work flexibility typical of gig workers, ultimately, there is a corporate entity that hands down requirements and the type of bureaucratic structure traditionally seen in large corporations with thousands of employees. Are these workers really part of the gig economy, or do they uneasily straddle both worlds?

The article also admits that it is traditionally hard to gauge the gig economy because of a lack of centralization. Therefore, articles such as this find their data from the larger service companies I mentioned above. Yet, it is precisely because these companies are structured like corporations that this data is available. Naturally, this calls into question whether we are really talking about gig workers and the gig economy, here.

Too often gig workers are defined by the mere fact that they are tethered via technology, such as an app that monitors their progress, their efficiency, and ultimately the profitability of their performance to the larger company. By that measure, perhaps we can also include Amazon drivers as gig workers. The company considers them independent contractors as well, but is that acurate? At what point to these workers lose any and all of the freedoms that are typically suggested as the biggest benefits of being a gig worker?

I think that we need to stop dancing around the white elephant in the room and just admit that those gig workers who perform the core business function of a large corporation are no longer just contractors. The new California Law Cal-AB5, which is trying to better define contract work in the state, may not be perfect, but at least it is attempting to address this discrepancy.

It would be more informative if we actually better understood who the gig economy really is. I do not really think it matters whether gig workers work full-time or part-time (another oft-quoted attribute of the gig worker). Ultimately, I think that gig workers should be considered small businesses. Finally, they are not just millennials, either, but are represented by all age groups. Another misconception is that they chose to do gig work, but many of them are actually doing gig work because they lost their previous job.

Perhaps we should consider looking beyond what Uber and DoorDash are reporting, which is largely a corporate reality not unlike the experiences that all corporations are reporting under this pandemic. Instead, we need to know what is happening with independent gig workers, those who are not tethered to a large corporation. Ultimately, we need to start including gig workers in the discussion about small businesses. When we do that, we will have a better understanding of what is happening in the gig economy.

That last point brings us to an important change we are now seeing in this pandemic. We are now seeing the highest unemployment numbers since the Great Depression: over 30 million people have filed for unemployment now. While it is possible that many of these people will find work again when the economy recovers, we do not yet know when that will be.

In the meantime, millions of these workers will look for work they know already, that is the work they did before they were furloughed and fired. However, they will now need to do this on a contract basis, and eventually as small businesses. Essentially they will quickly become part of the gig economy.

What we are witnessing is a huge influx into the gig economy. Sure, some of these gig workers may return to their old jobs if or when the economy recovers, but the reality is that many won’t. The gig economy may very well have doubled or tripled in a matter of a few short months. If only we could know by how much instead of focusing all our attention on corporate contractors for Uber and Doordash, as most news sources seems to be doing now.

That is not the gig economy.