The gig economy is frequently criticized as exploitative. People with few options pursue opportunities that don't pay or treat them fairly, the story goes. And it's a trend: More and more Americans find themselves working contingent jobs, without the stability of standard 9-5 employment. Meanwhile, Uber is valued at $72 billion.
But it's actually not that simple. Reality, as ever, is complex, and gig work has upsides as well as downsides.
In late April, prestigious venture capitalist Bill Gurley blogged enthusiastically about the flexibility and autonomy available to Uber drivers. "It is unheard of for an employee to say 'I want to work 3 hours this week, 45 the next, and then take 2 weeks off," Gurley wrote. "This autonomy and freedom of the 'gig' work type, which is highly valued by millions and millions of people, would be impossible to implement for the overwhelming majority of companies."
He has a point: If you have freelancing experience, you know how great it is to make your own schedule. On the other hand, you also know the anxiety of constantly hustling for the next check. In pure material terms, Americans are doing quite well, but being a contingent worker beholden to customer ratings is nerve-wracking.
Researcher Greg Ferenstein, in a report funded by policy outfit Tech4America, shares Gurley's sunny view. The gig economy is "potentially the world's largest job training resource," according to Ferenstein. He explained:
"It is a myth that 'gig' work is less secure: research finds that while on-demand platforms are associated with higher income volatility, there is lower consumption volatility, as workers use side work to make up for unexpected expenses or reduced work hours in their primary employment. As well, long-tenured self-employed workers tend to have as much work as long-term wage workers. Artificial labor classifications like 'self-employment,' 'employee,' and 'apprentice' mask a common occupation path that starts out as part-time training wages and gradually elevates to full-time senior wages, which takes about five years."
In an essay summarizing his findings for the Brookings Institute, Ferenstein said, "Indeed, all across America, there are individuals and cities thriving through technological change; a common pattern among the most resilient regions and workers is an unusual volume of mixing self-employed skilled and lower-skill wage work."
The data indicates that a gig economy job isn't so bad. Being part of the contingent workforce is likely better than not being part of the workforce at all. On the other hand, there is a pervasive feeling of precariousness among Americans, just as evident among city-dwelling Millennials terrified by their student debt as it is among the residents of stunted Rust Belt towns wracked by drug addiction.
Kathy Kristof has children in their mid-twenties who are building out their professional lives. They're all grown up, technically, but she still worries about them, she told Inc. in a phone call, and their entire generation. Job growth in recent years has substantially offered the kinds of work without health insurance, or even basic stability. The default example? Driving for Uber -- although more mundane forms of subcontracting dwarf the gig economy.
As a longtime consumer finance journalist, Kristof starting looking into the market for contingent labor. She found it infuriating that many gig economy services didn't even let workers see the terms and conditions until after signing up. She was even more appalled that people's accounts on a given platform could be frozen arbitrarily, and they'd never be able to withdraw the funds they'd earned. Adding insult to injury, Kristof noticed most gig workers have to agree to private arbitration, which substitutes a mediator in place of the more robust court system.
Kristof decided she could help address the information gap and power imbalance. She launched a business called SideHusl, hoping to guide people to the best, most lucrative opportunities. Kristof joins other entrepreneurs, like The Rideshare Guy, who cater to the workers in this niche.
Here's a hypothesis: Donald Trump's "Make America Great Again" message resonated so much in economically downtrodden parts of America in part because of societal shifts like this. You lose your familiar full-time job, and the technocrats tell you that you should be grateful for the flexibility to cobble together a living for five years, at which point you might reattain your former income.
Or you graduate from college and realize that the American Dream you had in mind is prohibitively expensive, so Bernie Sanders starts to sound like your only hope.
If the events of 2016 onward have taught the American elite anything, which is debatable, it should be that a data-informed mainstream consensus doesn't fully capture how people feel about their lives. And this applies as much to the surge of contingent labor as it does to conventional politics. Neither VCs' optimism nor reporters' pessimism is likely to be wholly correct.