Covering the Gig Economy

by March 23, 2016
Lyft-by-Sergio-Ruiz

Companies like Lyft and Uber are popular digital applications that have become notable players in the gig economy. Photo via Flickr user Sergio Ruiz.

There’s plenty of coverage on the gig economy: good, bad, “disruptive.” But at the center of the gig economy is the shifting way the American worker participates.

Here are some things to consider and explore when reporting on the new opportunities and challenges facing workers, consumers, employers and regulators in the gig economy.

Scope and Reception of the Gig Economy

Time Magazine, in coordination with public relations firm Burson-Marsteller and the Aspen Institute, published survey results on the size and scope of the new gig economy. The online survey found that nearly 22 percent of U.S. residents have offered services using these platforms.

The Bureau of Labor Statistics releases a report about the current climate of U.S. employment on the first Friday of each month. The reports highlight the unemployment rate, but many economists point out the official unemployment rate isn’t a full snapshot of the health of the labor market. It doesn’t include the underemployed or those who are working in fields outside their expertise. The Time survey found that only 7 percent of those workers surveyed relied on work from apps as a primary source of income. More than 32 percent surveyed relied on the service for not more than 40 percent of their income. These were considered “casual workers.”

The survey explores use and feelings surrounding the growing industry. You can use it to add national trend context for your story.

Talk with your Uber driver, the handyman or cleaner from TaskRabbit, or the couple hosting you at an Airbnb for their perspectives on gig work. Also reach out to other workers using digital platforms connecting services to consumers to learn about their experiences. Are they self-described casual workers? Are they underemployed or looking to supplement their primary income? Worker anecdotes can contextualize your reporting.

Income Volatility and Gig Economy Options

Many Americans face volatility in pay in the post-Recession economy: They may face instability of work, receive varying amounts paycheck to paycheck or receive paychecks at an irregular frequency. The JPMorgan Chase Institute released a study in February finding that nearly all income groups experienced a loss of real income since 2009, and many experienced these kinds of income volatility.

The analysis also explored how Americans manage that income volatility. It found that people experiencing work instability leaned on the app-based gig economy for income. Use of labor-based gigs (driving for Lyft or fixing a table using Handy) increased rapidly, and proved a better option to weather instability than relying on credit cards, the report showed.

Look into the benefits of the gig economy for people who experience income instability in their  regular work or who use the apps for supplemental income between seasonal work.

Labor Laws and Misclassification Lawsuits

One prominent issue dogging the growing number of technology companies developing applications to participate in the gig economy is the app’s relationship to employees. Many companies assert that their platforms connect consumers to service providers (independent contractors). In contrast, the Department of Labor says they need to evaluate the platforms individually to understand whether their workers are employees or independent contractors. Generally, the criteria weighs the relationship between the worker and employer, and how much agency a worker has over the work.

The contention is playing out in court. Companies like Uber and Lyft are facing prominent class-action suits in California, but a number of startups have faced similar lawsuits from workers over misclassification.

Many experts call for adapting labor laws to the new realities of a gig economy, and lawsuit rulings and new legislation will change the way workers, consumers and technology platforms interact. That story is unfolding now. You can speak with economists and labor experts in your community to explore the changing needs for regulation in your own community.

Traditional Employment Models Versus the On-demand Economy

On the flip side, some companies are already changing employment status from independent contractor to employee. A recent feature in International Business Times explored cleaning, laundry, delivery and grocery apps already classifying workers as employees and the business motivations behind the move.

Hometeam, an app for patients of the home care industry, goes even further. The technology startup employs its caregivers as employees and provides them with health care and retirement plans. Executives actually pay employees above industry standards, hoping the company will professionalize an industry already shaped by its reliance on 1099 workers.

Investigate the experiences of employees of tech companies like Hometeam. Explore workers’ relationships to employers and if there are any tradeoffs to flexibility when classified as an employee rather than independent contractor.