2015 has been the year that the on-demand economy became entrenched in our daily lives. From delivery, transportation and household errands, to professional services and consulting, the on-demand economy has been broadly adopted, especially in urban centers.
2015 has also seen the rise of an important debate about how best to support people working on-demand jobs. This debate has commonly focused on worker classification, asking the question: Should people engaged in on-demand work be considered employees or independent contractors?
As we move into 2016, this discussion will only gain momentum. That’s because the number of people working on-demand jobs is expected to grow from a current pool of 3.2 million Americans to 7.6 million by 2020.
I believe that 2016 will also be the year that this debate changes focus. Instead of trying to categorize workers, I believe the debate should focus on how best to empower people working on-demand jobs,
We’re already seeing examples of the evolution of the debate. Senator Mark Warner (D-VA) and former Gov. Mitch Daniels (R-IN) recently called for policy makers to take a measured approach in order to preserve “the promise of innovation, the power of markets and the opportunities of entrepreneurship.”
With this fresh perspective in mind, here are four predictions for how the on-demand economy debate will evolve in 2016.
1. Instead of employee versus contractor, the debate will focus on the future of work.
From class-action lawsuits to new worker classifications and on-demand worker unionization, the employee versus contractor debate has been central to discussions about the on-demand economy.
As more data becomes available in 2016, this debate will become increasingly nuanced. For example, recent research shows that the average on-demand worker spends 12 hours a week working for his or her primary on-demand platform. Additionally, nearly half, 43 percent, receive a paycheck from a traditional full or part-time job, and only 5 percent indicated that they derived all of their income from a single on-demand platform.
The idea of one traditional job sustaining a family is becoming a relic. As more and more data exposes this trend, the employee versus contractor choice is going to be seen as increasingly outdated. The debate will instead focus on empowering those who take control of their careers by juggling multiple jobs.
2. The on-demand economy will be a factor in the race for the White House.
The on-demand economy is but the latest spike in a 30-year trend toward increasing self-employment. The contingent workforce in the U.S. was 17 percent in 1989 and is forecast to reach 43 percent by 2020. This is a profound structural change to our labor market that demands attention at the highest levels of government.
In 2016, presidential candidates will acknowledge the need to speak to the needs of the growing ranks of the self-employed. Indeed, the 2016 election may be the last one in U.S. history before the self-employed comprise a majority of the voting electorate.
Ideally, the presidential debate will include a mature discussion from leading candidates of both parties about how to provide stable benefits for people who chose to pursue on-demand work or self-employment while also providing innovative companies with the space to continue creating jobs, wealth and opportunity.
3. The on-demand economy will no longer be defined by ride-sharing and delivery services alone.
To date, most attention on the on-demand economy has focused on companies operating in the transportation, delivery and home services industries, like Uber, Lyft, TaskRabbit, Instacart, DoorDash and Handy.
In 2016, we will see an increasing focus on-demand platforms that offer professional services such as consulting, legal expertise, copy writing, graphic design and human-resources services.
This will further entrench the on-demand economy in society, as large companies change the ways in which they conduct business, looking to on-demand providers for services that traditionally took place in-house.
4. As baby boomers continue to retire, the age of on-demand workers will increase.
New research from Intuit has found that people working on-demand jobs skew young. In fact, just 1 percent are seniors aged 69-plus. The bulk are 18 to 34 (39 perent), 35 to 51 (36 percent), or 52 to 68 (24 percent).
However, as more and more Baby Boomers retire, we expect to see the average age of those working on-demand economy jobs to increase with retirees looking to supplement their savings and take advantage of the flexible work conditions.
In 2016, on-demand economy platforms will increasingly engage and incentivize this unique demographic pool of potential workers.
If I have one wish for 2016, it’s that we’ll embrace the positive opportunities that the on-demand economy provides and that will view it within the broader context of a changing labor market. I believe that this is the first step toward a mindset shift that will allow us to build the new tools and infrastructure needed to support the growing self-employed workforce.
I look forward to a more informed, nuanced and productive discussion in the year ahead, as we begin to understand the vital role the on-demand economy can play in powering a new generation of entrepreneurs.