Think the Gig Economy is of Interest Only to Small Tech Outfits? Big Companies Are Diving in, Too.
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Uber’s recent call for Washington state leaders to provide contract workers with access to health benefits reflects how the gig economy is transforming the nature of work. Policymakers should heed this call and force a conversation around how to better support those working in the industries of the future; they should also consider how they can adapt workforce policies to enable small business owners and entrepreneurs in more traditional industries to provide their workers more economic opportunities.
Clearly, the gig economy is here to stay. Tech companies like Uber, Handy and TaskRabbit -- which was acquired last year by the Swedish retailer Ikea -- are rapidly growing and offering opportunities for individuals to take on a variety of jobs to earn a living or make some additional income on the side.
According to a 2016 study by McKinsey & Co., roughly 30 percent of working-age Americans are already engaged in the gig economy, and some labor experts predict that that economy, with its freelance workforce, could make up the majority portion of the American workforce within a decade.
Uber's suggestion to the Washington State
As the gig economy, in tandem with automation and artificial intelligence, continues to alter the very definition of work in the 21st century, policies governing our workforce must evolve with it. The letter Uber CEO Dara Khosrowshahi wrote with SEIU leaders urging Washington state to create a “portable benefits system” model was a step in that direction.
The portable benefits system model would provide gig economy workers with access to health and retirement benefits as they move from full-time work to part-time contract or freelance roles.
And, while portable benefits may or may not be the best solution, it’s a great starting point for this conversation. The ultimate implementation of any new system like this one will require wholesale changes to state and local laws. In the portable benefits scenario to succeed, for instance, laws would have to be adjusted to allow contract workers to transfer benefits between jobs.
The public dialogue on this topic portends a radically different system of just how aging state and local labor policies may have to eventually adapt to a dramatically changing American workforce.
And, while most people may think that the "gig economy" and contract work are proliferating only in the tech sector, they're misinformed. Here are three ways traditional companies also are exploring ways to tap into the gig economy, even possibly offering their workers voluntary “Uber-style” opportunities to make more money alongside their day-to-day roles.
1. Staffing up during peak hours
Companies across a variety of industries, from retail to warehousing, are turning to work-on-demand platforms to augment staffing during their busier seasons. Papa John’s locations, for instance, posts one-off pizza delivery gigs on the app Wonolo whenever the pizza giant's staff is stretched, on particularly busy days.
2. Crowdsourcing for additional deliveries
Retailers, in particular, are exploring how they can offer opportunities for individuals to earn additional money by making home deliveries. Programs such as AmazonFlex allow people to deliver local Amazon orders, while Walmart is piloting a program that gives its employees opportunities to make deliveries on their way home from work.
And it's still early, but observers are also wondering about just how Ikea may look to integrate TaskRabbit into its customer services.
3. Bringing on flexible hires
Many of the largest companies are now turning to online freelance services to add flexible hires during those companies' busiest seasons. Samsung, for example, has partnered with freelancing platform Upwork to staff quick turnaround projects, which has reduced administrative costs while fitting the tastes of younger, more collaborative workers.
All interesting enough, but these moves beg the question: As more companies experiment with the gig economy and offer these types of new income opportunities, will they run into existing workforce rules, such as wage, overtime and benefits laws?
The gig economy already accounts for nearly $800 billion in spending, and as this work increases in popularity, policymakers will need to explore how current rules must adapt to meet the demand for these types of jobs -- for both workers and employers.
In the end, there is no question that our economy and workforce are in the midst of a transformative evolution that is providing new economic opportunities for millions of Americans. But, for more people to benefit from these opportunities, workforce policies on the local, state and federal levels must increasingly keep up with the dramatic pace of change.