The Uncertain Future of the Gig Economy

In recent years we’ve seen a revolution in e-commerce, as web-based “gig” companies began to enable anyone with a mobile device to connect on demand with a multitude of services. Companies such as Uber, Caviar and Grubhub have enabled anyone in need of income and flexible hours to turn their skills into steady cash.

Studies have found that 44 percent of adults in the U.S. have participated in on-demand transactions, and 22 percent, or 45 million, have offered some kind of goods or service as part of the gig economy. An estimated 600,000 workers regularly work through an online gig economy platform.

Critics point to the fact that most of the workers are classified as independent contractors rather than employees, and as such are forced to go without many benefits and legal protections that have been afforded to employees for decades. Proponents of the gig economy argue that the flexibility and ready availability of customers that gig companies provide outweigh these concerns, a view shared by many of the workers themselves. Gig companies do provide many benefits to workers, mainly a well-established, functioning and effectively-marketed platform that provides a steady stream of consumers.

Policy proposals include legislation creating a new class of workers, and temporarily halting wage and hour lawsuits while Congress and regulators adopt a comprehensive regulatory scheme tailored to the industry. This subject will doubtless become an area of focus for the incoming presidential administration.