The Gig Economy: A Step Along the Entrepreneurial Path

Today, anyone can work for themselves to begin their entrepreneurial journey. Uber, Lyft, Taskrabbit and many other online platforms contribute to the ever present gig economy. These platforms allow people to earn money on their own time and in their own domain, whether it be their cars, homes, or favorite coffee shops. The gig economy allows ambitious service providers to enjoy some of the benefits of being an entrepreneur without the responsibility of owning firms and reporting to stakeholders.

On Friday, October 14th, the ILR School hosted Katherine Stone, a faculty member at UCLA Law, to discuss the implications of this new domain. She enumerated on three main concepts:

The gig economy leads to variable pay.

Katherine Stone

Katherine Stone

Like an entrepreneur, there is little certainty in being an Uber driver or flexible task-taker on Taskrabbit. Individuals offering their services on these platforms are not directly obtaining customers or pay – these transfers are made through an app, often on mobile devices. Service providers on these apps are independent contractors and do not receive benefits as apart of their employment.

This is a new domain for government and union intervention.

Government and unions have frequently stood as a force protecting laborers from abuse and advocating for fair pay in the workforce. They also have protected senior workers and helped people find and keep long-term jobs. Now, gig economy service providers are not protected by minimum wage laws and can be threatened by other providers on the applications that offer the same service for lower costs. Although this competition drives down prices for consumers, service providers struggle to find a balance between competitive prices and fair ones.

Collective bargaining is possible in the gig economy.

Stone suggested gig economy platforms create forums where service providers can convene and advocate for themselves. For Uber, Stone suggests Exclusive Driver Representatives – one driver represents three other ones and themselves at forums negotiating pay, hours, and city regulations. Cost of living and minimum wage varies by area, so having local forums would be useful to discuss region-specific issues.