There are many ways of looking at “the gig economy” — the idea that people will make money in the future by picking up short-term, project, or shift work as necessary — but the two most prominent are as follows:
1) The gig economy gives people greater flexibility and choice in how and when they earn money, allows them to put assets like cars and houses to use, and gives them a vast array of chances to supplement their other income.
2) The gig economy represents the mass adoption of exploitative labor practice that deny workers compensation, benefits, stability, or the ability to plan for a future. It is a house of cards propped up by extravagant promises and VC funding.
I lean toward that second option, but that doesn’t really mean anything, because we’re going to get the gig economy whether we want it or not. Bloomberg has a great piece about the complex app ecosystem for the gig economy: apps that help workers juggle the multiple obligations that themselves were facilitated by apps. Snagajob, an HR startup, has snagged (lol) $1.2 billion in venture capital funding so far.
“What we are really building our business on is the blurring of the line between snagging a job and snagging a shift,” CEO Peter Harrison said.
The rise of the gig economy is complicated and overdetermined, but it plays on recent economic and technological themes: the precarious position of low-wage workers, the concentration of money in the upper reaches of income distribution, the increasing sophistication of logistical software, and the concurrent reliance on markets of various kinds to make determinations in nearly all fields of human endeavor. The gig economy makes sense to tech startups because it can be built on top of ever-more-elaborate software.
But just because the gig economy “makes sense” doesn’t mean it works. Shady pricing has placed an entire subset of on-demand apps like Postmates and DoorDash, which rely on couriers, under scrutiny for making offerings seem more affordable than they really are. On-demand startups are predicated on the idea of becoming a habit, not a luxury.
Uber is extremely popular, but it also lost more than a billion dollars in the first half of this year. Its fares are cheaper because it uses investors’ money to subsidize drivers. For that matter, Uber is also in the midst of a huge class-action lawsuit over whether its drivers do in fact qualify as employees (a judge recently threw out a proposed settlement in the case, calling it unfair).
Gig startups like Uber aren’t cheap because they have a better business model, they’re cheap because they’ve got money to burn. Tech companies in the gig economy are spending their ways into normalcy. And then apps like Snagajob are stacking themselves on top of those already volatile companies.
There is a devious sort of vocabulary around these sorts of startups. From Bloomberg’s report:
Snagajob’s Harrison says companies are “essentially sharing workers” much the way consumers are sharing car rides and vacation rentals.
Thanks to the gig economy, workers have even greater freedom to be treated as tools.
