Leveraging the gig economy

The news about protests of taxi driver, independent workers, labor and housing activists have painted a not so positive picture about the giants of the gig economy like Uber, Airbnb. Those companies become the targets of criticism for not only their disruptive business models but also their dodging taxes and regulations, which enabling them to expand aggressively and reach billions market capitalization. Instead of criticizing these kinds of models and proposing imposing the regulations of traditional business on those companies, the article argues that “Employee” status will ends most gig-economy jobs and how policy makers should embrace the gig economy’s uniqueness and benefits, not constraining its development.

The survey results with Uber drivers have some important indications. Firstly, they implies that the reasons many workers choose gig economy companies are voluntary due to more flexibility and complementary income, differentiating it from involuntary part-time employment, which often stands for idle labor resources and inefficient labor market. Secondly, the results show that Uber in most cases has positively impact the workers in term of income, financial security, life quality, and confidence. Hence, the appearance of those companies has enhanced labor mobility and enriched both consumer and worker experience in today’s tech-driven environment. Yet, I would like to do further research on the worker group that has negative experience during their partnership with Uber. The first thing to look at is to examine if there is any difference between the two groups about their current financial situations, educational background, and demographic characteristics such as gender, age, and race. If those discrepancies exist and are the sources of their dissatisfactions, which probably lead to their anti-Uber protests, then it is crucial for to address and solve those issues.

As the benefits gig economy offers to its workers center around flexibility and income supplement, bringing something like the minimum wage and overtime work will immediately deteriorate the gig economy’s uniqueness and advantages. If the companies are required to have more responsibility and control over it workers, it is no guarantee that the workers receive the same benefits and freedom as the companies may aggressively minimize its operation cost and maximize its profits. This poses a challenge to tax and regulatory authorities and should be a valuable opportunity for them to revise the legal framework. Are the current laws the optimal ones given the invasion and rising popularity of platform-based businesses? The article proposes three recommendations:

1. Clarify “independent contractor” status under federal law
2. Create a temporary safe harbor for gig-economy jobs
3. Create benefit equality for the self-employed

In addition to what the author recommend, I believe that the government should change their perspective toward both the gig economy and traditional business. They should not apply more restrictions on the gig economy but lessen regulations on traditional business or eliminate the bad practices. For instance, the article points out that “Many cities require government-issued medallions in order to operate a taxi”. Since this requirement puts worker under long working shifts and great pressure, the cities should adopt a better way for taxi regulation. By doing that, the authorities can ensure that both types of business can compete on the same level playing field and change the perception that gig economy companies are unfairly taking advantage of the law’s loopholes.

References:

Sherk, James. The Rise of the “Gig” Economy: Good for Workers and Consumers. Retrieved October 21, 2016 from http://www.heritage.org/research/reports/2016/10/the-rise-of-the-gig-economy-good-for-workers-and-consumers