Continuing the Conversation: Virginians Share Their Views About the On-Demand Economy
Not surprisingly, the concerns of Virginians about the challenges and opportunities of the on-demand economy appear to depend largely on whether they’re participating by choice or by economic necessity.
I recently invited Virginians to share their experiences with me, and more than 1,200 people told me their stories. Many of them offered candid, thoughtful messages about how the on-demand economy is working well for them. For others, contingent work is a necessity because of the loss of a job or other factors tied to the tough economy. A lot of Virginians offered helpful suggestions about how state and federal policymakers could help make the gig economy work better for more people.
Matt is driving for Uber while attending college on the GI Bill. “I struggled to be successful in college while also working full-time, so I enjoy the flexibility Uber offers in providing an income for my family,” Matt told me. “I realize we are independent contractors for the Uber platform, so the money earned should be invested wisely. But if you are giving full time hours to the company that is making millions, I would imagine some real benefits for their workers should be achievable.”
A new Virginia law requires drivers for Uber, Lyft and other ride-hailing platforms to register with the state, while also meeting certain other legal requirements, such as proof of insurance. I read the other day that more than 23,000 Virginians had registered to operate for a “transportation network company” with the DMV by the July 1st deadline: that’s more than four-times the number of traditional taxis registered in Virginia.
Certainly, the jury is still out on whether these opportunities provide as much freedom and flexibility as initially advertised. And, clearly, individual success can depend on the customer demand and even the size of the community where you live.
For instance, Bonnie turned to a ride-hailing service when she lost her full-time job after 18 years, but she lives in a relatively small Virginia community. “Uber was my only real option, and I had to make arrangements to even qualify to drive for them. I’ve been driving for them for a little less than three months, without a lot of success, but at least it’s some money coming in.”
I heard from many Virginians who have successfully turned to contingent work on a part-time basis, supplementing the full-time income of a spouse or partner, or simply creating additional economic security for their families by occasionally monetizing a room, a skill, or free-time. Others are doing it full-on, full-time.
“I am a full-fledged member of the new economy, and I am extremely grateful to live in this time,” says Janice, a single mother raising two daughters in the outer Northern Virginia suburbs. “Technology allows me to work from home most of the time. It creates amazing opportunities for myself and the people that work for me and with me. We are no longer tied to an office. We don’t commute. We work the hours that work best for our particular situations… The ‘new’ economy is a true boon for self-reliant Americans who want to live the American Dream.”
Much of the controversy about on-demand work centers on the lack of workplace protections and safety net services which typically have been linked to traditional full-time employment. That is one of my concerns, too. Many individuals find they are making a solid living piecing together two, three or more of these revenue-generating opportunities in this new on-demand space — until the day that the stuff hits the fan. That’s when they discover there’s no safety net to catch or assist them through the rough patches, and taxpayers ultimately could get stuck with that bill.
For Jordan, joining the gig economy was the best decision he’s ever made and he’s made his own arrangements to construct this ‘safety net.’ “Three years ago I quit my day job to pursue my dream as a self-employed photographer. I was forced to figure out how to file the taxes, make estimated payments, purchase health insurance, prepare my family for economic downturns, and put money away for retirement. Despite the new challenges I had to face, life is fantastic. We are free.”
But Pat tells me she worries about her daughter, who just graduated from college (with considerable student debt.) “My own feeling is the on-demand economy is a convenience for business to treat employees as disposable,” says Pat. “I have a daughter who works in the on-demand economy. She enjoys no benefits: sick leave, annual or personal leave, health insurance, or retirement. Her work hours vary between four and 26 hours a week, and the timing of her hours is all over the map… My daughter continues to have trouble trying to find and coordinate multiple jobs in this kind of ‘wild west’ labor market.”
As a policymaker, I’m worried about our nation’s combined $1.2 trillion in student debt, too. I worry it traps too many young people in jobs they don’t want, in fields they didn’t study for, simply because of their student debt obligations. I have pushed for reforms like income-based repayment to give young people more options when they’re starting out.
Will, who supported himself in college as a pedicab driver, cautions that additional rules and regulations could limit these economic options for others. “All the people I work with or know who run Etsy stores, drive for Uber or other taxi services, or otherwise participate in the sharing economy, do it as a gap filler,” Will writes. “My concern is that if more requirements are placed on companies that employ or foster work for kids like me, they won’t be able to allow the freedom and transience that we need these types of jobs for in the first place.”
I get the point, and I’ll keep Will’s warning in mind as I continue to listen and think about responsible policy responses to this dynamic — and growing — segment of our economy.
