Freedom of the Gig Economy are Overhyped

“Work when you want and be your own boss.”

That is the promise of the gig economy. A general belief that you can work at a time convenient for you. You are in control. You decide when you want to work. In reality, this romantic notion is far from the truth. We learned this first hand while developing JobsNow.io

(The Gig Economy encompasses many areas of the workforce. I am especially referring to the drivers and delivery workers for on-demand companies like Uber and Postmates)

At its peak (around summer 2015), new startups in the on-demand space were launching almost on a daily basis. The ‘uberization’ of almost every conceivable services. As a consumer, you can basically have anything delivered or picked up within the hour. This opened up many opportunities for new workers to fulfill the demands.

Happy consumers and job creation. Yay!… not exactly. Demand was growing at a faster pace than workers can be recruited. With a potential finite pool of workers, new creative solutions were developed and introduced. Surge pricing during peak hours to limit demand. Stack delivery (where multiple orders from the same restaurant or along the route were ‘stacked’ with a single delivery driver) to improve worker efficiency. All at the cost of the consumer experience.

On-demand companies strategically attempted to expand the worker pool. Outreach to non-typical demographics (white collar workers, retirees) and targeted local communities with non-English campaigns. Deep pocketed companies ran print, billboard and TV ads with promises of bigger bonuses, guaranteed earnings or shifts. These were unsustainable solutions that struggled to match the macroeconomics of the business. With burn rates in the millions and billions — many smaller on-demand startups fell to the side.

Market economics suggest that a workforce in demand means greater earning power. Unfortunately, most of these on-demand gigs consist of low and fungible skills, which meant a low pay ceiling. To stop the bleeding and churn, companies started to add earning restrictions. Examples include weekly minimal driving hours or a requirement to work the commuting hours. The ‘flexibility’ of the worker starts to crumble.

Workers do not have a 24/7 open schedule. The notion that they can switch on/off to work is quite untrue. No one is sitting in the house waiting for work to come calling via their mobile app. Many of these workers choose the gig economy because they need work that matches their own schedule, that is typically very predictable and restrictive. A mom with free time at lunch or the student during summer break. Or a side job to supplement income from an existing job (further limiting the availability of the worker).

Demands are driven by market forces. Dinner time for food delivery. Bar closing for rides. Many on-demand companies optimize for workers based on location. So unless you live next door to Taco Bell or a popular bar, you are not going to get a job request just sitting at home. This is not just limited to delivery. Next time, ask your Uber driver where he lives. Most drive many miles into dense metro areas for work.

These factors all limit the ‘flexibility window’ of the worker and what they can earn. Just because you are available for work at 8 am, does not mean you will work and earn.

It is no secret there is a huge worker churn rate in the on-demand industry. Mostly because we are selling the ‘freedom’ of the gig economy and not the reality. We need to set the expectations. There are many happy Uber drivers who are ex-yellow cabs — they have clear expectation and experience of driving people around. Can the same be said for those coming into the industry? Do food delivery workers realize they may be standing in long lines at restaurants? Or circling the blocks for parking?

Maybe the term ‘gig’ has too many unfilled promises and expectations. Schedule, availability, and locations are major factors on the freedom and the earning potential of the worker. To earn, a worker needs to match the schedule of the market demands and not their own schedule. If they align, you have the ‘freedom’. If not, you don’t work.