Week of October 28, 2018 — This Week in the Gig Economy
In this publication of This Week in the Gig Economy, we’re covering topics ranging from the Future of Work, large trends in the Labour Market, and the latest developments with large gig economy companies. Without further ado:
Future of Work
There are tons of tech companies which are inadvertently disrupting craigslist, and there are lots of new companies which are slicing and dicing the huge job section. Here are some new players carving out niches within the recruitment space:
- Upwork is the leader within the professional freelancing industry ($560B global market), and they facilitated $1.5B worth of transactions last year alone.
- Two British doctors founded Patchwork. Their platform helps hospitals better manage their demand for locum physicians (temporary physicians). The NHS (Britain) spending on agency locums increased from £2.2 billion in 2009/10 to £3.7 billion in 2015/16, although recent progress has been made in cutting around £700 million from agency locums spending to around £3 billion in 2016/17.
- In a similar vein, IntelyCare, a Massachusetts-based nurse-staffing platform for long-term care, assisted living, and rehabilitation facilities, has raised $10.8 million from venture investors, less than a week before voters weigh in on a new state mandate hospital for patient-to-nurse ratios.
- Wyndy’s is a new mobile platform which allows parents to find a sitter who matches their criteria, whether that means availability, rating or even a specific college major. After finishing their applications and passing background checks, sitters can use the app to search for safe, reliable part-time work.
- Rynly is a Portland-based startup which is pioneering a new trans-metropolitan shipping service where locals make the deliveries at a much lower cost than the established carriers. The advantage for a platform like Rynly is that they have a dynamic, flexible workforce (minimizing overhead), unlike the mainstays Fed Ex and UPS.
If you’re interested in seeing which occupations have made a shift to online labour platforms, check out this chart which breaks down occupations by skill level.
In a somewhat related topic, there’s a new startup which lets you swipe to borrow a pet targeting busy professionals.
Trends in the Labour Market
A new report says that 1 out of 3 people in the American Labour Force worked as freelancers in 2017 (that’s a whopping 56.7 million people). A 2016 McKinsey report found that up to 162 million people in Europe and the US — 20–30% of the working-age population — engage in some form of independent work, whether out of choice or necessity.
This rising trend benefits job seekers, and businesses. Job seekers are free to switch jobs, and try to find gigs that they really enjoy. At the same time, businesses save on the overhead expenses of regular full-time employees (benefits, insurance, etc.,). A Harvard Business Review article corrects common myths surrounding the gig economy, and shows that Gigs are better for everyone as they are more fulfilling.
An analysis on the labour market the UK revealed the following trends (similar trends are occurring in OECD countries):
- Wage pressures are rising, as employers have to pay more in order to recruit in tight labour markets
- Employment growth is being driven by older workers (people over 65 years old)
A new report conducted by the Conference Board shows that the tight labour market is stagnating growth in the gig economy. Online labor platforms continue growing but remain a tiny share of the labor market outside the transportation sector. The primary reasons behind the stagnating growth in the gig economy are the tight labour market, slower rate of outsourcing since the 2000s, operational challenges of outsourcing certain tasks, and out-dated public policies which support “traditional” work.
Given the rise of the gig economy, experts are recommending working as a temp worker. Taking on a temp gig helps job seekers build valuable work experience, and size up various employers in different industries to see what roles may suit your given work style and career goals.
Now might be the best time to take on a temp gig, as employers are facing the crunch from the tight labour market. As companies scramble to meet their seasonal sales spikes, they are paying premiums to hire temp workers to fill the void on their teams. There are thousands of jobs that need to be filled, and its a job seekers market with near record low unemployment rates in OECD countries.
The provincial government in Ontario is taking action to roll back the recently passed Bill 148. Premier Doug Ford and his party are seeking to pass Bill 47, which would make temporary staffing more attractive to employers. At the same time, a new study from Australia finds that unclaimed wages for migrant temporary workers is more than $1B AUD. It’s clear that employers desire pro-temporary staffing public policy reforms, but the government needs to find a way to monitor temporary staffing engagement data in a proactive manner.
Troubles for Gig Economy Players
Blow back for Uber CEO, after he tried to compare his company’s low-wage system favourably against Pimlico Plumbers. Uber CEO tried to compare his contracted drivers to the Pimlico Plumbers self-employed contractors, but got hit with a direct response from Pimlico boss:
“What a cheek! Too right our model is different to his. Uber drivers are paid so badly that some argue they’re perilously close to getting less than the minimum wage, and yet are still expected to take care of their own sick pay and holidays.”
That’s not the only trouble Uber faces, as it is facing a UK Court of Appeal case in what will be a landmark gig economy workers’ rights case. The taxi company argues that its 70,000 drivers are self-employed meaning that they are not entitled to basic workers’ rights including holiday pay and the National Minimum Wage. Uber’s argument is that it is merely an agent, connecting drivers with passengers. GMB, the general union representing Uber drivers, estimates each worker has been losing at least £18,000 (approx. US$23,000) in unpaid remuneration over the past two years while Uber continues to question the decision of the courts.
Meanwhile, competitor Lyft is also facing a class action lawsuit surrounding the mis-classification of it’s drivers. Uber won a similar lawsuit this past September. The case — Wickberg v. Lyft — is taking place in Massachusetts, as spotted by Ars Technica, and it is being litigated by the same lawyer responsible for the previously-mentioned Uber case, Shannon Liss-Riordan. Liss-Riordan is aiming to use plaintiff Erick Wickberg as a representative for a full class of Lyft drivers who want to become full or part-time employees.
By the way, if you’re curious to know what the biggest differences between the two ride-hailing giants is, check out this research conducted by Alex Rosenblat who rode more than 5,000 miles in Uber and Lyft rides to figure it out.
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