Market Overview

The Winners And Losers Of The Gig Economy: Who Benefits From Uber And Lyft?

The Winners And Losers Of The Gig Economy: Who Benefits From Uber And Lyft?

Every time I hop on an Uber or Lyft, I ask the driver how many hours he works, if that is his/her only job, if the economics of the offering work for him/her [...] I always wonder, are they doing this to make a living or to make a few extra bucks?

Now, a Pew Research Center survey has shed some light on the issue. As per the report, 8 percent of adults in the United States made money from an online employment platform (i.e., ride hailing or laundry) in the past year. However, their motivations varied widely. While 56 percent of respondents said they needed those kinds of jobs to make ends meet, 42 percent stated they could live without the extra income, suggesting a more “casual” approach to the job.

Technology ethnographer Alex Rosenblat has been investigating Uber and Lyft employee management mechanisms, and driver trends for a couple of years now. In a recent Harvard Business Review article, he shared some of his conclusions:

"I’ve also found that the “ridehail” workforce spans many different types of drivers—from full-time earners to part-time workers and “hobbyists”—who drive for many different reasons. And I’ve seen that not everyone benefits from this work equally."

What has become clear, at least for the United States, is that most of the drivers in these two companies work only part-time for them, with more than half of Uber drivers allocating a maximum of 15 hours per week to the job. Moreover, less than 20 percent work at least 35 hours a week. And, these figures get even more extreme at Lyft, where 78 percent of the drivers work 15 hours per week or less, with 86 percent of them disclosing another full-time employment or an active search for it.

And this creates a problem. Since the supply of gig labor is liquid and offered mostly by part-time workers, companies like Uber can adjust wages and working conditions to their best interest, affecting full-time workers the most, Rosenblat explained. “The availability of part-time earners reduces pressure on employers to create more sustainable earning opportunities. The workers who hope to make a living in ridehail work take on the most risk,” he added, pointing out the high level of turnover this generates.

On the other hand, those searching for some extra income or those with difficult access to other jobs, like people with criminal records, benefit the most.

Image Credit: By Cstockwe (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Posted-In: Lyft UberNews Topics Travel Econ #s Tech General Best of Benzinga


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