How Airbnb, Uber, and Lyft attract their contractors

THE “GIG ECONOMY”—

scary words for Americans who rely on a full-time job with benefits to make ends meet. The rise of on-demand platforms like Uber, Lyft, TaskRabbit, and Airbnb conjures visions of a future in which 9-to-5 work is replaced by permanent free agency enabled by digital marketplaces. But the sector is booming and one big reason, according to a new report from the JPMorgan Chase Institute, is that people turn to labor platforms chiefly in months when their primary earnings fall, because of factors such as job loss and variation in overtime pay. For most, it’s an effective way of closing a gap that might otherwise result in credit card debt or eviction. “It’s pretty clear it’s helping offset dips in income,” says Diana Farrell, the institute’s president. That implies the sector will stay attractive—for its workers as well as its users. —JEFF BERCOVICI

LABOR PLATFORMS

Where participants perform discrete tasks

Note the spike in platform earnings in January and February and some summer months, which correlates to seasonally less-busy times for business. JPMorgan also found such workers don’t rely more heavily on platforms for income over time—instead, these services are growing by expanding their work forces.

CAPITAL PLATFORMS

Where participants sell goods or rent assets

It’s uncommon for people to treat hosting on Airbnb or selling on Etsy as their primary job: Only 17 percent make more than 75 percent of their income this way. Unlike on-demand laborers, these platform capitalists are making extra income, and not just making up for shortfalls.