Upstart ‘gig’ economy shows signs of weakness

WASHINGTON – The “gig” economy might not be the new frontier for America’s workforce after all.

From Uber to TaskRabbit to YourMechanic, so-called gig work has been widely seen as ideal for people who want the flexibility and independence that traditional jobs don’t offer. Yet the evidence is growing that, over time, they don’t deliver the financial returns many expect.

And they don’t appear to be reshaping the workforce. Over the past two years, for example, pay for gig workers has dropped, and they are earning a growing share of their income elsewhere, a new study finds. Most Americans who earn income through online platforms do so for only a few months each year, according to the study by the JPMorgan Chase Institute being released Monday.

Some people who experimented with gig work have likely landed traditional jobs. Drivers for Uber, Lyft and other transportation services, for example, now collectively earn only about half as much as they did five years ago.

The new data echo other evidence that such online platforms, despite deploying cutting-edge real-time technology, now look less like the future of work. A government report in July concluded that the proportion of independent workers has actually declined slightly in the past decade.

“People aren’t relying on platforms for their primary source of income,” said Fiona Grieg, director of consumer research for the institute and co-author of the study.

The data are derived from a sample of 39 million JPMorgan checking accounts studied over 51⁄2 years. In March 2018, about 1.6 percent of families participated in the gig economy, equivalent to about 2 million households. That is barely up from the 1.5 percent of a year earlier.

Most participants cycle in and out of gig work to supplement their incomes from other jobs. Previous research by JPMorgan has found that in any given month, 1 in 6 workers on online platforms is new – and more than half will have left the gig economy after a year of entering it.

For drivers, 58 percent work just three months or less each year through online economy websites. These include ride-hailing services like Uber and Lyft as well as delivery drivers and movers who find work through online apps.

For transportation workers, who mostly include Uber and Lyft but also package delivery services, average monthly incomes have fallen from $1,535 in October 2012 to just $762 in March of this year, the study found.

Todd Suffreti has seen the difference in the two years he’s driven for Uber. Suffreti, who works out of Frederick, Maryland, said his weekly income has dropped by a quarter since he began.

“It’s really saturated, and the calls don’t come in as often,” said Suffreti, 45. “It’s not like it used to be. I have to work harder and longer to get what I used to get.”