The so-called sharing economy is often touted as an unequivocal good. Advocates describe it as a way for ordinary consumers to earn income from their cars, apartments and other personal assets, while also fostering a new class of Internet companies to compete with old, static industries.
In a related labor workforce trend, the "gig economy," startups such as Elance, TaskRabbit and Gigwalk have emerged to help people find a range of project-based and piece work that range from stocking shelves and designing a website to writing legal briefs. The companies behind such services say they are helping to give workers more flexibility, spurring job-creation, and finding more efficient ways to match customer demand with supply.
Yet if flourishing new businesses such as Uber and Airbnb are making it big by cutting their overhead and sidestepping regulations, and if customers are saving money, the benefits for workers in the sharing economy are decidedly more mixed. Here are five ways in which the all this sharing and gigging can disadvantage workers:
Stability. One key difference between traditional employers and the Internet companies pioneering the sharing economy is that the latter can't promise their employees steady income. After all, a paycheck depends on how well a given app matches potential clients and those providing resources or services. Workers also don't know when or where they will work, while accepting some short-term projects or assignments might preclude taking on more lucrative work. A job may well offer more flexibility, other words, but that often comes at the expense of having predictable work hours.
Income. Many of the tech companies facilitating the connections between clients and workers boast about the amount of money some people make. For example, Uber has said its drivers can make up to $90,000 in New York and that the median gross pay for one class of drivers in San Francisco is $74,191 for a 40-hour week.
But such numbers can be deceiving. Companies may mention top-end pay or a gross amount for all workers. In fact, the pay for gigs appears not only far more modest, but often nowhere near a living wage.
Meanwhile, even when the cash seems good, much of the cost of running the business falls on workers. Ride-sharing drivers must pay for wear-and-tear on their vehicles, gas and commercial insurance. Others jumping from one job to the next must absorb the transportation costs, expense for tools to do the work, phone service, accounting, health insurance and taxes.
By this measure, even annual income of $90,000 looks far less lucrative if a third or more of the money comes off the top.
Benefits. Most employers in the sharing economy don't offer benefits because the drivers, maids and other workers in these industries aren't employees. They typically get no paid sick or vacation days, 401(k) plans, health insurance or life insurance.
As a result, workers must pay for their own benefits, which eats into income, or do without them. Although the Affordable Care Act does offer individuals a way to get health insurance, many benefit packages available to self-employed people are more costly than the options for corporations, meaning that the loss can be even greater.
Control. The companies that provide such services often emphasize the control people have over their time, and for some workers that flexibility can be a major plus. Yet unpredictable hours and unstable income can undermine that autonomy. Meanwhile, sudden shifts in a company's policies or procedures can make life difficult for workers.
Protection. A key advantage for companies like Uber, Lyft and Airbnb is that they are largely, if not entirely, unregulated. Yet that is starting to change. Municipalities and states around the U.S. are now weighing whether and how to level the playing field. The legal and regulatory repercussions could end up falling more heavily on the drivers, renters and other individuals who participate in a given sector than on the tech companies providing the online framework for business.