Not getting Uber rich


Just as I am sceptical of the social claims of tech boosters, I prefer to take my breathless futurism with a grain of salt. Yes, new technology can be disruptive, and yes, it does cause some changes, but you always have to be wary that you don’t mistake the reality inside a bubble with how life is for most people out there. The latest case in point, the so called “sharing” or “gig” economy:

Drivers for online platforms including Uber and Lyft are making less than half of what they did four years ago, even as more and more people are drawn into working for them.

new report from the JPMorgan Chase Institute, based on payments directed to 2.3 million families, showed that average monthly platform earnings dropped considerably — by 53% — between 2013 and 2017.

These drivers made $783 per month in 2017 versus $1,469 in 2013…

A limitation of the report is that it only took into account monthly earnings as opposed to hourly earnings. The reason for this being that it was not possible for the researchers to extract hourly earnings data from customers’ bank accounts. “We observe when customers are cashing out, but we don’t know how much they have been working,” said Amar Hamoudi, senior research lead at the JPMorgan Chase Institute.

“These declines in monthly earnings among drivers may reflect the fact that the growth in the number of drivers could have put downward pressure on hourly wages; they may also reflect a potential decline in the number of hours drivers are driving,” the report stated.

It might be the case of less work for more people, making the impact wider but shallower:

The initial popularity of gig work prompted a rash of speculation that independent workers — freelancers as well as gig workers and contractors — would soon occupy a steadily larger portion of the workforce. In October, a study by the Freelancers Union and Upwork, a freelancing website, predicted that a majority of U.S. workers would be freelancers by 2027.

Yet the JPMorgan Chase Institute’s report casts doubt on that likelihood. It found that among drivers, 58 percent work just three months or less each year through online economy websites. These include ride-hailing services such as Uber and Lyft as well as delivery drivers and movers who find work through online apps. Amazon, for example, now uses independent drivers to deliver some packages.

The study also reviewed online platforms that provide home improvement work, including TaskRabbit and dog-walking, home cleaning and other sites. Two-thirds of those workers perform gig work for only three months a year or less.

There seems to be more change inside the gig economy itself than prompted by it: “The JPMorgan Institute study found that transportation is increasingly the dominant force in the gig economy. Driving makes up 56 percent of all gig work, up from just 6 percent in 2013. Selling items through such online sites as eBay and Etsy has sunk to 19 percent of gig work, down from 72 percent… People who participate in leasing websites, such as Airbnb and car rental site Truro, are earning more than other gig workers — averaging $2,113 in March of this year. But just 0.2 percent of households participate in such sites, the study found.”

New technology has given many people an opportunity to do a bit extra for themselves, but it seems to be largely a supplementation rather than a substitution. Beware of the sweeping claims of revolution. Changes are far subtler and take longer to unfold, much less permeate from the centres of early adoption to the rest of society. The Freelancers Union and Upwork might see a workforce of freelancers in the near future because that’s who they are and what they want to see happen. Meanwhile, what not many have actually predicted but is happening is the revival of the good old-fashioned and very 20th century manufacture.