Apr 27, 2019 - Economy

Deep Dive — The new gig: America's hidden economy

Illustration of woman leaning over a giant cell phone

Illustration: Sarah Grillo/Axios

More Americans are working than ever before, but a growing number of them aren't 9-to-5 employees, nor skilled freelancers who negotiate their compensation.

Between the lines: Instead they are your Uber driver, your DoorDash food deliverer or your Rover dog-walker.

Why it matters: On-demand jobs have become a central cog in our economic growth engine, providing both entry-level jobs and supplemental incomes. They are to 2019 what fast-food work was to 1989.

  • Uber alone reports 3.9 million global drivers, around one-third of whom are in the U.S.
  • For context, the U.S. added 2.6 million jobs in all of 2018.
  • There isn't broad agreement on how many people are in the on-demand economy, particularly because labor reports often conflate such jobs with more traditional "gig" work like contract graphic design or independent trucking.

But America's new service economy faces similar challenges to its legacy one.

Automation: Companies are racing to develop self-driving cars and delivery robots.

  • It's not too much of an imminent concern, despite Tesla's recent robo-taxi announcement, but many on-demand companies envision someday removing humans from their labor pools.
  • In a decade or two, it's difficult to see most of these jobs still existing.

Wages: On-demand employers face criticism for not paying fair wages and are under the same pressures as traditional services businesses to increase salaries for the lower-paid workers.

On-demand work does differ from traditional service work in some key ways, beyond smartphones and more flexible hours.

  • Lower barriers to entry: There are no job interviews, and a new on-demand worker can sometimes on-board themselves in just a matter of minutes.
  • Less consistent pay: A McDonald's fry jockey knows their per-hour pay and how many hours they'll get per week. A Lyft driver has no guarantees of getting fares, and thus has no guarantees of getting paid.

The bottom line: America's labor ladder has a new bottom rung, an easy first step for unskilled workers and valuable stability for everything above. If it breaks, there might be no other way for millions of workers to rise.

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