What I learned about the ‘gig economy’ from 24 Lyft drivers
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Digital “gig economy” platforms such as Lyft, Upwork and Uber continue to make waves in the press, partly because these platforms represent the changing nature of work. With the rate of new jobless claims reaching their lowest level since the early 1970s, one must wonder whether the ability of the unemployed to engage the gig economy is helping bridge the gap between unemployment and full employment.

Or, perhaps, digital platforms are helping to fully-employ people. For instance, a recent McKinsey Global Institute survey reveals an estimated 162 million people in the U.S. and E.U. work independently, with around 4 percent finding their work via digital platforms. 

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One way to assess how the gig economy is contributing to lower levels of unemployment is to figure out who is finding their work through digital platforms. That is, who are these 4 percent? Are they folks who have found permanent employment via these digital platforms, or are such platforms bridging the unemployment gap while people search for more permanent jobs?

 

I wanted to find out. I asked my past 28 Lyft drivers from rides in Boston and Washington, D.C., “Why do you drive?” Four drivers didn’t really answer my question, but the remaining 24 were happy to share details about their life situations. 

“I love this job!”

My impression from the general media was that people who engaged in gig economy work relished the freedom from the 9a.m.-5p.m. grind, the annoyance of hovering supervisors and aggressive performance targets. I expected the majority of drivers had found employment bliss in the gig economy.

That wasn’t the case, however. Only four drivers fell into this category and their stories were uninspiring. Three of the four drivers left their prior jobs waiting tables and working at an apartment building because they were tired of changing weekly schedules and low pay. The fourth driver had a wild story about losing his job during the Great Recession and getting the idea to drive from his buddies while shooting pool. 

“A few extra $$$ is nice!”

Two drivers were stay-at-home moms who drove during the day while their kids were at school. Both indicated they didn’t have college degrees and felt the main jobs available to them were in retail. 

The other three drivers turned on the app when they felt like earning some extra money. One guy, originally from Benin, said he would drive a few passengers a week and send the money to a charity in his home country. 

“Dude, I’m broke…”

These three drivers had a mix of stories. One driver explained he couldn’t afford his retirement and needed extra income to pay his rising rent. Another driver said he was the top salesman for a professional services company when he lost his job during the Great Recession.

He bought into a partnership in a small financial advisory firm, but the work had been slow and he needed the extra income to take care of his wife and three kids. When I told him I was interested in why he drove for Lyft because I was trying to understand the gig economy he said, “If you’re the number one salesman and you’re laid off, what does that say about the economy?”

“I’d rather be working a nine-to-five...”

This category was the most popular with twelve drivers roughly fitting the following description -- between jobs and actively looking for work.

There was a recent graduate of an elite college who was looking for a job in international relations, a college student taking a gap year to figure out his life and a guy who had been unemployed for a year and was working for a temp agency.

There were five guys who took classes during the day to improve their skills and find better employment. There were two guys whose small businesses closed -- a café and a construction company -- and were driving to earn enough money to reopen their businesses.

There was a young guy who bounced between Chick-fil-A, T-Mobile, and work in private security and one man who lost his job at a limousine company thanks to Uber and Lyft.

Conclusions drawn.

It seems most drivers would prefer a 9 a.m.-5 p.m. job, suggesting the gig economy is helping some people bridge the gap between unemployment and a permanent position. Few individuals I spoke with found employment bliss by driving, suggesting that at least this area of the changing nature of work is not a silver bullet for permanent employment. 

Overall, the general view that the gig economy provides people with the freedom to work flexible hours without a boss might be technically correct. However, instead of liberating workers from the dreaded nine-to-five, it seems most people are using digital platforms as a stopgap between usual forms of work.

 

Jason Schloetzer is a professor of Business Administration at the Georgetown University McDonough School of Business.


The views expressed by contributors are their own and not the views of The Hill.