A number of news articles are pegging electric scooters as the next ‘new wave’ of urban transportation. Whether this actually happens or not is to be determined, but there are some new electric scooter offerings looming. Speculation has it that companies like Spin, LimeBike, and Bird will introduce droves of electrics scooters into urban settings, and they will all be eagerly adopted for the long-term.
Collections of electric scooters distributed in urban centers require recharging and maintenance, so there are a number of independent contractor roles available to service them. These new jobs are supposedly part of the ‘gig economy’.
Several electric scooter chargers were referenced in an article about this new type of work, but there weren’t a whole lot of details, “Bird declined to comment and wouldn’t provide Curbed with any details about the number of employees who work in these roles, how much the company is spending on charging and repairs, or any other information about this aspect of their operations.” Nothing about this situation is nefarious, it’s just vague.
However, if you have been around startups at all, you know most of them typically don’t succeed. It will be interesting to see how long the electric scooter rental startups last. In this particular niche market, one may reasonably wonder how much demand there is for this form of transportation.
Gig Economy or Hype?
It’s also not entirely clear if the ‘gig economy’ exists in reality or more in the minds of the media. A new survey conducted by the Bureau of Labor Statistics found that only about 10% of all American workers are in alternative employment arrangements, what we in everyday language might call the ‘gig economy’.
The news release breaks down this type of employment into four categories:
- independent contractors, 6.9%
- on-call workers, 1.7%
- temporary help agency workers, 0.9%
- workers provided by contracting companies, 0.6%
Interestingly, the BLS doesn’t define the gig economy, and it explains why in its FAQ page, “One of the strengths of the Contingent Worker Supplement (CWS) is that it measures many different types of work, allowing researchers to study the workforce using their own definitions.” In an article on the BLS site the organization made a bolder statement — that there is no official definition of the gig economy.
If the recent BLS survey data and findings are accurate, the ‘gig economy’ has remained about the same size it was in 1995 and 2005. Obviously, that means it didn’t grow. However, it was predicted to become much larger than ten% of the workforce, “The gig economy…is now estimated to be about 34% of the workforce and expected to be 43% by the year 2020. We think self-employed [work] has a lot of opportunity for growth as we look ahead,” said Intuit CEO Brad Smith.
A difference of 24% translates into millions of workers so someone’s data is a little off, or researchers are defining jobs in the ‘gig economy’ differently so the results vary widely. The consulting firm McKinsey conducted its own survey, finding that “…20 to 30% of the working-age population — engage in some form of independent work.” (In their case the survey was of both American and European workers.)
Some ‘form of independent work’ is much broader than how the BLS defined alternative employment arrangements. (Intuit also used its own definition.)
So, which one source is to be trusted? The surveys employing the broadest definitions seem to be the most dubious. In fact, the vision of tens of millions of Americans using online platforms like TaskRabbit, UpWork, Uber, Lyft, ShiftGig, and AirBnB for their livelihoods may never materialize.
Hilariously, a Washington Post reporter went much further, writing the ‘gig economy’ might actually be more of a media invention than anything substantive, “Be suspicious of the scribbling and chattering class (of which this reporter is obviously a member). It’s in the business of discovering and popularizing new social, political and economic trends. Sometimes our need to be noticed exaggerates trends that, when examined closely, barely exist.”
Perhaps a little history will illuminate why the ‘gig economy’ might be more hype than reality. At least one source states that the term surged in popularity at the beginning of the Great Recession when millions of people lost their jobs and were scrambling to string together whatever work they could get just to survive. Because of the financial and psychological stress of that period and the length of the economic recovery, there may have been some overreaching when it came to predictions about the potential size of the gig or on-demand economy.
Americans had been ‘gigging’ for decades before the Great Recession, but it wasn’t considered to be an ‘economy’ until about 2009 when some of us were at our most hysterical. Studying and documenting ‘alternative employment arrangements’ can help us understand our national economic trends, but gigs, project work, and side hustles are nothing new.
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