
We may have reached peak “gig” economy - mpweiher
https://qz.com/837237/people-are-getting-sick-of-working-in-the-sharing-economy/
======
ProblemFactory
It's funny to see the sharing economy promoted as a goal in itself, when 30
years ago one of the criticisms of the Soviet Union was that people there are
so poor that they are forced to share kitchens and cars with strangers.

Nobody _wants_ to share things, it's all done for economic reasons. People buy
on AirBNB and Uber because it's cheaper than an equivalent hotel or taxi.
People sell on AirBNB and Uber because they need the extra income.

For a short while, VC investments paid out as bonuses to the participants, and
just the novelty of the thing might keep both sides happy. But eventually
there has to be a balance found between "I want to pay less" and "I want to
earn as much as before" and "government wants as much taxes as before".

~~~
LoonyBalloony
"It's funny to see the sharing economy promoted as a goal in itself, when 30
years ago one of the criticisms of the Soviet Union was that people there are
so poor that they are forced to share kitchens and cars with strangers."

And how the soviet union would only have one manufacturer and one shitty
product.

Now we have walmart.

No matter the ideology, powerful people will want to possess power and wealth
and will use whatever systems are in place to get there.

~~~
djsumdog
> one shitty product.

Many of the things made during the Soviet era were made to last. I'd recommend
the documentary: "The Lightbulb Conspiracy." It talks about planned obsolesce
and the throw away economy.

It's not necessarily because the Soviet state, but more simply due to resource
scarcity and needing to make things that last a very long time.

It's more than appalling that our cell phones are only intended to last two ~
four years. Of course that gives miners and Chinese manufactures jobs and
growth (and the war industry too as they start a few more wars to collect
resources).

~~~
TeMPOraL
> _but more simply due to resource scarcity and needing to make things that
> last a very long time_

And no pressure to make shitty things just to ensure you have return
customers.

~~~
umberway
Increase sales tax on status/luxury items. Decrease sales tax on long-life
products.

~~~
TeMPOraL
I don't see how the latter would help - "long-life" products would break
anyway.

OTOH, if we could get minimum warranties from the EU's standard 2 years to
something like 20 years for appliances and 10+ years for digital
electronics... maybe then companies would start to care.

~~~
umberway
The idea is to give companies an incentive to make tough stuff by increasing
their revenue for such products. But let's do both!

------
rednerrus
The job of the gatekeepers we've been so eager to dismantle was to keep
prices, and to some extent wages, up. We should not be surprised to find that
in more open markets, prices, and to a more extreme extent wages, are
dropping.

------
EternalData
A lot of the cut paid out to workers in the gig economy is going to fade to
nothing. Uber and Lyft, as prime examples, are two capital spigots that are
making binary bets that they can essentially cut their labor costs and become
profitable through the use of automation (Travis basically said "self-driving
and IPO or bust). It's not going to look pretty when workers who didn't have
any protections suddenly face up to shifting capital.

~~~
acchow
No kind of protections can stop the progress of technology.

~~~
EternalData
Protections can help soften the secondary impacts of technology.

------
quirkot
People are "quitting" but the yr/yr graphs on participation growth don't go
below zero?

I'm not through the whole thing, yet, but we're off to a bad start

~~~
diminoten
Yeah, the headline isn't supported by the article.

Another way of looking at these numbers is that the unsustainable explosive
growth the "gig economy" saw early on was just that, unsustainable and
explosive initial growth. The "mere" ~100% YoY growth for labor platforms is
still incredible, and time will tell if that continues to drop.

The article avoids talking about what the "gig economy" would need to sustain
itself, but it's entirely possible it doesn't need to grow nearly this fast to
still be completely viable.

~~~
dragonwriter
Decelerating growth while still being unsustainable because it's VC-subsidized
raises serious questions of whether there is a self-sustaining business
underneath; the main advantage "gig economy" firms have over competing
established incumbents is willingness to spend VC money and test the limits of
the law, but once the law is either adjusted or settled through disputes and
VCs want to see returns rather than pouring in more subsidies in hopes of
future growth, both of those advantages go away and they end up in competitive
markets without a moat.

------
imgabe
This is how it's supposed to work isn't it? If the wages fall so low that it's
no longer worthwhile for people to do the work, people will stop doing it. If
the work still needs to be done, people will have to pay an amount that
workers are willing to accept.

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walrus1066
Good, hopefully people are realising how exploitative a lot of these platforms
are. We need new laws that require gig employees to get sick/accident pay and
net pay at minimum wage or above.

~~~
manarth
In the UK, there have been a few cases (Uber, Hermes, City Sprint) where "gig
economy workers" were declared to be employees rather than independent
contractors, and therefore entitled to all the usual benefits.

Hopefully that spreads wider.

------
FussyZeus
Can anybody see a real future in any of these gig service companies? I'd say
Uber is the exception because of the way the business works (i.e. ride sharing
is something you can't plan for the future, it's a one shot per transaction
deal) (this also doesn't account for it's constant boxing matches with various
Governments, that's a different discussion)? Like the maid services, once you
get linked up with a maid you like, you're directly incentivized to abandon
the service to keep the maid you want, and they are incentivized you let you
do it because they get more money?

It seems like all of these "match x worker to x task" services are a countdown
until the customer finds a worker they particularly like (or just one they can
tolerate, I wouldn't be wild about strangers having access to my home) at
which point they drop the service, and the servicer's time to handle clients
for said service has now been reduced, since they have a direct relationship
with a client.

I mean they can put this in the ToS that you "can't do that" but in reality
they absolutely can, there's nothing to stop them and no real way to follow up
in a meaningful, actionable way for the service.

~~~
sharemywin
You can certainly put a non-compete of existing customers in the contract with
the "independent contractor" and make it clear that if the platform finds out
you'll lose all your existing contracts and get sued. You could offer a way to
buy themselves out of the contract too.

~~~
FussyZeus
The tricky part is the platform finding out. The customer isn't going to out
them, and the provider is going to do everything possible to not out
themselves. Unless our hypothetical service is hiring PI's to follow all their
contractors around, it seems unlikely they could catch even a small fraction
of the offenders.

~~~
cowpewter
PIs are expensive. My dad's a PI, and mostly works for insurance companies on
worker's comp fraud cases. Even the insurance companies, for all their money,
don't hire a PI until they are 99.9% positive a given claimant is defrauding
them, and at that point the PI is more of a formality to gather evidence for
court than a tool for finding out if the claimant is a fraud or not.

~~~
FussyZeus
Right and that's what I'm saying, the expense for finding out who's skimming
clients is going to be incredibly high compared to the minimal benefits. Even
with VC cash that seems like a tough sell.

Not to mention, it would be a trifle for even a lackluster reporter to paint
this up like the company being the creepy big brother bad guy. The PR cost
could be very high too, considering the levels of loyalty (read: none) most
customers have to these services.

------
matchagaucho
This article conveniently omits the "up and to the right" graph of increased
Uber Drivers and Riders.

And the "down and to the right" graph depicting 500% growth falling to 100%
is, well... judge for yourself.

~~~
twinkletwinkle
My thought as well. 100% growth as your last measured datapoint is not peak
anything.

------
LoonyBalloony
Anecdotes allowed here?

Former GrubHub employee here.

When you tip with your credit card when ordering through grubhub, 99% of the
time it goes to grubhub and it never reaches the driver. Grubhub guarantees a
hourly wage, but to keep your tips that you have to earn more then your hourly
rate. This means the driver won't receive any tips until he/she makes
themselves free for grubhub. Pretty ingenious IMO, make the driver a
contractor so you don't pay payroll tax, and the drivers basically work to
make themselves free for you to hire.

It's not that I want the tips, I really do think tipping is a horrendous
system and it is "my fault" for signing up to work for them (I was incredibly
desperate for money). I just feel it is disingenuous to call it a tip when it
should be called a "please pay my driver's hourly wage for me" fund. I know
that is basically what a tip is, but when someone tips me very well I have
this sick feeling in my stomach because they wanted it to go to me not
grubhub. That is why I'm leaving grubhub.

I'll break it down for you guys how it works because I was confused for a long
while about how it works (which is probably by design).

You work 8 hours for grubhub. For brevity, lets assume in your area grubhub
pays $10 a hour, the mileage they pay you is 25 cents a mile (from restaurant
to customer only, you don't get anything driving to restaurant) and the
delivery fee is $2. You deliver 10 deliveries during that time, your (payable)
mileage is 40 miles:

You worked 8 hours, so your hourly wage is $80. Now lets see how much in tips
you need to make before you can start keeping your tips!

Delivery fees - $20 Mileage - $10

You would need to make $50 in tips to start actually getting your tips.

Now I'm getting a new pizza delivery job where the hourly rate is a couple
bucks an hour lower, so my hourly rate in this example would be $8, so while I
would only make $64 dollars from my hourly rate, I get to keep my delivery
fees, mileage, and tips on top of that.

The Grubhub I worked for spreads the work around so that people earn the
minimum hourly rate. Why wouldn't they? it lowers their labor costs to near
zero.

If you have to use grubhub tip in cash, or better yet just don't tip. I don't
care I am making the minimum hourly rate 99% of the time. If grubhub can't
survive without the credit card tips customers intended to go to the driver it
shouldn't be around.

P.S.: I'll say again I understood that I signed a contract so grubhub can do
whatever it wants. I understand I got a few dollars more over the minimum wage
(as if it was worth giving up all that tip money). This entire post was about
informing people the deception involved around the credit card tips. If
grubhub stands by their practices, then spreading this information around
won't hurt their business.

~~~
smileysteve
This is the way that server's wages are __supposed __to work everywhere.

Yes, your new pizza gig, is supposed to make up the difference between $2.35
and $7.25 if you make no tips.

~~~
LoonyBalloony
I feel like you're missing my point, but if not just ignore this, you can
interpret this your own way. :)

Going with your server example, if it worked like grubhub the waitress would
have to earn over $2.35 an hour before s/he could start keeping her/his tips.
At that point, s/he is essentially free for the business to hire. Now imagine
if that place had maybe a hundred waitresses and spread the tables out between
them so none made more then the $2.35 an hour. The business then keeps all the
tips in this scenario. That is how grubhub works (where I live at least)

When I got a big tip early in my shift, I would never receive any more orders
the rest of my night. Why would they send me more orders? then they'd have to
give me some of the credit card tip money. They could have one of the other
drivers do all that work until they maxed out their hourly.

Is it right to call it a tip when the business intends to do everything in
it's power to not give any of the money written in the tip line to the driver?
I guess thats a personal opinion you will have to make on your own.

The new place I start working at in a few weeks "guarantees" only $2 less an
hour. that is one delivery an hour at the new place with no tip and I am
making the same hourly rate. Then I will keep my tips and mileage and delivery
fees.

A company I can be proud to work for hopefully. I won't feel bad seeing a good
tip ever again. peace of mind is the best tip I can think of.

~~~
cstejerean
Are you positive that you fully understand the compensation structure of the
new pizza delivery place? Because it seems incredibly unlikely that they will
pay you $8/hour, plus a delivery fee per delivery, plus a per mile rate, and
then tips on top of all of that.

~~~
LoonyBalloony
Guess I'm lucky. :)

------
brilliantcode
2012: We are in the "sharing economy".

2017: Not anymore.

2022: We are in the "minimalist economy".

Are there any sharing economy unicorns currently listed on the stock exchange?
They are just asking for people to short it.

------
pyb
In London at least, from the way they drive, it's painfully clear that the
average Uber driver has very little experience.

It follows that turnover must be quite huge in the profession.

~~~
walrus1066
Same with deliveroo, I hate seeing their cyclists have accidents, knowing
their employer will not help them.

Sadly, the employees have no choice, they cannot get unemployment benefit if
they leave an uber/deliveroo job. Or they work a zero hours contract job,
again with no security.

------
roystonvassey
This reminds me of a study (and subsequently made into a book)that tracked how
the poor manage their finances through a series of diaries. [1] The most
interesting insight, for me, was the fact that it isn't the absence of income
but the unpredictability of it that is most worrisome for poor families.

Similarly, in this case, if I have a job with an assured income every 2-4
weeks, you'll have to convince me with a huge uptick over this income to
sacrifice this assurance for a chance to become a contractor. Add to this the
other benefits such as retirals and health-insurance and the trade-off looks
even less attractive.

[1] [http://www.portfoliosofthepoor.com/](http://www.portfoliosofthepoor.com/)

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rock57
Can this data mean that a significant part of "gig economy happens to be a
fad, similar to 3D TVs or Groupon? I.e. that value of relevant companies could
and would soon significantly shrink, just like it happened with Groupon and
its clones, after they went through the whole body of SMBs (for most the deals
were NOT profitable) and the deal-seeking individuals. The main difference
being that attractive pricing for the labor-sharing and capital-sharing
platforms was funded and subsidized by VC money, while for Groupon and clones
money for reduced pricing went out of pockets of SMBs...

------
mdb333
is this surprising news? at least living in SF its pretty clear we're at full
saturation. Companies have been throwing all the money at fending off
competition and expanding to new markets... As well, most all of these gigs
are means to an end, so equally unsurprising about the employment trends. Go
ask folks if they want to be a taxi driver or delivery person and you'll get
pretty negative response. Ask, hey do you want to work for Uber or Caviar and
it's sure, why not. I imagine the novelty wears off pretty quickly.

~~~
wyclif
Every job is a means to end, though. Employees agree with employers to
exchange labour for money.

------
sailfast
What I don't see discussed here is that we are reaching peak employment in the
United States so part time jobs will swap out in favor of more stable
employment. I would predict an increase in the number of "gig" jobs as
employment regresses back to the mean and/or if we see another spike in
unemployment.

Rephrased as a question: "Did these companies succeed primarily because of the
job / capital market they grew up in, or was it just a contributor to the
scale / growth?"

------
adaml_623
"None of this is great news for investors or managers of sharing economy
startups."

Actually if the true reason for this trend is that the economy is improving
and wages will improve then these investors should be fine.

------
a-guest
observations:

1\. The article seemed fuzzy on data supporting the claim that people who have
dropped out of the gig economy have changed to non-gig employment.

2\. What are the types of jobs the former gig-sters moved to?

3\. Are more employers trying to move to a gig-based employment model?

4\. Aren't there already companies who sort of operate on a gig-based model in
how they hire contractors for a limited duration and then drop them when the
contract ends? It's just that these don't get counted as the trendy "gig"
model?

5\. We may have reached peak "peak" articles.

------
allengeorge
Well, for one thing it's not a "sharing economy" (that's a feel-good misnomer)
- it's a "part-time work economy", which is a completely different beast. The
fact that Uber, TaskRabbit et. al. have managed to brand it as such is a
triumph of marketing.

(I like the term "gig economy" \- also used in linked article - because it
reflects the reality of the style and conditions of the work.)

~~~
pyb
I like 'gig economy' too. You may also like to call it the 'tax- and labor
law- avoidance economy'

~~~
andy_ppp
* Hotel licence avoidance economy

~~~
masklinn
That's just a subset of tax and law (/regulations) avoidance isn't it?

~~~
andy_ppp
I'm being deliberately teasy with my reply, but if you like I can say that
grand parent specifies tax and _labour_ laws.

------
whyileft
Everyone quits at the same time. When they realize how much they owe in taxes
or incur accidental cost like a car accident or a large maintenance bill to
their home they were renting out.

When your contractors lose money working with you they eventually have no
choice but to do something else because they run out of money.

