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From Homejoy to Uber: Why The Gig Economy Will be a Big Issue in 2016

Updated on July 19, 2015

If Your Next Job is Freelancing, Will You Have Any Benefits?

Fiverr is an example of the new "gig economy" that has many Americans worried about the decline of the full-time job.
Fiverr is an example of the new "gig economy" that has many Americans worried about the decline of the full-time job. | Source

Will Surging Populist Sentiment Slow the Growth of the Gig Economy?

While many issues are virtually the same every presidential election cycle, ranging from defense spending and national security to income taxes and the state of public education, new ones crop up periodically. One of the biggest new issues to pop up this time around is the growing "gig economy." This new form of employment allows individuals, primarily the young, to be hired for on-demand tasks via smartphone apps. A customer can use an app to summon a driver, a housekeeper, someone to clean your laundry, and a number of delivery services. The rise of these convenient apps is complementing the increasing use of independent contractors by brick-and-mortar employers to make the old full-time job a thing of the past.

Critics complain that this trend is bad for the economy. A flurry of lawsuits has been levied at these on-demand employment apps and Homejoy, a house-cleaning company, has just shut down as a result, reports TIME. Workers of various stripes are banding together and protesting as on-demand freelancers encroach on their job territory. The chief complaint is that these apps give companies an unfair advantage by allowing them to claim on-demand workers as independent contractors, and thus limiting liability and responsibility for them.

Companies like Uber, Lyft, Homejoy, Washio, and others do not provide benefits for their workers, whom they classify as independent contractors. In a still-weak economy, however, many workers have no choice but to use these on-demand apps as their primary, full-time employment. And, with these apps being able to run brick-and-mortar businesses under by not having to provide capital, benefits, or physical infrastructure, it is probable that many more Americans will have no choice but to become part of the gig economy.

How can a middle-aged taxi driver with a family to support be able to compete with a college kid willing to use Mom and Dad's car for a taxi? Modern technology allows us to outsource tasks to young workers who are able and willing to work for pennies on the dollar. Teens and college students, or perhaps even retirees as more Baby Boomers exit the full-time workforce, can supplement their spending money by doing random chores in their spare time. Technology now allows freelancers to compete more ably with trained professionals, and not everyone is happy about it.

Employees of these on-demand apps have complained of lower-than-promised pay, consumers are worried about substandard job quality and lack of recourse from companies that shrug and say "well, he/she was an independent contractor," and authorities are concerned about the difficulty of regulating and overseeing the expanding operations of large employers that exist mainly on servers rather than storefronts.

These concerns have already been broached in the 2016 presidential campaign, with candidates being asked their opinion on popular ride-sharing app Uber. While some Republicans, such as libertarian U.S. Senator Rand Paul (KY), have lauded these on-demand apps as a positive innovation, others, especially Democrats, have expressed concern. Could the gig economy become a linchpin issue in 2016? While virtually all candidates promise more jobs for Americans, it remains to be seen what type of jobs they mean.

Democrat Bernie Sanders, the independent U.S. Senator from Vermont, wants to provide full-time jobs by embarking on massive investment in our nation's infrastructure. Having just achieved the biggest crowd of the 2016 campaign in Phoenix, Sanders' populism seems to be catching on with the general public. He stands to become a leading voice in the public scrutiny of on-demand job apps. His frank discussion of this issue could force other candidates to solidify their stances, getting the voting public involved in the debate.

Do we want on-demand employers to be able to classify workers as independent contractors? Do we want a job to include employee protections? Would much of this drama be solved if we had universal health care and stronger Social Security, allowing everyone a degree of social safety net protection, even independent contractors? In the aftermath of the Great Recession, and as smartphone technology improves and expands, these questions need to be answered quickly.

FULL DISCLOSURE:

As a freelance writer, I assume that I am also part of this gig economy. To all full-time writers out there, I apologize. But I can't stop, won't stop.

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