The Wall Street Journal asks, Is Growth in the Gig Economy Stalling Out? Flattening trends are seen using information from Morgan Chase & Co. related to earnings from “Uber, TaskRabbit, eBay, Airbnb and nearly 40 other sites considered part of the “gig economy.””
These new sites and platforms hold the potential to radically reshape the American workforce, leaving a growing number of employees severed from traditional payroll jobs. But just how much is that actually happening? Research has suggested that most of the rise in independent contracting has been happening outside of these high-profile online platforms. And now, the latest data from JPMorgan suggests growth in the number of active users of online platforms is slowing down.
The report distinguishes between two types of platforms: those where users sell “capital,” whether it’s goods on eBay or Etsy or renting apartments, and those where users sell “labor,” such as Uber, Lyft, TaskRabbit and so on. They find that about 1% of adults are active on such platforms in any given month. That’s up, but only a little bit, from estimates made earlier this year. The period of explosive growth for this type of work may be over. (Only a trivial number of people use both types of platforms.)
This extraordinarily high turnover “implies that growth in online platform participation is highly dependent on attracting new participants or increasing the attachment of existing participants,” the report says. In other words, if companies in the gig economy want to keep growing, they need a strategy to stop people from quitting after a few months.
The post cites a remarkable number of adults who have participated in shared economy jobs but an extraordinarily high rate of churn from these jobs inside of a year. This actually resembles similar trends that occur during normal economic slowdowns where professionals or skilled labor temporarily take on unrelated, sometimes reasonable earning temporary work. But it appears there is a shift back to traditional jobs rather than a new trend that was going to change the world.