According to a new study by JPMorgan Chase, about 3.1 percent of American adults earned income from the so-called Online Platform Economy (from Uber and TaskRabbit to eBay and Airbnb) between October 2014 and September 2015. (This represents a 47-fold increase over three years, beginning in October 2012.) And the financial significance of the gig economy is growing:
We find that the Online Platform Economy contributed significantly to the bottom line for certain segments of the population, notably labor platform participants in general, and specifically labor platform earners who live in San Francisco, or who are 35 and older or have low-to-moderate incomes. Among these segments, platform earnings represented, on average, more than a fourth of their income over a 12-month span.
Many dream that the “sharing economy” represents an alternative to the grotesque levels of inequality created in the rest of the economy.
As it turns out, it’s just that—a dream. The gig economy is itself contributing to increasing inequality across the U.S. economy.
Eric Morath notes that “wealthier Americans benefit from the gig economy’s ability to generate more income from their assets.”
Of top income earners who did participate in the gig economy, 82 percent did so by renting an asset like a house or selling products they made or already owned. They did so through capital platform systems such as renting out property through VRBO or selling crafts on sites like Etsy.
Low- and moderate-income individuals were much more reliant on labor platform earnings (from working as an Uber driver or a TaskRabbit mover) than the rest of the population. Labor platform earnings represented more than 25 percent of annual income for participants in the bottom three income quintiles compared to just 20 percent of annual income for labor platform participants in the top income quintile.
And then, not even mentioned in the JP Morgan Chase study, there’s the capital behind all the various online platforms—whether working, renting, or selling. Uber CEO and cofounder Travis Kalanick is now supposedly worth at least $5.3 billion.
Not surprisingly, the gig economy is characterized by the same unequalizing, capital-labor dynamics as the rest of the capitalist economy.