More and More Businesses Relying on Gig Economy to Find Short-Term Labor

'We're at risk of becoming a country of isolated individual workers who are scrambling to piece together a few hours of low-wage, hourlong gigs that lack our most basic labor protections.' -Rebecca Smith, National Employment Law Project

'We're at risk of becoming a country of isolated individual workers who are scrambling to piece together a few hours of low-wage, hourlong gigs that lack our most basic labor protections.' -Rebecca Smith, National Employment Law Project (Getty Images)

The outsourcing of errands and odd jobs has fueled the growth of  companies like TaskRabbit. With the click of a button, you can find someone to assemble your Ikea furniture or drive you to the airport.

But individuals aren’t the only ones using such sites to get work done. Businesses, large and small, are tapping into the so-called gig economy to find short-term labor.

Uber has a Web page specifically for companies, as does Shyp, which delivers packages to post offices. Then there is Wonolo. It offers on-demand labor exclusively for small businesses, like Wendy Lieu’s chocolate shop.

Lieu has only a handful of employees at her San Francisco shop. To pack orders for the holiday rush, she got people through Wonolo. She says it is convenient because she does not have to increase staff or pay overtime.

Gig companies like Wonolo are providing businesses with workers, no strings attached. That helps cut costs, says Leslie Henthorn. She is a marketing programs manager at the tech company Twilio.

Henthorn says she orders people from TaskRabbit mainly to work events. “You don’t want to be committing to paying someone for eight hours when they don’t work for eight hours,” she says.

Henthorn says there are always “taskers” available, so Twilio does not have to rely on the same people. That is one of the things Twilio likes about it, she says. “Even when we have a great relationship,” she says, “when you need people on demand, a lot of times they are going to be busy.”

Are Gigs Replacing Regular Jobs?

The way companies are using these gig services scares Rebecca Smith. She is deputy director at the National Employment Law Project. Businesses are starting to replace more regular jobs with these gigs, Smith says, which is bad news for workers.

Most gigs don’t have the kind of protections that workers fought for in the early 20th century — things like unemployment benefits and workers’ comp. Smith says “We’re at risk of becoming a country of isolated individual workers who are scrambling to piece together a few hours of low-wage, hourlong gigs that lack our most basic labor protections.”

There aren’t great numbers yet on how these gigs are impacting the labor force, but Smith says they are part of an established trend toward less stable employment. She says traditional temp work is at an all-time high nationally.

“Major corporations are hiring someone to do a tiny task for an almost insignificant amount of time,” Smith says, “and they are doing that repeatedly.”

In terms of labor protections, some gig companies are trying to improve. TaskRabbit, for example, now has on-the-job insurance and guarantees minimum wage. Also, the  increased flexibility for this kind of work is a big perk for workers. It’s a quick way to earn some extra cash, or even to subsist entirely without having to become a permanent employee.

But Smith says it’s high unemployment that is driving workers to short-term gigs. People are desperate for income — people like Stephen.

Stephen does a lot of work for tech startups in the Bay Area. Mostly he helps companies move into new offices by setting up desks, PCs, telephones. But Stephen isn’t employed by those startups or a moving business. He is a contractor hired by the hour through TaskRabbit.

Stephen doesn’t want to use his last name because he’s worried a potential employer might see how hard up he is for work. Stephen started at TaskRabbit after being unemployed for nine months.

At first, TaskRabbit was great. He got a string of gigs at tech companies and started making some income. But then Christmas rolled around, everyone went on vacation and the work stopped. Stephen thought he might fall behind on rent and default on debts.

Thankfully, the work has picked up, but Stephen worries it could stop again. He needs a real job, he says, but as more gig services pop up, those could be harder to come by.

By some estimates, about 34 percent of the U.S. workforce now consists of freelancers, including temps, moonlighters and independent contractors. A 2006 report from the U.S. General Accountability Office said about 31 percent of workers in this country were employed on a contingency basis.

Curious about the boom/bust cycle that is reshaping the Bay Area? Check out our Boomtown series.

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