One question I get asked a lot and always find difficult to answer is how big is the platform economy.
The question is tricky to address, since there is no simple and agreed-upon definition of what even constitutes the platform economy. Pew Research Centre’s new report on gig work, online selling and home sharing does, however, provide us with some useful insight into the prevalence of earning money from digital ‘gig work’ platforms among adults in the US. While the report doesn’t speak to the situation in Finland or Europe, having a baseline is a helpful starting point.
Here are four key takeaways summarized from the report – and a short remark on what the report does not address.
1. Almost a quarter of American adults have earned money in the “platform economy” over the last year: First, nearly one-in-ten Americans (8%) have earned money in the last year using digital platforms to take on a job or task: 5% of Americans indicate that they have earned money from a job platform in the last year by doing online tasks (including but not limited to IT work, taking surveys, and doing data entry). Some 2% of Americans have earned money by driving for ride-hailing services, while 1% each have used these platforms to perform shopping or delivery tasks, as well as cleaning or laundry tasks. Second, nearly one-in-five Americans (18%) have earned money in the last year by selling something online. The largest share of online sellers are using digital platforms to sell their own used or second-hand goods, but others use these sites to sell a wide range of handmade items and consumer goods. Third, 1% have rented out their properties on a home-sharing site. To sum across these three types of activities, some 24% of adults in the US have earned money in the platform economy over the last year.
2. There are significant differences between those earning money from labor platforms (where value is created primarily through investing time and effort) vs capital platforms (where value is created primarily by making goods or possessions available): First, participation in labor platforms is more common among blacks and Latinos than among whites, more common among those with relatively low household incomes than those with relatively high household incomes, and more common among young adults than any other age group. Second, when it comes to capital platforms such as online selling, the reverse is true: Online selling is more prevalent among whites than blacks, more common among the well-off and well-educated than those with lower levels of income and educational attainment, and is engaged in by a relatively broad range of age groups.
3. Earnings from the platform economy mean different things to different people. The meaning of these earnings varies both between and within particular platforms: First, users of labor platforms and capital platforms express different levels of reliance on the income they earn from these sites. More than half of labor platform users say that the money they earn from these sites is “essential” or “important” to their overall financial situations. The same is true of just one-in-five online sellers (20%). Second, in the case of gig work, workers who describe the income they earn from these platforms as “essential” or “important” are more likely to come from low-income households, to be non-white and to have not attended college. They are less likely to perform online tasks for pay, but more likely to gravitate towards physical tasks such as ride-hailing or cleaning and laundry. They are also significantly more likely to say that they are motivated to do this sort of work because they need to be able to control their own schedule or because there are not many other jobs available to them where they live.
4. The broader public has decidedly mixed views about jobs in the emerging gig economy. A majority of Americans feel that these jobs are good options for people who want a flexible work schedule (68%) or for older adults who don’t want to work full time any more (54%). Yet, around one-in-five feel that these jobs place too much financial burden on workers (21%) and let companies take advantage of workers (23%), while just 16% feel that this type of work offers jobs that people can build careers out of.
+1 What does this report not talk about? Pew’s new report is a useful starting point to quantifying the prevalence of earning money from digital ‘gig work’ platforms, even if it focuses only on adults in the US. Taken my particular interests in peer-to-peer exchange and home sharing (aka network hospitality), what I was most missing in this report were insights into participation in initiatives that promote non-monetary co-use of resources (e.g. tool libraries or not-for-profit borrowing and lending of physical goods) instead of just online selling, and the non-monetary exchanges that go on in the scope of home sharing (such as network hospitality arranged via the Couchsurfing platform but also the social exchanges that are sometimes facilitated by the initial financial exchanges that structure home sharing via services like Airbnb). This report did not set out to investigate such questions, but hopefully a future one will. To fully appreciate the difference platform economies make in people’s lives, it is important to include the non-monetary activities in the equation, too.
For further reading:
Gig Work, Online Selling and Home Sharing (pdf, full version of the Pew Research report discussed in this blogpost)
The Online Labour Index (the first economic indicator that provides an online gig economy equivalent of conventional labour market statistics, developed at the Oxford Internet Institute)
Our prior research on network hospitality:
Lampinen, A. & Cheshire, C. (2016) Hosting via Airbnb: Motivations and Financial Assurances in Monetized Network Hospitality. CHI’16 Proceedings of the annual conference on Human factors in computing systems. ACM New York, NY, USA.
Lampinen, A. (2016) Hosting Together via Couchsurfing: Privacy Management in the Context of Network Hospitality. International Journal of Communication, 10(2016), 1581–1600.
Ikkala, T., & Lampinen, A. (2015) Monetizing Network Hospitality: Hospitality and Sociability in the Context of Airbnb. CSCW’15 Proceedings of the ACM 2015 conference on Computer supported cooperative work. ACM New York, NY, USA.
Lampinen, A. (2014) Account Sharing in the Context of Networked Hospitality Exchange. CSCW’14 Proceedings of the ACM 2014 conference on Computer supported cooperative work. ACM New York, NY, USA.