Hustle and Gig Read online

  The stories from these twentysomething and thirtysomething workers underline the volatility of working in the twenty-first-century gig economy. Taking jobs in what has been heralded as a futuristic utopia of choose-your-own-adventure employment with flexible schedules and unlimited earnings, these young workers have instead found themselves working long hours for little pay and less stability. The autonomy they expected—work when you want, doing what you want—has been usurped by the need to maintain algorithm-approved acceptance and response rates. Sarah and Shaun find themselves pressured to accept unpleasant tasks, constantly hustling, while every week Baran must earn more than four hundred dollars just to break even on his Uber rental. Rather than finding financial freedom, these workers find themselves on the losing side of an outsourcing equation where they are responsible for platform “service fees” and encounter workplace expenses usually financed by employers. The promise of modern-day, app-driven entrepreneurship has yielded the bleak employment and living conditions of the early industrial age.

  THE SHARING ECONOMY IS A MOVEMENT FORWARD TO THE PAST

  Welcome to the sharing economy, a nebulous collection of online platforms and apps that promise to transcend capitalism in favor of community. Supporters argue that this new economic movement, alternatively described as the on-demand, platform, or gig economy, will build community, reverse economic inequality, stop ecological destruction, counter materialistic tendencies, enhance worker rights, empower the poor, and bring entrepreneurship to the masses.3 The sharing economy promises both an idyllic, boss-free future, where workers control their incomes and hours, and to be a cure-all for the woes of modern society.

  Yet for all of its app-enabled modernity, the gig economy resembles the early industrial age, where workers worked long hours in a piecemeal system, workplace safety was nonexistent, and there were few options for redress. Despite its focus on emerging technology—apps, smartphones, contactless payment systems and review systems—the sharing economy is truly a movement forward to the past. Workers find themselves outside even the most basic workplace protections regarding discrimination and sexual harassment, the right to unionize, and even the right to redress for workplace injuries. The sharing economy is upending generations of workplace protections in the name of disruption and returning to a time when worker exploitation was the norm.

  This book explores contradictions between the lofty promises of the gig economy and the lived experience of the workers, between app-enabled modernity and the reality of rolling back generations of workplace protections.

  The sharing economy promises flexibility and work-life balance, but while Baran works only four days a week, those days are twelve-hour shifts. Sarah and Shaun are free from reporting to a single employer, but the gig economy increasingly tethers them to work: they’re constantly on call, hustling to make money. Thanks to service algorithms, the decision to work isn’t always in their hands. The gig economy offers “flexibility,” but if they spend too much time away from the platform, they may discover they’ve been “removed from the community,” or “deactivated.”

  When it comes to the sharing economy’s promise to bring entrepreneurship to the masses, their careers diverge even more. Sarah doesn’t think of herself as an entrepreneur, but TaskRabbit tells her she is, and that the service is “incentivizing” her entrepreneurship through its commission structure. Yet successful Airbnb entrepreneurs (discussed further in chapter 7) are described by the platform as “bad actors” who are using the service to run de facto hotels, instead of just making extra money on the side.4 And Shaun? He’s just hustling.

  Much like fledgling entrepreneurs, gig economy workers find that getting work often requires doing unpaid work. Workers must maintain profiles and respond to emails from prospective clients or even just keep clicking “refresh” on their app—all of which is unpaid work. Sarah and Shaun are not always being paid to work, but they are always working. And Baran is “spending money to make money,” but his ability to make money is dictated by Uber’s policies and algorithms. Such contradictions lie at the center of the sharing economy. And yet, questioning these contradictions is not merely an academic exercise but one that has real implications for millions of people.

  In 2016, the Pew Research Center found that nearly a quarter of American adults had earned money in the “platform economy” over the last year.5 Economists Lawrence F. Katz and Alan B. Krueger found that online services such as Uber and TaskRabbit accounted for .5 percent of all workers in 2015— an impressive level of growth for a five-year-old industry.6

  Yet for all its growth, little is known about the actual, lived experience of working in the gig economy. Who are these workers? Why are they willing to work without hard-earned workplace protections? Are they entrepreneurs or idealistic “sharers,” or is this simply “unemployment lite”? Why are they investing their time and personal financial resources in work that is entirely out of their hands? What types of challenges and dangers—emotional, physical, or financial—do they experience? What does this mean for the future of work? And what does this mean for our society?

  My book is the first—and perhaps still the only one—to build on firsthand accounts from nearly eighty workers and to place their stories in the context of larger social structures and trends in American society. It’s also the only one to focus on four very different services—Airbnb, Uber, TaskRabbit, and Kitchensurfing—that illustrate the larger issues of skill and capital in the gig economy. (It’s highly illustrative that two of those services are doing better than ever, one is trying to establish a clear identity, and one is already defunct.)

  Many of the sharing economy books written to date have been by journalists or business school professors. Most serve as cheerleaders—the trend is great, the problems are minor, and so on. But as a sociologist, I take a more critical perspective. My book acknowledges the potential of the sharing economy and examines the challenges for workers. Instead of just telling readers about the sharing economy, I raise important questions about this new economic movement. My goal is to leave you reexamining some of what you’ve read previously. For instance, if this is a great opportunity for people to own their own businesses, why are workers embarrassed to work in the gig economy? What does it say about this type of work that workers lie to family and friends rather than admit that they drive for Uber or clean homes via TaskRabbit? If this is the so-called sharing economy, why does everything have a price?

  As a sociologist, I examine the larger social forces that lead workers to take on gig work or turn to multiple jobs to make ends meet. I link trends in outsourcing, wage stagnation, income volatility, and mass layoffs to the rise of this “alternative” work. I focus on the stories of the workers in order to put the sharing economy in the context of larger trends related to income inequality and American labor struggles over the past two hundred years. This historical connection demonstrates that while the underlying notion of a “gig economy” is fundamentally forward-facing—new tools, new capabilities, and new ventures—most of its basic practices are distressingly familiar. It’s an exercise in regression, returning workers to an era of rampant exploitation. It may be app-enabled, but this so-called disruption is definitely not leading to anything new.

  FROM SHARING TO EARNING

  From the beginning of the Great Depression and until the early 1970s, the trend in income distribution in the United States was toward greater equality, with the percentage of national income held by the wealthiest 1 percent of families dropping by more than half. But by the mid-1970s, that trend began to reverse. From 1993 to 2010, for the bottom 99 percent of the income distribution, the real growth rate in income was 6.4 percent, while the top 1 percent experienced a real growth rate of 58 percent. More than half of all real income growth in the economy went to families at the very top of the income distribution, a reversal described by Paul Krugman as the “Great Divergence.” But while worker wages stagnated, the pay received by top business executives has soared i
n the last twenty-five years. “In 1979 the ratio of the pay received by the average CEO in total direct compensation to that of the average production worker was 37.2:1. By 2007 (the year before the recession) it had grown to 277:1.”7

  The high levels of income inequality immediately before the Great Depression and Great Recession have led some to suggest that high levels of income inequality may precipitate economic crises by destabilizing the economy as a whole. Although the incomes of the wealthiest also declined during the Great Recession, the Federal Reserve’s triennial report, the 2014 Survey of Consumer Finances, shows that in the three years following the Great Recession, the typical American family’s income declined 5 percent. In addition to seeing their overall wealth fall by 2 percent, cash-strapped families did not save any additional money for retirement, and student loan debt continued to increase. Only the highest-earning households experienced income gains, causing the gap between the wealthiest and the poorest families to widen.8

  Early in the first decade of the twenty-first century, the gap between earnings and expenses was met with an increased use of credit cards and revolving lines of credit. By 2001, 75 percent of households utilized credit cards—a 50 percent increase since 1970.9 Credit card debt became increasingly common as the millennium continued: by 2007, 72 percent of households were carrying a balance.10

  In 2008, the Federal Reserve Board reported that Americans carried $2.56 trillion in consumer debt, up 22 percent since 2000. Household debt, which included mortgages and credit cards, represented 19 percent of household assets, according to the Federal Reserve, compared with 13 percent in 1980. The nation’s savings rate—which exceeded 8 percent of disposable income in 1968—was just 0.4 percent by 2008, according to the Bureau of Economic Analysis.11

  There are two general solutions when one’s income doesn’t match expenses: either cut expenses or increase income. The early days of the sharing economy—often described as collaborative consumption—included such free services as Couchsurfing.com and Craigslist, which were viewed as a way to decrease the expenses of consumption. Makerspaces and swaps allowed users access to low-cost or free products. As the sharing economy grew, free services were replaced with fee-based services. Couchsurfing.com was largely usurped by Airbnb.com; clothing swaps were replaced with Tradesy.com, an online designer-clothing reseller marketplace. Instead of cutting expenses through sharing, the focus moved to growing income by renting out one’s “surplus,” such as an unused room or one’s free time on evenings or weekends. In this way, the sharing economy became a way for workers to supplement their incomes.

  And the sharing economy appears to be fulfilling a real need. According to the Economic Policy Institute, the hourly wages of middle-wage workers were stagnant from 1979 to 2013, rising just 6 percent—less than 0.2 percent per year.12 The Pew Research Center notes that after adjusting for inflation, today’s average hourly wage has stagnated: “The $4.03-an-hour rate recorded in January 1973 has the same purchasing power as $22.41 would today.”13 Although the US unemployment rate has reached record lows, there’s a real perception that workers are not making enough and are taking a step backward, or at least remaining static.

  Millennials (born between 1980 and 2000) are known for early adoption of technology, but also for being disproportionately affected by the Great Recession.14 According to Bureau of Labor Statistics data, young people ages sixteen to twenty-four had an unemployment rate of 15.5 percent in 2013 and 14.2 in early 2014, leaving many of them unable to rent apartments and purchase or furnish homes. In contrast, the unemployment rate for people ages twenty-five and over was 5.4 percent in early 2014. Unfortunately, graduating college in the middle of an economic recession appears to have long-term effects on one’s earnings potential; such graduates experience a statistically significant wage loss even fifteen years after college graduation.15 Given this wage loss and high levels of student loan debt, it’s not surprising that almost half of twentysomethings in major cities are relying on rent subsidies from their parents.16 For millennials contending with the possibility of downward mobility, earning additional income through the sharing economy can be a popular stopgap measure—the majority of gig economy workers are between the ages of eighteen and thirty-four.17

  STRUGGLERS, STRIVERS, AND SUCCESS STORIES

  As I met and interviewed workers, the same themes arose again and again: some workers were struggling, others were excelling, and a large portion fell somewhere in between. I characterize the workers as falling into three main types: Strugglers, Strivers, and Success Stories.18

  The Success Stories have used the gig economy to create the life they—and many of us—want. They are their own bosses, they control their day-to-day schedule, and the sky seems to be the limit in terms of how much money they can make. The flexibility of the sharing economy means that they aren’t tied to a desk or even a city; they can run their companies via app while lounging on a beach or passing time in a bar.

  At the other end of the spectrum are the Strugglers. These are the workers who have turned to the sharing economy in a fit of desperation. They include the long-term unemployed and undocumented workers, who—thanks to the growing prevalence of E-Verify, a federal program that confirms employment eligibility—struggle to find work. In some cases, they are simply temporarily down on their luck: a job loss or personal crisis caused a major setback and their already-strained savings couldn’t handle the increased pressure. These college-educated workers found themselves struggling to pay rent, to afford food, even to collect enough quarters to do laundry. Finally, some of the Strugglers were reasonably successful—even believing themselves to be Success Stories—until the platform they were on performed a “pivot,” techspeak for a mission change and policy overhaul. Much like automation led to the wholesale layoffs of automotive workers, pivots lead to Strugglers trying to reinvent themselves. But unlike automotive workers, sharing economy workers generally receive little to no advance notice of major workplace changes, and they have no unemployment safety net to fall back on.

  The appeal of the Success Story is unmistakable. The fear of the Struggler situation is overpowering.

  And yet, these two extremes don’t tell the whole story. There’s also a third possibility for sharing economy workers. The Strivers are those who have good jobs and stable lives and who turn to the sharing economy for a bit of added excitement or extra cash. Unlike the Success Stories, they aren’t looking to make thousands of dollars from their sharing economy work; they don’t talk about scaling up or incorporating. Although some Strivers discuss making this a full-time job, they remain hesitant to leave their mainstream stability and workplace benefits or are using the gig economy while they transition to a new career or start a business. Unlike the Strugglers, these workers don’t necessarily need this money to survive, although it can provide a more comfortable lifestyle: the occasional vacation, additional funds in the bank, a bit more financial security.

  I use the term worker here as a matter of convenience but also of accuracy. These individuals are not employees, a specific workplace classification that I discuss further in chapters 3 and 4. But even though they are not employees, they are definitely working. While hosting an Airbnb guest or cooking as a Kitchensurfing chef may be fun, there is work involved. Few people would participate in this activity without the cash reward that follows, a fact that many workers freely admit.19

  I caution, however, that the categories I provide here are ideal types.20 Although I describe these distinctions as clear-cut, it’s not uncommon for a Striver to have qualities in common with the Strugglers or the Success Stories. In some cases Strivers would be considered Success Stories in the mainstream, nonsharing economy, even as they struggle to provide a middle-class lifestyle for their families.

  Amy, a thirty-six-year-old white woman, is a perfect example of this contradiction. A former nonprofit executive married to a lawyer, Amy had several children and was expecting another. I met Amy in a coffee shop near her East V
illage brownstone on a muggy summer day in New York City. I was excited that she had accepted my interview request. Many Airbnb hosts talked about hosting until they had kids, but Amy’s children were the impetus for her Airbnb hosting.

  She and her husband rented a brownstone in district 1, one of the few “choice” districts with no zoned schools. Part of the Lower East Side/East Village, district 1 has a number of alternative and experimental schools, but it’s also just blocks away from district 2, which has some of the best public elementary schools in the city.

  Unwilling to give up their apartment, but also wanting their oldest child to attend a strong school, Amy and her husband moved to a local rental complex that was comfortably ensconced in district 2. They turned their brownstone into an Airbnb rental. “We were essentially trying to figure out how we could recoup some of the rent,” she said. “If we can’t afford private school, I at least wanted to get into a good public school—you know, not right at the bottom of the barrel.” New York gives siblings preferential access to neighborhood schools, so Amy’s family can return to their apartment later, confident that their younger children will get into their preferred school.21

  Renting out their primary home hasn’t been easy. Their apartment tends to attract fellow families, something Amy and her children have struggled with. “Renting it to families creates a lot more work in turning it over,” Amy said, detailing her efforts to clean and reorganize toys after each stay. “I went once with my son because my nanny was sick. I just had to go. [I brought] both kids, and they had a really hard time walking in and realizing someone had slept in their beds, someone had played with their toys. They were really upset about it.”