Struggling to find jobs, millions of young workers have looked to the gig economy. Nearly a third of the sharing economy’s workers are in their thirties and a quarter are between the ages of 18 and 29; 30 percent take such jobs because they either can’t find a stable, “real” job or need the supplemental income. And the gig economy may represent the workforce of the future, with a projected 40 percent of the labor force fitting the label of “contingent” worker by 2020. But millennials, even cash-strapped ones, may want to consider the gig economy’s drawbacks before diving in.
First, the rewards have often been inflated, and they’re beginning to droop. In January, Uber agreed to pay the Federal Trade Commission $20 million for falsely claiming that its uberX drivers earned median incomes of $90,000 annually in New York City and $74,000 in San Francisco, when in reality, fewer than 10 percent of drivers in those cities earned as much, according to the FTC.
Some reports have claimed that the odd-jobs app Taskrabbit has yielded its “Taskers” sustainable and even comfortable incomes. But while the company used to take a 30 percent slice of a Taskrabbit worker’s first job and then 15 percent on every successive task, late last year it quietly changed its policy, taking a flat 30 percent service fee for all tasks. Similarly, the freelance work marketplace Fiverr did away with its $5 minimum price for designs, translations, videos and other products and services a year earlier, to “make sellers nimble enough to compete” for projects.
As gig economy wages have fallen 6 percent between June 2014 and the end of last year, participation in the platforms has bottomed out. Part of the reason may be not just lower-than-expected or dropping incomes, but taxes.
Although their jobs…