Declaring Independence

The gig economy goes mainstream

By Kevin Manne

Michael Nejame, BS ’20, holds one of the dogs he walks, thanks to the smartphone app Rover.

Michael Nejame, BS ’20, with one of the dogs he walks, thanks to the smartphone app Rover.

When you ask Stephanie Argentine, BA ’89, JD ’93, MBA ’00, what her job title is, it’s complicated.

That’s because after a 25-year career in law, academia and corporate HR, she made the leap into self-employment five years ago.

Today, she works for herself as the founder of solve& consulting, but she’s also an adjunct instructor of organization and human resources in the School of Management and an executive in residence for the school’s Center for Leadership and Organizational Effectiveness.

Why make the switch out of a traditional 9-to-5 job? Argentine says she was motivated by a desire for flexibility and to be selective about the work she does.

“Gig work has given me a greater work-life balance and the ability to control my time,” she says. “I get to pick and choose the work that aligns with my strengths, as opposed to the work that’s assigned to me in a ‘W-2’ job.”

For current School of Management undergrad Michael Nejame, gig work looks different. It’s a way for him to make some extra money on the side while focusing on his studies.

He’s got two gigs: one as a tutor in the school’s Undergraduate Learning and Community Center, and a second as a dog sitter via the smartphone app Rover.

Through Rover, dog owners connect with sitters to walk their dogs or to watch them when the owners are away from home. Owners can see GPS maps of their dog’s walks, get alerts when they eat and drink, and even receive photos, videos and messages about their dogs throughout the day.

Nejame says Rover has a lot of benefits that make it a fit for his life.

“Getting paid to watch dogs is a dream,” he says. “There’s a lot of freedom to it so I can still do pretty much everything I want to do, all while getting paid and getting the stress relief of having a dog around.”

Nejame and Argentine are part of a growing movement of gig workers. According to a recent study by McKinsey Global Institute, 20-30% of the working-age population across Europe and the U.S. now engage in some form of independent work.

It’s a shift that has evolved with technology but is still experiencing growing pains—for workers and the companies that enable gig jobs.

Stephanie Argentine.

Photo: Katie Ambrose

“Gig work has given me a greater work-life balance and the ability to control my time. I get to pick and choose the work that aligns with my strengths. ”

Dialing up

Haimonti Dutta.

Haimonti Dutta

While the gig economy may be hot right now, it’s far from new. People in show business, for example, have been working independently for decades, typically using an agent to help them get new gigs.

In 1997, author Daniel Pink coined the term “free agent” to describe people who work for themselves, rather than a single employer. And as the online economy has grown, so have the number of free agents, according to Isaac Ehrlich, SUNY Distinguished Professor and the Melvin H. Baker Professor of American Enterprise.

“The internet and the digital economy will prove to be more important than the industrial revolution,” says Ehrlich. “It has created a new labor market that continues to evolve, allowing you to work from any place at any time.”

In the late ’90s and early 2000s, websites like eBay helped pioneer the digital gig economy by creating a marketplace where buyers could connect with sellers to find just about anything they’re looking for. In an era where people hesitated to make purchases online out of a lack of trust in digital security, eBay established their reputation system, which allowed users to rate their transactions and gave consumers the confidence to buy.

Today’s gig economy is driven by increasingly complex digital platforms that connect a customer to someone who can provide goods or services, according to Haimonti Dutta, assistant professor of management science and systems.

“With Uber, the software is the intermediary platform that facilitates 14 million trips each day,” says Dutta. “It needs to manage an enormous volume of data in real time to match you up with a driver who can get you to your destination in the most efficient way possible.”

Ian Olsen, BS ’09, worked at Uber for nearly two years.

Ian Olsen, BS ’09, worked at Uber for nearly two years, as chief of staff for the business intelligence units and most recently in executive engineering operations for the Office of the Chief Technology Officer. He says trust has shifted so much that we don’t think twice about letting a stranger walk our dog with Rover or renting out a room in our home with Airbnb.

“Fifteen years ago, it’d be unheard of to invite strangers into your house to stay with you,” says Olsen. “When I was growing up, I was always told to never get into a car with a stranger, but now we’re paying to do it.”

Olsen says even more gig opportunities will arise as culture continues to change—in ways we may not even consider right now.

“Whether you’re in a city and you want to use a neighbor’s washer and dryer, or you want to throw a house party or have a wedding in someone’s expensive home, these kinds of opportunities are on the way and the sharing economy is only going to grow,” he says.

Opportunities—and challenges

Although freelancing is not the way most work is done in the U.S., the 2019 Freelancing in America report shows that its direct impact on the economy is comparable to that of a major industry, like construction or information technology.

In total, 57 million Americans freelanced last year and collectively earned nearly $1 trillion, or 5% of the nation’s gross domestic product.

This gig work spans generations. Gen Z workers are the most likely to freelance (53% of gig workers last year), but millennials, Gen Xers and baby boomers are all getting in on gigs.

At Uber, Olsen says all types of people do ride sharing—those who are students, single parents, in between jobs or retired, or even executives who have some extra time and want to see what the gig economy is all about.

“It’s also something people do when they move to a new city,” he says. “You get to drive around and be your own tour guide in a new place.”

Emily Campion, PhD ’18, studied the gig economy for her dissertation and continues to explore its impact as assistant professor of management in the Old Dominion University Strome College of Business.

While most do gig work as a preferred choice, a third of independent workers are in it out of necessity—either because they’re financially strapped or because they can’t land a full-time job.

“For some, the gig economy is freedom and flexibility—they like the hustle,” says Campion. “But for others, it’s vulnerability. For example, I took an Uber to the airport last year and the driver was sick—she was sneezing, coughing and clearly uncomfortable. I offered to take another car, but she said she was fine. Imagine the financial pressure of needing to drive Uber at 6 a.m. when you should be at home recovering.”

In addition, Campion says independent workers need to be mindful of the kinds of things that are typically managed for employees, such as taxes, health insurance and retirement.

“You have to be diligent administratively to put the money away to pay taxes and also to start investing now—you can’t rely on an organization to match,” she says. “People generally don’t think that far in advance. Plus it’s confusing and complicated, and when you’re self-employed, you can’t just go down to the HR department for answers.”

Emily Campion.

Photo: Judith Soule

“For some, the gig economy is freedom and flexibility—they like the hustle. But for others, it’s vulnerability. ”
Emily Campion, PhD ’18

The road ahead

As gig work continues to grow, so does the regulation surrounding it.

California’s Assembly Bill 5 (AB5) will limit how companies in the state can classify workers as independent contractors, rather than employees. The legislation has the potential to change the employment status of more than one million low-wage workers in the state.

This reclassification would provide gig workers with key benefits and protections like insurance, sick days and minimum wage, but would also come with drawbacks. Uber and Lyft have told drivers that they may need to institute shifts, which would restrict the flexibility that makes the service appealing to so many who do the work. Drivers may also only be allowed to work for one ride-hailing service at a time.

Kate Bezrukova.

Kate Bezrukova

Kate Bezrukova, associate professor of organization and human resources, says this isn’t the last we’ll hear of legislation like AB5.

“Expect more states to follow California’s lead, since the federal government has done little to nothing on this and left it to states to regulate,” she says.

She also says that moving forward, the question is less about how companies will classify employees, and more about how long the jobs will even be there.

“These could be very temporary jobs anyways, as companies focus more on artificial intelligence to do these types of tasks,” says Bezrukova. “For example, self-driving cars may take over soon, eliminating the need for drivers in ride-sharing gigs and school bus drivers altogether.”

In the meantime, she says companies should focus on retraining employees for the technical jobs that may see significant growth, such as maintenance for robots and distribution of hardware for AI.

“It’s like when the computer revolution hit decades ago—there was great fear that computers would replace people,” says Bezrukova. “But work just shifted and IT positions grew because we needed more support for our computers and networking.”

“Gig work can counteract the sharp decline in traditional employment during a recession because of the flexibility it provides. ”
UB School of Management

Looking ahead, economist Isaac Ehrlich says gig work will grow—and be a benefit during tough financial times.

“The gig economy will be subject to cyclical fluctuation, much like that of the traditional labor market—but not necessarily in the same direction,” he says. “Gig work can counteract the sharp decline in traditional employment during a recession because of the flexibility it provides.”

Flexibility for the economy and for the people working in it—like Nejame doing his dog sitting and Argentine in management consulting—thanks to the gig economy.

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