The magazine for alumni and friends of the UB School of Management
Issue link: http://ubschoolofmanagement.uberflip.com/i/1210017
14 Buffalo Business Spring 2020 "Fieen 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 construc- tion 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 econ- omy 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 neces- sity—either because they're financially strapped or because they can't land a full-time job. "For some, the gig economy is freedom and flex- ibility—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 work- ers 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 depart- ment for answers." The road ahead As gig work continues to grow, so does the regula- tion surrounding it. California's Assembly Bill 5 (AB5) will limit how companies in the state can classify workers as inde- pendent contractors, rather than employees. The legis- lation 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 Ly have told drivers that they may need to institute shis, 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. " Gig work can counteract the sharp decline in traditional employment during a recession because of the flexibility it provides." Isaac Ehrlich