Opinion

Blowback: Why overregulating the 'gig economy' would hurt L.A.

The gig economy is perfect for a place like Los Angeles, capital of the entertainment industry. Even before smartphones and companies like Uber and Lyft made finding temporary work simple, people who followed their dreams to L.A. have taken the short-term jobs necessary to make ends meet while they go out for an audition or are in between productions.

But where many of those who rely on the gig economy see opportunity, Times columnist Michael Hiltzik sees only the challenges. The gig economy is not developing because of some “cult of shareholder value,” as Hiltzik suggests in a Jan. 5 column. Rather, it is developing because there is a fundamental shift taking place in our society as individuals figure out new and better ways to structure their lives and their work.

There is no question that there are demand for these supplemental jobs and for the services they provide (and the way they provide them) to consumers.  The jobs are as diverse as the people who take them. Some work as handymen or dog walkers, others as drivers for transportation networking companies such as Uber and Lyft. The people using on-demand platforms for critical supplemental income are from every walk of life including retirees, moms, dads, teachers and students. 

And who benefits? Anyone who wants to make additional income or wants better access to a variety of needed services. For example, commuters in Los Angeles who experience reduced congestion thanks to more people filling the seats of cars already on the road; those who need access to quick and healthful home meals; and anyone who wants safe, reliable and affordable help with daily activities.

This isn’t to say the shift to a gig economy doesn’t pose challenges. In fact, while Los Angeles may be one of the first cities to deal with these changes, it is certainly not alone, and it will not be the last. Cities across the country are attempting to strike the right balance including enabling these new jobs, ensuring that individuals can maintain flexibility while making the additional income they need, and allowing new services to thrive.

Ultimately, we need a national dialogue about how to find this balance in a way that makes our economy more vibrant and ensures that workers can support themselves and their families. And the first topic of that conversation needs to be employment classification.

Our system of employment classification needs to be updated for the new economy, and we need to figure out how to make benefits such as health insurance more portable. But what Hiltzik wants -- for example, for on-demand workers including Uber and Lyft drivers to be classified as "traditional employees" -- could imperil an emerging sector of the economy that offers so much opportunity to so many. Abandoning the gig economy would limit the opportunities we want to create for workers who need additional income and curtail the services that consumers have come to rely on.

Furthermore, just-released data show that workers are making these jobs fit their lives in fundamentally different ways than the traditional employer-employee model. In December, financial software company Intuit released a study of more than 4,000 people working with 11 different on-demand companies. Some rely on their jobs as their sole source of income, but a large majority are using on-demand platforms as a way to augment other forms of income. 

Some of Intuit’s findings include:

  • Only 5% use a single on-demand platform as their sole source of income.
  • On average, people work about 12 hours per week using an on-demand platform.
  • Forty-three percent have either a traditional full-time job or part-time job and receive W-2 tax forms. 

The study went further and examined the motivations of the people who use on-demand platforms. It found:

  • Seventy-two percent said the primary reason to work with an on-demand platform is to earn more income.
  • Sixty percent said the secondary motivation is flexibility.

It's clear, then, that the workplace is changing dramatically. This requires us to imagine new modes of working and consider new paradigms. 

Most on-demand platforms have no schedule and no boss expecting you in at a certain time. People can work five hours one week and zero the next week. It is providing people a platform to make extra cash when they need it. Most important of all, the jobs offer Angelenos what they need: opportunity and flexibility to make ends meet while they pursue their dreams.

John Doherty is general counsel for TechNet, a lobbyist group for technology companies.

This piece is part of Blowback, our online forum for rebuttals to The Times. If you would like to write a full-length response to a recent Times article, editorial or Op-Ed and would like to participate in Blowback, here are our FAQs and submission policy.

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