The five biggest misconceptions about the gig economy

By Liya Palagashvili of Mercatus. Excerpts:

Myth 1: The Majority of the Independent Workforce Are “Gig Economy” Workers

"While Uber, Lyft, and DoorDash are ubiquitous in our everyday lives, gig workers are a small subset of all independent workers. They amount to fewer than 10 percent of the overall independent contractor workforce. This is according to 1099 tax records, published by an IRS study."

"While Uber, Lyft, and DoorDash are ubiquitous in our everyday lives, gig workers are a small subset of all independent workers. They amount to fewer than 10 percent of the overall independent contractor workforce. This is according to 1099 tax records, published by an IRS study."  

Myth 2: The Majority of Gig Workers Are Full-time Earners on the App

"The majority of workers using online labor platforms are using it as a supplemental job, not a primary job. In fact, the same IRS study referenced above concludes, “we find that the exponential growth in labor [online platform economy] work is driven by individuals whose primary annual income derives from traditional jobs and who supplement that income with platform-mediated work.”"

"MIT Economist Jonathan Gruber also finds a similar pattern when surveying Uber drivers: 

• 62 percent of Uber drivers work on top of a full-time or part-time employment (W-2) job or are also students

• 18 percent work only on ridesharing/food delivery platforms (including other platforms besides Uber)

• The remainder are either retired, own their own business, or are unemployed 

Another survey that aggregates workers from across the major app-based industries also finds that 69 percent of app-based workers already have a full-time or part-time W-2 job."

"the largest largest share of independent contractors are supplemental earners who have full-time jobs elsewhere."

Myth 3: Most Gig Workers Don’t Have Access to Health Insurance

"the majority of Uber drivers (77 percent) are insured." [health insurance]  

Myth 4: Independent Contractors Want To Be Traditional Employees  

A vast majority (79 percent) of independent contractors prefer their nontraditional work arrangements over a traditional employment arrangement, according to the Bureau of Labor Statistics’ Contingent Worker Supplement. Only 1 in 10 independent contractors would rather have a traditional employment arrangement. 

Myth 5:  Large companies Are Primarily to “Blame” for the Growth of Independent Contracting

"The growth of independent contractors has been the fastest for small and low-wage businesses (fewer than 20 employees), followed by medium firms (20-100) and lastly by large firms (more than 100)."