• Ultimate Gig

Important Update: Gigs in the Time of COVID-19

The coronavirus pandemic is testing the nation and every individual in ways that we could not have imagined even a month ago. Gig workers are hit particularly hard. Many of them have seen demand for the products and the services they provide dry up as community after community goes on shutdown.

These folks have no sick days, no unemployment compensation, and no paid vacation to fall back on in these times. What’s more, we don’t know how long this economic shutdown may last.

Third Classification Between an Employee and Independent Contrator

The situation is bringing more attention to proposals to modernize labor laws to adapt to the gig economy. Uber CEO Dara Khosrowshahi sent a letter to President Donald Trump on March 23 asking Trump to include independent workers in any economic stimulus packages created in response to COVID-19. He also asked that the administration consider creating a third classification within labor laws, something between that of workers either being an employee or an independent contractor. Khosrowshahi is far from the first person to make such a proposal. In December 2015, Cornell University’s Seth D. Harris and Princeton University’s Alan B. Krueger shared a discussion paper as part of The Hamilton Project that proposed a new “independent worker” category. Independent workers, they proposed, are those that work with an intermediary company that matches workers to customers.

These workers have the flexibility to choose when and if they work, but, unlike pure independent contractors, they do have to adhere to some restrictions placed by the intermediary company. The intermediary may set the fee structure, for example, or retain the right to refuse a worker access to the platform.

The proposal called for this new class of workers to have the right to organize and collectively bargain, civil rights protections, tax withholdings, and employer contributions to payroll taxes. The gig company intermediaries would be allowed to pool independent workers to purchase and provide insurance or other benefits without having the workers be considered employees. Independent workers would not gain rights associated with hourly work, such as overtime or minimum wages, and they would not have access to unemployment benefits.

Are opportunities arising?

The adage says, out of adversity comes opportunity. It’s unlikely we will see labor laws change quickly, and there certainly are more pressing policy issues ahead in Washington. But the current economic situation will shine a light on the gig economy in new ways.

There also are opportunities within specific sectors of the gig economy. Delivery services, for example, are seeing a surge in demand. DoorDash has a notice on its website, asking users to be patient as wait times have increased.

The Best Gig to Be in Right Now

Gigs that rely on consumers’ having disposable income are susceptible to seeing sales decline when people hunker at home and grapple with job losses. But those that allow people to work and purchase from home offer the best opportunities for those looking to a gig for extra income. Among those are direct selling companies, which have been adapting to competition from e-commerce companies over the past decade.

Some companies have aggressively developed training and tools to help their salesforce be able to sell and recruit online, using such online platforms as Skype, Facebook Live, Zoom, and WhatsApp, among others.

Companies that focus on online selling now will not only ride out the current crisis better, but they will also reach higher levels of success when things return to normal.

Ready to Learn More?

The Ultimate Gig is a research project with the mission to provide insight into the relevance and growth of gig economy opportunities. Order the Ultimate Gig special report today!

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