When you live a region as expensive as the greater Boston area, it helps to have a side hustle.
Technology has swept in and made the gig economy—a labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.—more accessible than ever, for both workers and the people who hire them, and on the surface, it might look like it’s the most promising sector of the economy. Uber and Lyft drivers seem to be everywhere, office lunches are now provided by GrubHub and AirBnb has emerged as an affordable alternative for tourists to expensive downtown area.
But if the gig economy is the future, it’s a future that looks a lot like the bottom end of today’s job market. Driving dominates the market, and it’s flooded with employees. What was - for a short while - a hot new trend to make some money on, quickly became just another way for people to grind away at.
Gig workers earn less than their non-gig counterparts. According to a JPMorgan Chase study of 2.3 million accounts belonging to workers in the gig economy, the average monthly income was just $837 compared to about $4,012 for all workers. According to Bureau of Labor Statistics (BLS), workers in the gig economy are nearly three times more likely to need a second job to get by than non-gig workers.
One in every five members of the gig economy works driving for a rideshare company or making deliveries. However, that industry However, according the BLS those jobs accounts for around 6 percent of the economy as a whole. The low wages are a result of just a small number of industries, all of which are flooded with employees.
Fifty-six percent of gig economy workers consider those gigs essential or important for their survival, according to a 2018 survey from JP Morgan. Americans whose gig jobs provides labor or a service - such as an Uber driver, TaskRabbit worker or tutor - rely on that job for an average of 25 percent of their yearly earnings.
Alexandrea Ravenelle is an assistant professor at Mercy College and a visiting scholar at the Institute for Public Knowledge at NYU. She divides gig economy workers into three groups: “strugglers,” who have been down on their luck, unemployed or undocumented immigrants; “strivers,” who are middle class and consider their work a side hustle; and “success stories,” for whom their gig economy job has turned into the dream everyone wants.
By that measure, Jeff Carpenter considers his work essential to his way of life. Driving for Uber and Lyft provided the 30-year-old Revere resident with enough income to move out of his mother’s home, buy a new car, Patriots’ playoff tickets and perhaps most significantly, quit one of the two restaurant jobs he was working。 Carpenter, 30, is a recovering alcoholic who just two years ago was living homeless in Gloucester. He worked his way back from homelessness through rehab, relapsed, and then got sober again.
He now works four nights a week at Legal Sea Foods in Peabody when he’s not driving. If it’s not a Sunday during football season though, it’s difficult to find him when he’s not driving.
By 10 a.m. every day Carpenter is on the road for Uber and Lyft until he heads to Peabody for the start of a 3 p.m. shift in the kitchen. Then, depending on the day of the week, he’ll drive after he finishes cooking at 10 p.m. If he’s tired after a work day that’s already lasted 12 hours he’ll go home. Other days, he’ll continue driving until 3 a.m. Once, he was so tired that after his last customer wanted to go all the way to Hull, he pulled into the parking lot of a nearby beach and slept for three hours.
He has to hustle, but so long as the money is there, Carpenter can see himself sticking with Uber and Lyft for the long haul. He never went to college, and doesn’t see any other opportunity that gives him the same flexibility. He isn’t ready to leave Legal Seafoods anytime soon though. They’re one of the best restaurants he’s ever worked for in his 15 years or so in the industry.
“It’s about having some type of balance,” Carpenter said. “If I had to depend on all my money from driving and I did have a slow week, that'd be tough.”
Carpenter has already stuck with his gig job for longer than a number of American gig workers. Participation is often short-lived, according to a JP Morgan study. One in six participants end their gig work within the first three months. More than half drop out after 12 months. Earnings have decreased as well, and if the money does not remain steady, workers will likely be hesitant to participate. Carpenter spends a lot of money on his car to make sure it’s ready to go. If profits decrease, he won’t be able to afford to do that anymore.
This is one of the biggest differences between the gig economy and the regular economy, according to Richard Freeman, a chair in economics at Harvard University.
“There's more [responsibility] placed on the individual worker, which maybe have some virtues, but the worker doesn't have the same protections. And they take the sort of greater riskiness in the job … a lot of the gig economy jobs tend to be short-term...In that sense, they're great, because it's an easy way to make money in a short-term period. But that's not giving you a very long-term career.”
Adjunct professors often must piece together several different jobs to make a living. The same often goes for academic tutors.
Sue Brody is a 50-year-old part-timer at Northeastern University’s international tutoring center, where she’s worked since September, 2012.
“I like it,” said Brody. “I wish it was more than 20 hours.”
Brody makes ends meet stringing together work as a tutor for several colleges and a test proctor at Roxbury Community College. Previously, she worked in admissions at Boston Architectural College. She loves writing and working with students. And she likes that when she goes home, she feels like she helped those students and contributed in some way to their day.
But can Brody make a living by tutoring?
“Those positions are unfortunately very difficult because it is just easier for the university to hire more part-time tutors than one or two full-time tutors,” she said.
Eric Fanelli’s gig job used to be a hobby and that brought in extra income. He bought used hockey gear in bulk from local colleges, then sold the gear on SidelineSwap.com, an online marketplace. Over the past few years, he’s sold more than 3,000 items on the site. Currently, there are more than 700 items for sale.
Now, Fanelli Hockey is now his full-time job. He left Ryder — and a salary around $100,000 a year — after 13 years in late 2017. There were certain things that helped Eric began this gig in his late 30s. An already-established source of income was one of them.
This is a key factor for the success stories for Ravenelle. They “are coming in with a high level of financial capital.” Demographically, they tend to be white males, and often identify as entrepreneurs.
“My parents helped me out, I got a bank loan that was based off of years doing business with a bank. When I took my loan I was working full time and had income from the full-time job. It wasn't just like ‘oh hey i'm going to start this business.”
The venture came at a cost, though. Fanelli’s annual income hovers around $45,000 now, less than half of what he made at his former day job. His family is able to obtain benefits such as healthcare through his wife. But the flexibility gives him more time to spend with his three daughters, whose hockey teams he coaches. Eric spends his precious time focusing on what he wants to do. It’s worth it to him.
“Being young, I don't think it ever would have been possible.
Eric Fanelli
There was a point in time, according to Harvard University economics chair Richard Freeman, when people thought the gig economy could only grow exponentially. Freeman doesn’t think that’s the future looks like though.
“It's likely to be a reasonably permanent part of the economy offering opportunities for young people or people who can get the bulk of their income, their lifetime income, from some more permanent source,” he said. “There's always a possibility that more and more of the companies will outsource their work to potentially gig-type people.“
Ravenelle thinks that it’s less of a new-age movement in the workforce, and more like resurgence of the type of work that many Americans relied on.
“It's app enabled, but this disruption is really just returning us to a workplace like our great grandparents had,” she said. “It's rolling back a hundred years, more than a hundred years of workplace protection and doing it in the name of modernity.”