The 4 Greatest Misconceptions about the Gig Economy
by Alani Kuye, Phlatbed
Aside from becoming the largest employer and training resource, the gig-economy has increased entrepreneurship and self-determination in certain regions of the world. Here are some misconceptions of what the gig economy is!
It’s New: The gig-economy is over 40 years old! While most people think of Uber, Lyft, Phlatbed, and TaskRabbit as leaders within the gig economy space, remember Craigslist? Yes, the gig economy is over 40 years old, and currently going through a midlife crisis with Uber, Lyft, and other gig economy companies with regards to current events (scandals, regulatory issues, etc).
When the history of economic transformation in the 21st century is written, Craigslist was the turning point, the catalyst, and the pivotal moment when the gig economy became the Gig-Economy. Furthermore, we need to accept the role of millennials as the generation that brought the gig economy full circle. This will be their legacy (among other things). The gig economy will not only continue to thrive, but it will continue to redefine the way we live, work, relate, communicate, and transact business. I wrote a Medium post about this here.
Companies don’t care about drivers: It’s not just about drivers and grocery delivery. While some Uber and Lyft drivers complain about unfair treatment, the vast majority enjoy the benefits of participating in the gig economy. From discounts, bonuses, holiday gifts, rewards, points, and even cash rewards programs, the gig economy rewards performance and good behavior. Most gig economy companies even go as far as providing driver and customer signup incentives at the company’s own expense.
The gig economy is fundamentally based on trust and social proof in the same manner that cryptocurrency is based on a consensus of collective trust and verification. The shift from institutional trust to a peer to peer trust-based system is increasingly driving this economic change, and its collaborative ecosystems. In a nutshell, the gig economy is a pure meritocracy.
The Gig Economy is a Wild West Frontier: Contrary to popular belief, the gig economy is not a free for all. It’s a well-organized, methodical, research and data driven ecosystem run by competent professionals. It’s not unusual to see Data Scientists Behavioral Analysts, among other STEM professionals within gig economy ranks. Data tells you in no uncertain terms what you already know but have not validated.
In an essay summarizing his findings for the Brookings Institute, Researcher Greg Ferenstein, in a report , postulates that the gig economy is “potentially the world’s largest job training resource. Ferenstein said, “Indeed, all across America, there are individuals and cities thriving through technological change; a common pattern among the most resilient regions and workers is an unusual volume of mixing self-employed skilled and lower-skill wage work.”
What this means is technology, coupled with a desire to succeed beyond traditional methods, has increased entrepreneurship and self-determination in certain regions of the world.
In a nutshell, Disruptors will often face entrenched interests because Preservationism is the antithesis of Freedom and Progress.
Young kids run gig economy the company: This is juxtaposed by the first point. The gig economy has been around for over 40 years! Many Founders and executives today are products of that era. According to the Harvard Business Review, the average startup Founder age is 42. This means not every company is founded by someone who looks like Mark Zuckerberg. These famous cases do not reflect an accurate generalization pattern. The demographic of Founders and gig economy executives is far diverse than popular opinion assumes.
While younger founders aren’t uncommon in the technology space, young people are less common in other industries such as oil and gas or biotechnology, where the average age is closer to 47. The former is characterized by high growth and disruption, while the latter is characterized by anti-disruptive continuity. According to the Harvard Business Review, “The preeminent place of young founders in the popular imagination may therefore reflect disproportionate exposure to a handful of consumer-facing IT industries, such as social media, rather than equally consequential pursuits in heavy industry or business-to-business sectors.”
Since millennials will comprise 40% of the electorate by 2020….we have interesting times ahead. Perhaps the revenge of the nerds is more a revenge of consumers.
Alani Kuye is CEO of Phlatbed, an on-demand consumer logistics company that connects individuals and businesses to a transportation network of drivers via its mobile application. The company is headquartered in Norwalk, Connecticut.
Phlatbed is a proud member of the Connecticut Technology Council.