1099, Being Freelancer, Freelancers, Future of Work, On Your Own, Self-Employed, Uber

The Five Faces of the On-Demand Economy

Originally published at Smallbizlabs.com

Last week Intuit released The Five Faces of the On-Demand Economy, which covers 5 common profiles of on-demand workers.

This is a follow on report to their On-Demand Workforce report from several weeks ago, which covers the motivations, attitudes and demographics of those working via on-demand economy (ODE) work intermediation platforms such as Uber, Upwork, Fiverr, etc.

The Five Faces and their percentage share of all on-demand economy workers are:

  • The Business Builders – Primarily driven by the desire to be their own boss, they represent 22 percent of on-demand workers.
  • The Career Freelancers – Happily building a career through independent work; 20 percent.
  • The Side Giggers – Seeking financial stability by supplementing existing income; 26 percent.
  • The Passionistas – Looking for the flexibility to do something they love; 14 percent.
  • The Substituters – Replacing a traditional job that is no longer available; 18 percent.

These profiles were developed using cluster analysis to group ODE workers who share similar motivations and attitudes.

As Intuit VP Alex Chriss points out in his article The Future of Work Doesn’t Look Like You Think it Does, these groups are not fixed. Key quote:

The data shows five different faces. But in meeting hundreds of our customers I have come to appreciate that these profiles are fluid and there are often several motivations that influence people’s decisions on how to own their own career.

This is an excellent point. These “faces” – much like the pirate’s code – should be seen “more as guideline than actual rules“.

The reason these faces are important is they show how differently ODE workers view ODE work.

Satisfaction is a good example. As the chart below shows, most Substituters are not sastified with ODE work while the vast majority of Business Builders and Career Freelancers are.

See the report for more differences and details by segment.

Emergent Research worked with Intuit on this study.

1099, Being Freelancer, Companies, Finding Jobs, Freelancers, Future of Work, Income, Industry Research, Insurance, News, On Your Own, People, Self-Employed, Uber, Your rights: Presidential Election, Laws, etc.

Portable Benefits for the On-Demand Worker

The emergence of the gig economy has opened an important debate about having portable health and other benefits for the On-Demand Worker. There has been a number of calls for a new category for those who occupy the gray area between employees and independent contractors. Freelancers often work through a middle man or a marketplace (think Upwork.com or 99Designs) or an intermediary, typically an “app,” that customers use to identify themselves as needing a service—for example, a car ride, landscaping service, etc. This enables the employer to maintain some sort of arms-length distance from the worker. (We all know this is often broken, however). How can you work for someone without them giving you some sort of direction?

It’s increasing, but today it appears that at least about 600,000 or .4% of the US Workforce work with an online intermediator. The Hamilton Project at Brookings (I once interned there while I was a student across the street at Johns Hopkin’s University’s SAIS program across the street), recently hosted a gig economy event where Brookings made a proposal for  Modernizing Labor Laws in the Online Gig Economy. The talk focused on health and other benefits, and how to ‘force these new forms of work (from Uber, etc.) into a traditional employment relationship could be an existential threat to the emergence of online-intermediated work, with adverse consequences for workers, consumers, businesses, and the economy. “One of their One of the key benefits they proposed was portable benefits, which is a fascinating idea because (Independent contractors tend to have multiple gigs at one time). Their definition:

As we are defining it, the online gig economy involves the use of an Internet-based app to match customers to workers who perform discrete personal tasks, such as driving a passenger from point A to point B, or delivering a meal to a customer’s house. Note that this definition excludes intermediaries that facilitate the sale of goods and impersonal services to customers, such as TeacherPayTeachers.com, a Web site where teachers sell lesson plans and other non-personal services to other teachers, and Etsy.com, a Web site where individuals sell handmade or vintage goods. It also excludes Airbnb, a Web site where people can rent apartments, houses, and other accommodations.

The authors of the Hamilton Report highlight that ‘because it is conceptually impossible to attribute their (workers’s) work hours to any single intermediary.” Today, these independent workers do not qualify for hours-based benefits, including overtime or minimum wage requirements. These independent contractors rarely, if ever, qualify for unemployment insurance benefits. If intermediaries could pool independent workers, however, for purposes of purchasing and providing insurance and other benefits at lower cost and higher quality without the risk that their relationship will be transformed into an employment relationship, then they might be open to pooling their resources and having portable benefits for the contingent workforce.

The Ubers of the worls could then save on the costs if they have to eventually hire these workers full-time and on legal fees (although Uber has changed their driver terms of service agreement that bars drivers from participating in class action lawsuits against the company and instead requires them to enter into arbitration in the case of disputes).

As Steve King points out in his short analysis of this proposal, this new portable benefits law probably should include gig economy workers who work in the B2B sector, or sell goods, or rent real estate, but they do. But even though they are excluded from their analysis, they would likely be included in any portable benefit laws. Portable benefits seems to be a hot topic. Next week the Aspen Institute is holding a workshop on portable benefits.

Protection of the 1099 is important. I have heard of companies (the employer and the intermediary) using algorithmic scheduling to ensure their works never go beyond 29 hours of work a week, which ensures they don’t have to pay them health benefits or provide the other goodies full-time employees receive. It’s important to figure out how to address this barrier to benefits.  Ouch! Talk about Big Data hurting the worker!

Another reason to address this is that Brad Smith, the CEO of Intuit and one of the best leaders I have ever worked for, has indicated that his company’s data data shows that 40% of their self-employed customers also have income from a W2 job. (I know several people who wear these two hats). So this problem of multiple employers with different tax and benefit regimes started way before the Ubers, Lyfts, Instacarts came on the scene.

Portable Benefits basically means a person should be able to use the same benefits when they work for different on-demand companies. The Hamilton proposal is a start – it has accelerated the discussion about a new class of employees or at least the call for examining how workers are currently classified. Their proposal really doesn’t focus on online or offline, but instead stresses that workers should be protected and receive benefits. As the chart below indicates, this will continue to become an increasingly important issue to address in our On-Demand Society.

You can read The Hamilton Report here

Community, Future of Work, Gadgets and Apps, Industry Research, News, The American Dream

Mobile Moms and the Sharing Economy

Recently BabyCenter.com announced it’s latest findings from its U.S. Mobile Mom 2015: The Sharing Economy report. It outlined how moms are participating in our On-Demand Society. Some facts about and results from the survey.

  • For the survey Baby Center contacted Mom’s in the top 10 U.S. DMAs – Atlanta, Boston, Chicago, Dallas-Ft.Worth, Houston, Los Angeles, New York, Philadelphia, San Francisco Bay Area, and Washington, D.C.
  • 42% of moms in those urban markets say they have tried a “sharing economy” or concierge-type app in at least one of these categories: beauty on-demand, clothing rental, grocery delivery, home cleaning, household chores, private car/taxi, vacation/temporary home rental, and valet/parking assistance.
  • San Francisco, where many early adopters of new technologies live,  claims the most moms on the “on-demand” bandwagon, with 56% saying they have tried one. Outside of those major markets, the percentage of moms who have used one of these apps drops to just 21%.
  • The study also shows that moms’ lack of familiarity with these services is a critical stumbling block in greater penetration across the board.
  • When talking to mothers about household chore services like TaskRabbit and Airtasker, nearly 2 out of 5 in each of the top 10 DMAs said they were not acquainted with these types of “sharing economy” apps.
  • Three out of 5 moms who live outside those urban centers said the same. However, when asked, moms showed strong interest in using a household chore service app – 60-70% in top markets and 57% outside – pointing to a disconnect and missed opportunity between a target audience and utilities they want and need.
  • There are two categories of “sharing economy” apps that are the exception to the rule, with a larger number of moms being familiar or actively using private car/taxi apps, such as Uber and Lyft, and vacation/temporary home rental services, like Airbnb and HomeAway.
  • Private car/taxi mobile services were far and away the most familiar to moms, with those in San Francisco, New York City, and Chicago being most likely to have used those services or be considering giving them a try. Still, numbers take a tumble when talking to moms who live outside of the top urban areas.

 

 

Companies, Freelancers, Future of Work, Politics, The American Dream

Building a Team with Free Agents and Freelancers

Many Millennials are freelancers and free agents. Unfortunately, the people hiring them are older ‘fuddy duddies’ leaders who view Gen Y as  lazy and unloyal. While they do have some unique characteristics (which I outlined in my book, Millennial Leaders), it is important for both parties – the young folks and the older folks – to work together to create a good on-demand relationship between the free agent and the manager.

Duke University’s Basketball Coach, Mike Krzyzewski recently provided some great guidance on how to work with the younger generation. His basketball players and the rest of today’s college athletes  are free agents and freelancers. More and more of them adopt a one-and-done approach, playing with one team for one year and then going pro. Or, if they don’t like their school’s program, they transfer to another university. And it’s not just basketball players who are doing this. More and more white collar professionals are also free agents, riding the trend of a contract-based career.

In this On-Demand Society, Coach K indicated that coaches and leaders need to be more adaptable and allow for some slippage, a word he uses to describe that there is less time to work on fundamentals and to develop the perfect team. Corporate America will increasingly deal with the same issue — the free-agent culture makes it more difficult to build and maintain institutional knowledge and company team-work.

Today’s leaders and young workers both need to be flexible. Corporate leaders can’t just say ‘millennials are spoiled and therefore they can’t learn company’s system or way of doing things. Every generation is different and as Coach K states ‘I have to be in their world and they have to be in my world and there has to be a good common ground where we both meet.’ Coach K tries to understand his younger players perspective on life — to understand their culture, such as their music, their language and event their use of social media. Now is the time for corporate leaders to do the same and to try and understand the needs and wants of Freelancers.

Too many on-demand companies need to be schooled by Coach K. Too many treat 1099s as ‘replaceable parts.’  Although this approach is not new, it will backfire and will come back to haunt them later on. They need to understand that we are in what Reid Hoffman calls a Tour-of-Duty economy (although he used the term to describe full-time employees). Since close to 40% of our workforce will be independent contractors by 2020, their voices at center court (and in superior court) will become louder and louder.  Hopefully, the Uber’s of the world will listen to them.

Click here a good interview with Coach K.

Being Freelancer, Co-Working, Flexibility: Hours, Family, etc., Freelancers, Future of Work, On Your Own, Self-Employed

Coworking: Footloose and Freelancey Free

To be Freelance Free —

Coworking is a growing trend among freelancers, entrepreneurs and small businesses. The idea is simple: individuals work in the same environment but don’t necessarily work together. The emphasis is on community. Coworking spaces not only allow freelancers and entrepreneurs to have a space outside of their home office or local Starbucks but also gives them the opportunity to network with others in the same industry. It is part of the new shared economy focus.

Coworking is a becoming more and more popular, especially amongst technology freelancers and early startups. Most co-workers tend to be younger, averaging about 35  years old. 78% are under 40 years old. More than half are freelancers and only 20% employ other workers. While coworking has primarily been used by technology companies, it has evolved over the past few years. Freelancers and other industries, such as fashion and food, are also using co-working spaces. Not surprisingly, most co-working spaces consists of creative industries, writers, designers and digital media specialists, such as web developers or programmers. Following these two industries is marketing, such as public relations.

While co-working has been around for years, it is especially catching on now for a number of reasons.

    1. Interaction with others: The social experience: It’s challenging to work at home everyday. 91% said coworking helps them with their business by having daily interactions with others. Whether business related or not, working and communicating with others in the same space can boost productivity.
    2. Identify other work opportunities: The networking opportunities in a co-working are abundant. It is a great place to interact with other freelancers and entrepreneurs in the same industry.
    3. Have a physical office space: Many freelancers and entrepreneurs work from home or from a local coffee shop. While these options are free and flexible, it poses certain limitations. Joining a co-working space allows entrepreneurs and small businesses to gather for team meetings or meet with clients. Moving away from your home office from time to time also helps avoid typical distractions, like watching TV or taking an extended break on the couch.
    4. Improve skills: More and more co-working offer sponsor workshops, online training, and member events included these in the cost of membership. It’s a great way to meet other entrepreneurs and also learn about industry trends.
    5. Save money: Coworking enables companies to save money because they don’t have to make a long term commitment to a lease or spend a lot of money on expensive office equipment. Coworking spaces have all the essentials of a typical office, including high-speed internet and conferencing equipment.
    6. Meet deadlines: 64% of people said working in a co-working environment enables them to meet deadlines on time. This is probably the result of watching other dedicated workers around them. 68% said they could also focus better on their work in a co-working environment.
    7. Share knowledge and experience: Co-working enables you to seek out help from others and ties to the trend of the sharing economy. Some spaces are catering to specific groups, such as designers. There’s also been a rapid increase in content and professional development such as content, workshops, etc. Many are even offering to connect participants with domain experts who offer mentoring, advice, etc.

Coworking is not just a shared office space but a community with a culture its own. There’s a debate about whether or not it is a fad, but considering 40% of the workforce are becoming freelancers, it will probably continue to be attractive to entrepreneurs who often face the issue of working on their own. It’s important to note that it is not about a physical space, but a community approach.

Coworking is often confused with Corporate Business Centers, which often target business travelers, mobile workers,  and corporate businesses. They are often more expensive, offer conference rooms, provide administrative assistants and more, although the lines between these two are getting blurred. One of the largest, Regus, is usually associated with big corporations, lawyers, financial consultants, formal environments, and the like. So when it introduced its two new brands, Think Korra and Spaces, Regus had to separate itself from them. These new brands target a younger entrepreneur,  not their usual share of clients. Regus, like many other companies are starting to seem, know that younger generations depend on the more affordable and community oriented co-working spaces.

Coworking spaces are becoming more than just an office space to get some work done. It’s a valuable opportunity for entrepreneurs and freelancers to learn and network from others in the same boat. While it’s a trend, it’s one that here to stay for awhile. The market is becoming more and more saturated with co-working spaces but as the number of freelancers grow in the coming years, the demand for these spaces will only increase as well. The most important aspect to consider when joining a co-working space is community. It’s not just a place with a desk to work on it. As a freelancer or entrepreneur, find the space that is most geared toward what you do. You’ll never know who you’ll meet and the opportunities you’ll come across working in the same spaces as others.