The rise of online gig platforms such as Uber, Airbnb, TaskRabbit, and Just Eat has revolutionized the way we work and interact with services. These platforms have become an integral part of our daily lives, offering convenience and flexibility to both consumers and workers. However, the impact of these platforms on traditional workers in sectors such as taxi services and hospitality has been a topic of debate and concern.
Dr. Aaron Cheng, from the Department of Management at LSE, delved into this issue in his research paper titled ‘Skill-Biased Technical Change, Again? Online Gig Platforms and Local Employment,’ published in Information Systems Research. Dr. Cheng’s research aimed to investigate how the emergence of gig platforms affects incumbent workers in various industries.
To study the impact of gig platforms on traditional workers, Dr. Cheng and his colleagues focused on the housekeeping industry and analyzed the introduction of TaskRabbit, a location-based platform for service matches, in US metropolitan areas between 2008 and 2018. They observed changes in the supply of workers in the housekeeping industry before and after TaskRabbit’s expansion.
The researchers found a significant decrease in the number of housekeeping workers in locations where TaskRabbit operated, particularly among middle-skilled workers such as first-line managers and supervisors. However, rather than displacing these workers, the entry of TaskRabbit led to a redistribution of labor, with many middle-skilled workers transitioning to self-employment within the same industry.
Surprisingly, the researchers noted a rise in self-employment among middle-skilled workers, particularly in the “incorporated” category where individuals start formal businesses. This unexpected outcome highlighted the entrepreneurial opportunities that gig platforms can offer to workers in traditional sectors.
Dr. Cheng’s research challenges the binary narrative often associated with technology and labor markets, emphasizing the need for a nuanced debate on the implications of gig platforms. He suggests that policymakers should support small business creation and provide training and funding to help workers transition to self-employment.
As technology continues to shape the future of work, Dr. Cheng emphasizes the importance of adapting to flexible, task-oriented arrangements. He believes that advancements in AI and digital technology can enhance the efficiency of the gig economy, creating a more dynamic and inclusive labor market.
While acknowledging the criticisms of the gig economy, including job insecurity and potential exploitation, Dr. Cheng advocates for a balanced approach that maximizes the benefits of these platforms while mitigating risks through effective policies and regulations. By fostering innovation, enabling self-employment, and reshaping local economies, the gig economy has the potential to benefit a broader segment of the workforce.
In conclusion, Dr. Cheng’s research sheds light on the complex interplay between technology, labor markets, and entrepreneurship in the era of online gig platforms. By understanding and addressing the challenges and opportunities presented by these platforms, we can work towards creating a more sustainable and inclusive future of work.
