How Uber-type jobs are driving inequality

'On-demand' jobs such as Uber-type drivers fall into a category of workers that are struggling to make enough money to live on, according to new research. Photo / Thinkstock

Whatever you call the new sector built on "platforms" that allow independent workers to find individual clients - think Uber, AirBnb, Taskrabbit, etc. - you'll probably acknowledge that it's got some drawbacks.

While many of these app-based exchanges allow people to find work in ways that otherwise wouldn't be possible, there's mounting anecdotal evidence that those cumulative income streams don't generate enough to make a living.

And now, there's some statistical evidence as well. This week, a group called Requests for Startups released results from a survey of 897 people who've worked with 78 different companies that fall into the "on-demand economy" bucket. It's a rough and imperfect sample, but at a time when there's still precious little data on the characteristics of this new workforce, it gives us some idea of what they're going through.

The topline finding: These workers' biggest problem is making enough money. That was the most common reason for these people to drop the job they had, with 42.9 per cent saying it didn't generate enough income. And part of that has to do with the fact that they just couldn't get enough work, with 49.2 per cent of respondents saying lack of hours was their biggest "pain point."

Of course, all those delivery drivers, room-renters, personal shoppers, movers and other odd-jobbers have other complaints. Many of them have trouble managing their finances and getting insurance for health, cars and other needs. Plenty just don't enjoy the work.

Not making a sufficient income is a general feature of irregular work arrangements.

But not making a sufficient income is a general feature of irregular work arrangements. We learned a lot more about the disparity between those and more traditional jobs on Thursday, with the release of a massive report on inequality from the Organization for Economic Co-operation and Development.

The OECD took in statistics from 29 developed countries (not including the US) to assess just how much different forms of "non-standard" employment - from permanent part-time work to temporary full-time work - has on rising income disparity both across and within nations.

The results were definitive. Non-standard work has grown much faster than traditional employment following the economic crash of 2008, and has probably kept more people in the labour force and increased earnings in the aggregate. But it's also clear that part-time and temporary work pays less on an hourly basis, especially for young people and those with less education. Starting out by making less can impact a worker's long-term earning potential, which the developed world will start to feel down the road. And it's fueling rising inequality right now.

So what do we do about the increasing number of irregular jobs out there, in the on-demand economy or otherwise? The OECD says it's not necessarily a good idea to try to get rid of them. Lots of people like working outside a normal 9 to 5, for various reasons: Part-time work can allow one parent in a household to remain in the labour market rather than dropping out entirely, for example, while the other parent works full time.

Rather, the organisation suggests that governments look to help non-traditional workers increase their earnings potential, both by making sure that temporary work is compensated at the same level as permanent work for the same tasks, and restructuring safety nets to cater to people who might not receive benefits like health insurance from a steady employer.

It's also important to increase opportunities for people to access regular jobs if they want one. In doing so, the OECD report illuminates a trade-off: Countries that have the strongest protections for workers in traditional jobs also tend to have the highest shares of non-standard work, suggesting that making life great for a few people can have consequences for the rest.

DePillis is a reporter focusing on labor, business, and housing.