In the report released Monday, the JPMorgan Chase Institute, a unit of the global bank, found that the majority of people who earn income from what it calls the “online platform economy” are active on such sites only three months or less a year. The average monthly earnings was just $828 in 2017, a 20 percent increase over 2013 but still only enough income to be considered a supplementary source. And although earnings from such sites represent a major source of income during the months they participate, it makes up just 20 percent of income for those who participated at any point in the prior year, underscoring the uneven ways the “gig economy” is buoying Americans' financial lives.
“This still does not really look like a traditional job,” said Fiona Greig, director of consumer research for the institute, which examined payments from 128 online platforms to the checking accounts of 2.3 million distinct users. (The accounts were made anonymous for the research.) “The vast majority of people are doing this on a sporadic basis.”
The trend line in monthly income also looked very different depending on which type of “gig economy” sites JPMorgan examined. The average monthly earnings among workers who used transportation-related apps in a given month (services such as Uber and Lyft that transport people, or delivery services that transport food or other items) actually dropped by 53 percent between 2013 and 2017, from $1,469 a month to $783. Meanwhile, the same figure increased 69 percent among “leasing” platforms (sites such as Airbnb) and remained relatively stable among “selling” sites (eBay or Etsy) and those that offer non-transport work (TaskRabbit, say, or a dog-walking service).
Greig said the reason for the lower average monthly earnings among users of transport apps was not clear, but “could be a drop in wages, or it could be a drop in hours,” or “it could be, with a huge growth in the number of drivers, that we see prices fall.” But they don’t really know. “All we observe is the cash arriving in people’s accounts.” JPMorgan has access to the income that users of the sites receive, but not their expenses; the study also notes that it cannot see how many hours drivers worked.
A drop in the unemployment rate over the same period could also be a factor, Greig said: “More and more, people are busy with a job, and so they may have fewer hours” available to try to make extra cash on the side.
In a Medium post, Uber senior economist Libby Mishkin wrote that the study “reinforce[s] what we and many others have been saying for some time ... that growth is driven, in large part, by people who use platforms like Uber on the side,” but it “comes up short on its analysis of driver earnings.”
Mishkin wrote that “if the share of our partners who drive only occasionally has increased over time, as it has, it stands to reason that the average of every driver’s monthly (or for that matter, weekly or yearly) earnings would decrease.” The post also pointed to research Uber did in partnership with Princeton University economist Alan Krueger that found average hourly earnings for Uber drivers have remained stable.
Lyft also took issue with the way the data had been presented.
“The fact that this study did not examine hourly earnings, the metric that drivers care most about, has resulted in misleading headlines. Had it done so, the results would have shown stable driver earnings in recent years,” Lyft spokesman Adrian Durbin said in a statement. “Many more drivers are choosing to earn with Lyft on a part-time basis, often fewer than ten hours per week,” and value the flexibility.
That idea — that more drivers are doing the job for fewer hours as add-on income — is consistent with findings from Katharine Abraham, a professor at the University of Maryland and a former Bureau of Labor Statistics commissioner. In her research, she said, “over a really short period of time we saw a big increase in the share of drivers who were combining wage and salary income with driving income — suggesting to us it was supplemental.”
Meanwhile, Greig suggested that the big jump in earnings among users of “leasing” sites such as Airbnb could be because of increased demand. People, she said, are now “leasing all kinds of things — including parking spots — and with that increase in demand we see more people organizing their life to generate income."
She said the mix of properties being offered could also change the numbers, as more people grow increasingly comfortable with renting luxury vacation homes or other higher-income-producing properties through sharing economy sites.
JPMorgan Chase’s data may be biased toward its customer base (which is slightly younger, more male and more likely to be based in the western United States) and is limited, of course, to income from online sites that can be identified in a person’s checking account. (Abraham notes, for example, that other informal sources of income, such as consulting or personal service jobs, can be even more important.) But by looking at actual account inflows, the study gets around some of the confusion in other surveys about what really constitutes alternative work. “One of the things we know is it’s very hard to measure this activity,” Abraham said.
Real change may be slow to come not only to employment, Greig said, but to industry disruption, too. Although the taxi and limousine industries have been clearly rattled by Uber and Lyft, “that’s not really happening in other sectors,” she said. “While we’ve seen incredible attempts at the Uber of dog walking or the Uber for massages, we’re not seeing a level of participation [by workers] that would suggest these platforms are starting to disrupt many industries.”