We’ve hit peak gig economy, according to JP Morgan
The number of people racing to make money from driving an Uber, offering their services on TaskRabbit or renting out a spare room on Airbnb has peaked, according to one top investment bank.
Growth in the number of people participating in the gig economy has slowed and is now plateauing, new research from JP Morgan has found, after analysing nearly a quarter of a million people and how they use more than 40 different platforms.
The amount of money people are earning from the platform has fallen by six per cent since June 2014 on labour platforms which coincides with a cut back on wages. The turnover of people using them was found to be high – more than half leave the gig economy within a year while one in six are news users within any given month.
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Labour platforms are considered those where tasks are performed, such as Uber and TaskRabbit, while capital platforms are those where people sell goods or rents assets, such as eBay or Airbnb.
The bank believes people are turning away from making money from the gig economy as the traditional labour market improves, and this could impact on future recruitment and retention of people – and ultimately the overall growth of platforms.
“The online platform economy continues to grow but the pace of growth has slowed dramatically,” said president and chief executive of the JP Morgan Chase Institute, Diana Farrell.
“As unemployment falls and more people gain traditional jobs, they are less likely to participate in the online platform economy and more likely to exit.”
The report notes that platforms may have to make work more sustainable and supportive for independent workers for the businesses to continue growing.
"These trends underscore that growth in online platform participation is highly dependent on attracting new participants or increasing the attachment of existing participants," it said.
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The research comes as independent workers push for greater employment rights.
Two Uber drivers successfully won an employment tribunal where they argued they were entitled to workers benefits such as holiday and sickness pay, Uber is appealing the decision. Drivers working for Deliveroo are asking for union recognition and have threatened to take the startup to a tribunal if they are not.
Previous research from JP Morgan estimates that more than 2.5m people each month were taking part in the online sharing economy, while separate research by Lloyds estimates that 17m Brits take part.