The winners and the losers of the platform economy: who participates?

Abstract

The platform economy is rapidly transforming the dynamics of the labor market. Optimists argue platform work functions as a social equalizer, opening opportunities for additional earnings for those who need it most. Pessimists suggest that the platform economy widens earning disparities by providing additional income to people who already have good jobs. We contribute to this debate by examining who participates in the platform economy and their motivation for participation, using a US nationally representative sample. Our findings offer support for both perspectives. Those who participated in labor-exchange platforms were more likely to come from disadvantaged backgrounds. By contrast, those who participated in online selling platforms were more likely to come from more affluent backgrounds. When we further examined different types of platform work, we found that different types of platform work were performed by different demographic and social groups. In addition, participation in some platform work, such as rideshare driving and house/laundry cleaning, is motivated out of necessity, while other platform work, such as selling used goods and performing online tasks, is generally used to supplement incomes. Distinct occupations tend to benefit different social groups in different ways and, taken together, disadvantaged groups are less likely to perform types of platform work that would improve their economic position and reduce income disparities. This tends to offer more support for the pessimist’s perspective. We conclude that the platform economy is strongly segregated by occupation and it should be examined as a set of distinct occupations rather than a homogenous industry.

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