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U.S. Department of Commerce narrowly defines “gig economy”

As described in the summary below, the U.S. Department of Commerce, Office of the Chief Economist, has weighed in on the “gig economy”.  In this report, they disregarded the larger implications of this trend – for example, people hammering together part-time and other non-traditional employment, the make a living, to just address “Uber-like” sharing services which they call “digital matching services”.
With this limited definition, it is not surprising that they estimated that only 2.7 million Americans are participating in this economy by providing services for on-demand platforms.
Digital Matching Firms: A New Definition in the “Sharing Economy” Space
Summary from Office of the Chief Economist, U.S. Department of Commerce
Increasingly, consumers and independent service providers are engaging in transactions facilitated by an Internet-based platform. The digital firms that provide the platforms are often collectively referred to as belonging to the “sharing” or “collaborative” economies, among other descriptors. However, in this paper, we narrow the focus and propose a definition of “digital matching firms” that exhibit the following characteristics:
  1. They use information technology (IT systems), typically available via web-based platforms, such as mobile “apps” on Internet- enabled devices, to facilitate peer-to-peer transactions.
  2. They rely on user-based rating systems for quality control, ensuring a level of trust between consumers and service providers who have not previously met.
  3. They offer the workers who provide services via digital matching platforms flexibility in deciding their typical working hours.
  4. To the extent that tools and assets are necessary to provide a service, digital matching firms rely on the workers using their own.

In addition to defining these “digital matching services” the report offers an initial assessment of its size and scope based on publicly available data on its largest firms, as well as an examination of its potential effect on consumers and service providers. The report closes with an overview of the benefits and challenges emerging from the growth of these firms.

Updated: January 21, 2017 — 11:30 pm

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