Eradicating Unemployment with On-Demand Services?

Jessica YungEconomicsLeave a Comment

This week our Macroeconomics lecturer suggested that on-demand services such as Uber and TaskRabbit might eradicate unemployment. He claimed figures showed that unemployed people spent only two hours a week on average looking for jobs, so with Uber etc. they could earn money and work while still having enough time to look for new jobs they’d like to move on to. It a form of freelancing job among these 25 best online jobs, which can be taken up by almost anyone with an internet connection at them at all times.

I’m not comparing on-demand work with permanent jobs – I’m talking about biking with Deliveroo while you’re looking for your next job. That would mean these people technically aren’t unemployed, thereby ‘eradicating unemployment’. (Separate question: will they be eligible to claim unemployment benefits then?)

To investigate this empirically, we would need:

  1. Data on people employed by on-demand services like Uber, TaskRabbit and Deliveroo. Preferably we would have information on
    1. whether or not they were unemployed otherwise,
    2. how long they’d been unemployed,
    3. how long they’d worked for the on-demand company and
    4. whether or not they found another job soon after or made on-demand services their permanent job.
  2. It would also be useful to have unemployment figures.
    1. If unemployment figures include people working with these services, it would be interesting to try to proxy the unemployment rate excluding people working with on-demand services.
    2. If these figures don’t include people working with these services, we could try to see if they seem lower than they would be if on-demand services didn’t exist.

This analysis is different to simply looking at employment within on-demand services (or freelancers or the self-employed) because we are specifically looking at people who would be classified as unemployed and are looking for jobs.

What might the implications of such a study be?

  1. A more detailed understanding of unemployment via breaking down unemployment into people who work while looking for jobs and people who don’t.
  2. Quantifying implications of on-demand services for frictional unemployment.
  3. Being able to better contrast on-demand services against freelancing where you needed to have an established relationship with clients.
  4. Being able to better assess and forecast the impact of on-demand services on labour and unemployment.
  5. Understanding how people are coping with unemployment and what policies or tools might help them most.

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