Prop 22 allows “ride-hail” and delivery drivers to continue to be treated as independent contractors with some benefit concessions granted by the proposition, including a minimum earnings guarantee based on “engaged time” when a driver is fulfilling a ride or delivery request, but not the time they spend waiting for a gig.

• For more, read CNN.com
• For more about the Gig Economy, see: “The SmallBusiness.com Guide to the Gig (On-Demand) Economy”

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Highly-skilled, independent professionals (freelancers, independent consultants, etc.) who provide services to businesses on a regular basis are, as a group, growing rapidly, according to the third annual Client of Choice studies, recently released by MBO Partners. We asked Steve King, a partner at Emergent Research, and a regular contributor to SmallBusiness.com, to provide us with an overview of this rapid growth. (Note: Steve contributed to the report.

As displayed on this graph, the size of this segment of the U.S. workforce has grown from 4.5 million in 2011 to 7.4 million in 2018.

The growth is seen in diverse segments of the U.S. economy

This rapid growth means it is one of the fastest growing segments of the gig (or sharing) economy. Both supply and demand factors are driving this growth. Here are some of those factors.

• The battle for talent, shortages of such skilled professionals and the increased need for talent agility and flexibility, are resulting in greater use of external talent.
• According to the report, supplier SAP Fieldglass and the supply management analyst firm Ardent Partners both found that over 40 percent of the average corporation’s overall workforce is currently comprised of nonemployee labor. (Ten years ago, it was 16 percent.)
• It’s not just a big industry phenomenon. Small businesses, governments at all levels and non-profit firms are also hiring more independent professionals. 

More highly-skilled workers are opting to be independent professionals

• Many skilled workers are attracted to the work and life autonomy, flexibility, and control in being an independent worker.
• This trend towards the growth of independent professionals is so powerful that Deloitte, who refers to these workers “off-balance sheet employees.” calls the growth in their use one of the two most powerful trends currently impacting the future of work—along with artificial intelligence.

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The freelancer marketplace Upwork went public this morning (Wednesday, October 3, 2018) on the Nasdaq stock exchange. It priced shares at $15 apiece, raising $187 million through its initial public offering. That gave Upwork an initial market capitalization of nearly $1.6 billion.

(We don’t like to use the term “Uber for X,” but if you must call it something, call it an Uber for Freelancers. Competitors include Voices.com, Freelancer.com, and Fiverr.)

In its filing, Upwork included these statistics for the twelve months that ended June 30, 2018.

$1.56 billion | “Gross services volume” (a metric Upwork uses that represents the total amount of transactions carried out between freelancers and clients using its network).

2 million | Number of projects enabled

375,000 | Number of freelancers registered on Upwork

475,000 | Number of clients registered on Upwork

180 | Number of countries served by Upwork

Upwork was formed in 2014 when Elance and oDesk, two of the earliest and largest online talent marketplaces, combined as a new company.

The market is officially open! #UpworkTogether #NYC #NewYork pic.twitter.com/dlwTnp6IQ1

— Nasdaq (@Nasdaq) October 3, 2018

Photo | GettyImages

As we have reviewed before, large retailers–especially those with grocery stores–are in the midst of a great war over what they call, “the last mile.” The term refers to the distance between a grocery store and a customer’s home. While the biggest battles are among large retailers, small specialty shops and restaurants are part of the fray as more and more customers are seeking deliveries of prepared meals (in addition to pizza).  Steve King, our regular contributor on the topic of on-demand (or “gig”) economy,  first predicted this talent war four years ago.

Here are just some of the recent developments on the food delivery front. 

Previously | Working with Postmates, Shopify’s e-commerce merchants can now offer local same-day delivery in 200+ U.S. locations.

Walmart has been testing several on-demand “last mile” options

• Walmart is working on “last mile” solutions with Uber and Deliv in several markets, including Dallas, Denver, Orlando, Phoenix, Tampa, and San Jose.
• Walmart shut down a test program in July that paid Walmart employees for delivering groceries after their regular shifts.
• Using Nashville and New Orleans as pilot markets, Walmart has started a program called Spark Delivery.
• Last week, it announced a pilot program called Spark Delivery.
• Walmart and Google Express have a shopping, delivery relationship

Walmart also investing heavily in its “pickup” program

Walmart pickup program | An online grocery pickup program allowing grocery orders at local stores without getting out of their cars. The “personal shoppers” who work in the pickup program will also support the delivery program.

25,000 | Number of “personal shoppers” who work at Walmart stores, up from 18,000 earlier this year.
1,800 | Number of stores with pickup delivery
2,100 | Number of stores with pickup programs to be open by the end of 2018

Target

Target acquired the delivery firm Shipt, Inc. for $550 million in cash. “The acquisition significantly accelerates Target’s digital fulfillment efforts, bringing same-day delivery services to guests at approximately half of Target stores by early 2018,” the company said in a statement.

Amazon

As we recently reported, Amazon is breaking new ground with its Delivery Service Partnership that will seed the creation and ownership of small delivery services. Amazon also has an on-demand service called Amazon Flex.

Photos | Walmart, GettyImages

An article recently appearing in the New York Times examines Spacious, a startup that transforms unused space – especially restaurants between mealtimes – into shared workspaces. Here is a look at this trend from Steve King, partner in Emergent Research and a regular contributor to SmallBusiness.com on topics related to changing work trends impacting small businesses, including the on-demand (gig) economy and the evolution of co-working space.

The company Spacious is helping businesses turn downtime into co-working space time. A co-working space/spa in Kansas City is another example of how empty space and time can be turned into revenue-generating opportunities — and even more creative ideas about what co-working space can be.

New York Times key quote:

TaskRabbit, the on-demand home-service platform acquired last October by Ikea, announced that it has taken down its site and app in order to investigate a cybersecurity incident.

Update: By April 18, the site is back up, accompanied by this letter from CEO Stacy Brown-Philpot.

Founded in 2009, TaskRabbit was an early “gig-economy” success. Using a smartphone app to facilitate task-matching, TaskRabbit allows customers needing help with a home service to find “taskers” who have the necessary skills. Typical tasks are services like cleaning up a yard, organizing a closet or delivering a package across town. Last October, TaskRabbit was acquired by Ikea.

The company said it was working with a cybersecurity firm but didn’t specify what happened, how many people may have been affected or how it learned of the security breach.

The company said it had notified clients and “taskers,” those who offer their services and have been vetted by the company, and said it would reschedule any uncompleted tasks and compensate workers for the tasks that couldn’t be completed Monday because of the disruption, according to WSJ.com.

The message now appearing on the site’s homepage (4.27.2018)

Dear TaskRabbit Community,

TaskRabbit is currently investigating a cybersecurity incident. We understand how important your personal information is and are working with an outside cybersecurity firm and law enforcement to determine the specifics. The app and the website are offline while our team works on this.

We will be back in contact with you with more information once we have it. As an immediate precaution, if you used the same password on other sites or apps as you did for TaskRabbit, we recommend you change those now.

Thank you for your patience while we investigate the issue and for being such an important part of our community.

– TaskRabbit Team

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Also on SmallBusiness.com

Two Small Business Trends That Contributed to Ikea’s Decision to Buy TaskRabbit | 2017

The rise of the on-demand (or “gig”) economy (like drivers who provide rides via Uber or Lyft) is not only changing the way its participants work, it is also changing how companies provide insurance to those participants.

A recent article in the Economist provides this example: A courier hits and injures a pedestrian.

• If the courier company employs the driver and provides the worker a van and salary, the accident would be covered by a standard commercial insurance policy.
• But on-demand “gig” couriers, who use their own cars and work whenever they choose, must often insure themselves. Even if the courier has personal insurance coverage, it will not usually pay out for accidents that happen while they are driving for work. If the coverage is available, it can be expensive.

This isn’t a problem, it’s an opportunity

Insurance by the hour | The UK startup, Zego, brokers third-party liability insurance for couriers who pay for the insurance by the working hour. Coverage starts when they activate the courier’s smartphone app and stops when they sign off.

Insurance by the mile | Uber drivers, through the insurance broker Aon, can purchase coverage against illness, disability, and death for as little as $0.04 for each mile they drive. If local regulations allow, Uber will raise the rate it pays drivers by the same amount, making it look like an employment benefit but in the context of an independent worker approach.

Insurance by stages of risk | In Ontario, Uber and Lyft both have brokers who have packaged a “three-stage” approach.

Insurance by the user | Since 2011, Airbnb has offered a “host guarantee” against theft and vandalism. While it works like insurance, no third-party firm is involved. Airbnb makes payouts itself.

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Also on SmallBusiness.com

As we have reported extensively, the marketplace of talent called the “on-demand” or “gig” economy is tapping unmet needs that many economists, analysts, and even participants, aren’t yet fully grasping. However, yesterday’s news that Ikea has acquired TaskRabbit could help a mainstream audience learn what’s going on — and perhaps even convince them to participate. (Note: At SmallBusiness.com, we have a big-tent definition of “small business” that includes participants in the gig economy. We also have shared how small businesses are emerging from the on-demand economy. In other words, we believe the 60,000 independent contractors who get jobs via TaskRabbit represent a major wave of small businesses that we will continue to follow for the users of SmallBusiness.com.

Two trends that led Ikea to buy TaskRabbit?

Trend #1 | The Do It For Me (DIFM) customer

Ikea is not only a furniture and home furnishings juggernaut, it is a cultural icon and lifestyle business  (to some) that is so pervasive, stand-up comics can get chuckles just by mentioning its name. It has spawned websites like IkeaHackers.net, communities of Ikea lovers who are devoted to the endless ways that its products can be reconfigured (or “hacked”) into creative uses.

However, for some, the directions for putting together something purchased at Ikea, while creative and easier than similar instructions from other companies, is still somewhat daunting for those who don’t care to be do-it-yourselfers. Many, if not most, customers want someone else to put the “flat box” product together.

Many companies have recognized there is a massive “Do it for me” (DIFM) group that prefers spending a little extra money instead of spending an afternoon spreading out nuts and bolts across the kitchen floor and making a couple of trips to a hardware store. Established companies and startups have stepped in to create an on-demand marketplace for “DIFMers” and those who can do it. One of the earliest and most successful, at least at raising venture capital and reaching more cities, has been TaskRabbit.

Among the many other DIFM players are the merged HomeAdvisor-Angie’s List and Amazon Home Services.

Trend #2 |The on-demand economy is going mainstream

As you are reading this in a section of SmallBusiness.com called, “The SmallBusiness.com Guide to the On-Demand Economy,” you can look on the right side of the screen (or bottom of this article if you’re reading this on a phone) and note several years of articles about the on-demand economy (or gig economy). As we’ve observed, there’s an Uber for everything. You can find startup companies that will do your laundry, bring you booze, walk your dog, and give you a massage.

If the growth of the number of Americans working in the on-demand economy continues its predicted growth, by 2021 it will represent a 23 percent compounded annual growth rate, according to our regular contributor, Steve King. And, as Steve recently wrote, two-thirds of the on-demand economy participants say they are satisfied with their work.

On the downside, however

As we have noted, there are threats to the gig economy. The most obvious one is the legal question regarding the definition of “employee.” With the growth of the on-demand economy, there also could be a talent war. For example, we there already being a high demand for talent in the construction field, the fees that can be charged for certain home services talent are increasing.

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General Motors recently announced a program called “Gig” that rents their all-electric car, the Bolt, to freelance drivers for $229 per week. Part of GM’s Maven set of car sharing options, this offering is aimed at independent drivers working for the various ride-hailing and delivery services. (Article by Steve King, a partner at Emergent Research and a regular contributor to SmallBusiness.com.)