Sharing economy makes it pay to work on your own

After six months of looking for a full-time job, 49-year-old Emily Cherin found plenty of part-time work through TaskRabbit, an odd-jobs job site.

"Oh my God, it saved me," said the energetic New Jersey native. "My world just sort of exploded."

Cherin is one of an increasing number of Americans who is freelancing. A 2010 survey by Intuit forecast that by 2020, 40 percent of the workforce, or 60 million Americans, will be doing some kind freelance work, up from the current estimate of 33 percent.

A few things are driving the trend toward freelancing. First, established companies in older industries continue to outsource what were formally full-time jobs. Second, the sharing economy is allowing many people to supplement their current incomes, or make a full-time job out of part-time work.

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"What we're seeing is that these platforms, these share economy platforms are really changing the structure of business itself," said Sara Horowitz, executive director of the Brooklyn, New York-based Freelancers Union. "What is so clear is that it's now in every sector from finance, to health, to security. Really, you name any kind of business, and this is how the new workforce is being structured."

TaskRabbit
Source: CNBC

While Horowitz welcomes the work for the union's 300,000 members, she is concerned about how the growing reliance on freelancers will impact the overall economy. Because freelance work can be uncertain, Horowitz maintains these people are less likely to spend what they earn, saving their money for when work dries up.

"If we don't address the No. 1 issue of episodic income and risk, we are not going to see a recovery about consumption," Horowitz said, suggesting this has long-term implications for economic growth as consumer spending accounts for roughly two-thirds of GDP.

Horowitz said as freelancers become an increasingly important part of the workforce, the government may have to step in with programs that would help them maintain a more stable income. She speculates we might see the government set up some kind of a tax-free account where freelancers could stash funds to be accessed when they are not working.

Having a safety net like that, Hororwitz believes, could go a long way in making freelance work a more attractive option for people who are still focused on working full time for a company.

People like Cherin. Make no mistake, the former chef, radio broadcaster and artist loves what she does with TaskRabbit.

"I've been hired to write a love letter and deliver a Frappuccino," she said. "I was running out to Brooklyn buying real hair for people and sending it to Miami for a hot date for somebody. I mean really incredible stuff."

By doing two or three tasks a day, Cherin is now grossing $3,500 a month. TaskRabbit takes a 30 percent cut of her first task and 15 percent of the rest. It is not a bad income, but Cherin wants a more stable gig.

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"Because I'm older, it's really important for me to know exactly what I'm making," she said. "It gets a little scarier as you get older."

Still, some are finding the sharing economy not only provides them with enough part-time work to earn a full-time wage, they may earn more than what they earned working for a corporation or small business.

"I've got clear evidence that the wage rates on TaskRabbit across every profession, are significantly higher than the Bureau of Labor Statistics average for the same profession," said Arun Sundararajan, a professor at New York University's Stern School of Business.

TaskRabbit Emily Cherin on a task
Karina Frayter | CNBC
TaskRabbit Emily Cherin on a task

Sundararajan said because customers will rate a "taskers" performance on the website, taskers who engage in things like plumbing, electrical work, editing or moving, can charge higher rates if they get good reviews. Those assessments then provide another benefit for a tasker, more jobs.

"The emergence of the trust infrastructure has big advantages for high-quality providers," he said. "Often people stay out of marketplaces because they don't know how good the product they're getting is. When you get clear quality signals through platforms like TaskRabbit, it increases the number of people who are willing to hire the service providers."

Leah Busque, who founded TaskRabbit in 2008, said there seems to be an unquenchable demand for the services the company offers.

"We're live in 20 cities across the U.S.," she said. "London is our first international market. We get emails from people every day all over the world asking when TaskRabbit is going to launch in their area."

If there are future launches, Busque said they would be in highly populated, urban areas. But as important as expanding the company is, Busque said so too is taking care of its taskers. The company's aim is to ensure they have the tools and resources they need to do their jobs well. That means taskers can buy health insurance through TaskRabbit, while the company itself will insure the tasker for jobs they do. The San Francisco-based firm also offers taskers discounts on transportation, phones and messaging.


Leah Busque, TaskRabbit CEO
Source: CNBC
Leah Busque, TaskRabbit CEO

"We really want to be known as a place that is, you know, really thinking through how we can make our taskers successful," Busque said. "Not just from a TaskRabbit.com standpoint, but successful in life and to have a sustainable model they are happy in."

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Busque said only about 10 percent of the firm's taskers work enough, and earn enough to make it their full-time job. Typically these "full time" contractors will earn about $6,000 to $7,000 a month, she said, the other 90 percent are part-time taskers, looking to add some extra income to the household.

"There's a great story of a tasker who is a stay-at-home mom and the money she earns on TaskRabbit she utilizes to take her family on vacation every year," said Busque.

The opportunity to pick up some extra work, even when she lands a full-time job is one reason Cherin expects to be a tasker over the long term.

"I think I'll always keep my hand in TaskRabbit," she said, noting the ability to add some extra income to a steady base would be "nice."