Report

The online platform economy: has growth peaked?

26 Jan 2017
Description

The growth of the Online Platform Economy (OPE) has been contributing to the changing nature of work. Is this marketplace building momentum towards systemic change in the labor force, or will it remain a small market for supplementary income? In previous work we highlighted that growth in participation on labor and capital platforms has peaked. As of June 2016, participation on labor platforms has doubled year-over-year, but participation on capital platforms has leveled off. In this report, we explore the dynamics of participation and earnings in order to better understand how growth has slowed. We draw from one of the largest samples of platform participants to date: over 240,000 anonymized individuals who have received platform income between October 2012 and June 2016 from one or more of 42 different platforms. Our findings point to several dimensions of how the growth in online platform participation has slowed.

•Monthly earnings from labor platforms have fallen by 6 percent since June 2014, a trend that coincides with wage cuts bysome platforms.

•Turnover in the Online Platform Economy is high. One in six participants in any given month is new, and more than half of participants exit within 12 months. Participants with higher incomes, more stable employment, and younger cohorts are more likely to exit the Online Platform Economy within a year.

•The traditional labor market has strengthened, narrowing the pool of likely platform participants. Non-employed individuals are more likely than the employed to participate in labor platforms and they are more likely to continue participating after 12 months.

In sum, growth in online platform participation is highly dependent on attracting new participants or increasing engagement of existing participants. As outside options improve, recruiting and retaining platform workers might become increasingly difficult and could constrain future growth.

Publication Details
Language: 
English
License Type: 
All Rights Reserved
Published year only: 
2017
12
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