Workers in ‘gig’ economy worry about future as income vanishes

By: - March 26, 2020 7:28 am

Magician Stephen Spanks said he loves seeing the smiles on kids’ faces as he performs his shows, but his gigs have dried up as people are avoiding large gatherings. Other workers in the gig economy say they are facing similar business slowdowns and fear they won’t be helped enough by a federal stimulus package. Contributed by Stephen Spanks

Lawrenceville-based children’s magician Stephen Spanks is the founder, owner and sole employee of his business, Never Grow Up Magic.

“It’s just me and the rabbit,” he said, referring to his sidekick, Oreo.

A growing number of American workers have, like Spanks, exchanged the relative security of hourly or salaried jobs for the freedom of working in the so-called gig economy, where they are paid by the job and do not have a traditional boss. A downside is they might have trouble qualifying for unemployment benefits at a time when a record number of Americans are filing claims.

But the COVID-19 pandemic is creating a massive disruption in the gig workforce business model, and future income for independent contractors seems much less reliable than just a couple of months ago.  

In 2018, more than one-third of Americans performed gig work in some form, according to Gallup. These one-off workers fill jobs ranging from ridesharing and food delivery to video editing, graphic design, business consultation and, yes, pulling rabbits out of hats.

Many gig workers say they enjoy the flexibility of choosing their own hours, but one common complaint is a lack of benefits, including health insurance and access to unemployment. Some gig workers, from old-fashioned entertainers to app-using rideshare drivers and Airbnb hosts, are already struggling to make ends meet a little over three weeks after Gov. Brian Kemp raised awareness of a looming public health threat through the creation of a coronavirus task force.

Gig workers who ply their trade in front of crowds — people like musicians, event photographers and entertainers — say cancellations are overtaking the booking requests they used to get not long ago. 

For Spanks, parents and caregivers started calling to cancel their engagements about March 12, the day when organizers of sports events and other large gatherings suddenly canceled plans.

“In probably about two days, I saw five, maybe six thousand dollars in income just, poof, down the toilet,” he said. “I had some daycare shows coming up for spring break, they’ve all been canceled on me. I had a couple daycare shows last week canceled, I had six or seven birthday parties in the last two weeks cancel on me, everything I had.”

Normally his weekends are booked, but his last show was March 14.

Spanks’ act is tailored for children ages four to eight. He’s praying things will settle down before the typically busy summer season. If he misses out on his summer camp and daycare shows, he could lose another $20,000 of income, he said.

Though getting paid by the gig is an employment strategy at least as old as musicians selling their talents to a local pub, the term now brings to mind app-based businesses like Uber, Lyft and Airbnb that connect people who need a service to those who can provide it.

The number of people who make a living this way exploded since the Great Recession a decade ago, and gig workers are in uncharted territory as demand for everything other than necessities tanks.

Travel is an early casualty of the push for people to stay home during the coronavirus outbreak. Mirroring a big slump in the hotel industry, Airbnb hosts are reporting lost bookings without customary cancellation fees to soften the blow.

The short-term rental company is offering full refunds to guests who cancel reservations. Typically, the hosts get to determine their own cancellation policies. Some property owners say a slew of cancellations following the announcements are drying up their income.

Claudia Aguirre owns three metro Atlanta properties that she rents out through Airbnb, typically to business travelers or overseas tourists. She said longer term landlords might have trouble collecting rent, but Airbnb hosts have it even worse.

“I can’t just lower the rent like other landlords are doing to help them, or push it off and say you can pay me back later when your job starts again. I’m just straight up getting zero income and having to pay a mortgage. I’m going to go through my savings account or hope that I find more people.”

The Atlanta resident has a day job managing a private tutoring agency, but she said she knows people who rely solely on Airbnb to make their living.

“I have friends that have eight to 10 Airbnbs. … They cannot possibly swing that. They cannot possibly cover it with their savings,” she said.

Drivers for rideshare services like Uber and Lyft are also reporting a downturn due to the spread of the coronavirus, according to the Ride Share Guy blog, which polled drivers earlier this month.

More than 80% of drivers said they are getting fewer ride requests, and nearly a quarter said they have stopped driving entirely because of coronavirus.

A narrow majority of drivers said they were either considering switching to food delivery or already delivered food.

That’s one sector of the gig economy that appears to be thriving during the COVID-19 outbreak.

San Fransisco-based Instacart, an online grocery delivery service, announced plans Monday to bring on 300,000 new gig shoppers over the next three months to help meet demand for doorstep grocery delivery – more than doubling its workforce. About 9,000 of those new shoppers are set to deliver to Georgians.

Instacart is one of several services that offer delivery without contact between the customer and driver with a doorway dropoff. Others include Doordash, Uber Eats and GrubHub.

Lawmakers on Capitol Hill tell reporters they are on the verge of a multi-trillion dollar coronavirus stimulus package, but it’s not clear what support the final product could offer for gig workers.

Spanks, the magician, said he’s not confident it will help people like him.

“I’m so frustrated with our government right now because they’re wanting to give money to Delta Air Lines and they’re wanting to do all this stuff for unemployment insurance, but none of that helps me because I’m self-employed,” he said. “I’m gig income, I’m a private contractor. And there’s nothing that they’re doing that’s going to put money in my account and help me pay my bills.”

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Ross Williams
Ross Williams

Before joining the Georgia Recorder, Ross Williams covered local and state government for the Marietta Daily Journal.Williams' reporting took him from City Hall to homeless camps, from the offices of business executives to the living rooms of grieving parents. His work earned recognition from the Georgia Associated Press Media Editors and the Georgia Press Association, including beat reporting, business writing and non-deadline reporting. A native of Cobb County, Williams holds a bachelor’s degree in English from Atlanta's Oglethorpe University and a master’s in journalism from Northwestern University.