Online gig platforms are reshaping work by creating entrepreneurial opportunities and helping workers start their own businesses, a new study from the London School of Economics suggests. Far from simply displacing jobs, these platforms may foster local entrepreneurship and support new small businesses by redistributing workers from traditional roles.
The researchers analyzed the staggered rollout of TaskRabbit—a platform matching workers with clients for services like cleaning—in U.S. cities between 2008 and 2018. They examined changes in the housekeeping workforce before and after TaskRabbit’s introduction.
Changing labor market
In cities where TaskRabbit launched, the number of housekeeping workers fell by 7.1%. This decline mainly affected middle-skilled workers, such as managers and supervisors, whose tasks could be automated by the platform’s algorithms. However, low-skilled workers performing manual tasks, like janitors and cleaners, saw no significant impact.
Crucially, middle-skilled workers were not simply squeezed out of the industry. Instead, many moved toward self-employment within housekeeping. Most became “incorporated” entrepreneurs, starting formal businesses rather than working as freelancers or independent contractors.
“Our findings challenge the idea that technology only creates or destroys jobs,” the researchers explain. “Platforms like TaskRabbit can shift workers into entrepreneurial roles, offering flexibility and autonomy.”
Lowering barriers
Gig platforms lower traditional barriers to self-employment by connecting workers with clients and providing tools like online ratings to build trust. Starting a business typically requires upfront costs and a critical mass of clients. Gig platforms reduce these challenges, making it easier to succeed independently.
While the study focused on TaskRabbit, the researchers believe its conclusions apply to platforms like Uber and Airbnb. These innovations, they argue, demand adaptive policies that embrace their potential to empower local economies and encourage shared prosperity.
The gig economy, often criticized for disrupting traditional industries, may have a brighter side. By opening doors to entrepreneurship, it offers workers a chance not just to adapt, but to thrive in a changing world.
