Austin’s gig economy takes shape as workers, companies eschew the traditional employment model

Verna Soria launched her own personal shopping app, Shop with Verna, in 2019. She has worked for several on-demand services companies, including Instacart. (Amy Denney/Community Impact Newspaper)
Verna Soria launched her own personal shopping app, Shop with Verna, in 2019. She has worked for several on-demand services companies, including Instacart. (Amy Denney/Community Impact Newspaper)

Verna Soria launched her own personal shopping app, Shop with Verna, in 2019. She has worked for several on-demand services companies, including Instacart. (Amy Denney/Community Impact Newspaper)

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(Amy Denney, Iain Oldman/Community Impact Newspaper)
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(Mel Stefka/Community Impact Newspaper)
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(Mel Stefka/Community Impact Newspaper)
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(Mel Stefka/Community Impact Newspaper)
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(Mel Stefka/Community Impact Newspaper)
Months before relocating his company to Austin in September, Nick Soman was driving through the outskirts of San Francisco and passed a line of about 10 Uber drivers parked in the lot of an old 76 gas station.

“I thought, ‘What is happening here?’ These are folks that are sleeping in their cars, and they’re sleeping in their cars because they don’t live in San Francisco. ... They drove in from hours away because San Francisco is where the fares are,” he said.

Soman said that experience drove home the gap in services that are afforded to gig workers, or people who work on independent contracts from companies. Soman opened an office in East Austin for his company, Decent, which administers health care plans for independent workers on behalf of the Texas Freelance Association.

Decent is one of several companies in the past year that have either opened offices or wholly relocated their headquarters to Austin with missions and services to support independently contracted workers.

These companies provide a full menu of resources for workers, including banking services, health care plans, retirement planning, tax filing help and invoice assistance. Much like the jobs that Austin workers are connecting to, these services are all available on phones at the click of a button.


“There are going to be a large and growing group of people who need more affordable care,” Soman said. “We’re constantly getting better at serving those people because this future of work is coming.”

AUSTIN’S GIG ECONOMY

The landscape of traditional employment opportunities is shifting in Austin, according to several reports that analyze the freelancer workforce.

Freelance service congregator Fiverr in 2019 commissioned a report on the population of skilled freelancers working in creative, technical or professional positions in the U.S.

According to this report, Austin has the fastest-growing population of skilled independent workers of any U.S. city and is the second-fastest growing city in terms of revenue collected by independent workers. The report found that Austin’s skilled workforce grew more than 25% from 2011-16.

Companies such as Joust, a banking and payment app built specifically for freelancers, are emerging to assist independent workers in managing their time, benefits and finances. The company relocated from Denver to Austin in late 2019 and aims to help freelancers recoup money they would otherwise lose across banking services and nonpayment of invoices.

“The problem we have identified is ... there are too many tools to do something very simple. On average, as a freelancer you use 10 different products to send an invoice. That is complex and expensive,” co-founder and CEO Lamine Zarrad said.

Austin’s burgeoning employment environment is also providing room for diversity in how on-demand companies operate and offer jobs to workers.

Ellis Norman is the head of sales and business development for Adia, an on-demand app for temporary staffing that launched in Austin in October. He said the company’s goal is to help gig workers to find temporary jobs on demand. Unlike many other companies for gig workers, Adia workers are employees and not independent contractors who receive a 1099 tax form.

“Getting consistent work in this environment is not the easiest thing to do,” Norman said. “Flexibility in 2019-20 seems to be the name of the game.”

THE MARKET ON DEMAND

Nationwide, 37% of workers pursued gig work to supplement their main source of income while 18% relied on it for their primary source of income, according to a 2018 report from the U.S. Federal Reserve System.

Just like people have a trusted nanny or mechanic, Northwest Austin resident Verna Soria aims to be a trusted personal shopper. She has been a personal shopper for Instacart for four years, fulfilling more than 5,000 orders.

Soria said her attention to detail, such as picking the perfect produce or finding the exact item a customer ordered, led to customers wanting to request her services. But Instacart does not have this feature. So she said she decided to launch her own personal shopping company in July called Shop with Verna.

However, because customers in Austin have so many options for on-demand services, Soria said growing her own business has been a challenge. She also claims recent changes to Instacart’s tip system have led to her and other shoppers receiving less per order. She said she used to make about $500-$800 per week and now only brings in less than $300 a week.

A representative from Instacart said shoppers have always kept all their tips, but the company clarified its policy in February to separate the tip from the payment for services.

To make up for the lower income, Soria said she took a part-time job as a barista.

“I wanted a steady income to focus on growing my business,” she said.

THE GIG ECOSYSTEM

Catch, a Boston-based app that centralizes benefits for independent workers, is eyeing a move to Austin due in large part to the city’s diverse freelance workforce, co-founder and CEO Kristen Anderson told Community Impact Newspaper.

“The thing that is so cool about Austin is that it is so many different types—musicians, writers, software engineers. The community is so much more expansive,” Anderson said.

Catch, which has been open to the public for about a year, already has close to 1,000 independent workers in Austin using its services.

Catch works to congregate tax withholding information, essential for workers filing 1099 IRS forms, to make payments easy and accurate every month. The app also provides a central hub for independent workers to access everything from health benefits to retirement plans.

While organizing the back end of employment, such as handling benefits and managing finances, can be difficult for some to navigate, an increasing section of the workforce prefers the flexibility of self-employment.

Dillon Gunter is a local musician who uses the app Instawork, which launched in July, to find event and hospitality gigs around town. While Gunter said he works these jobs up to six days a week, he still considers himself a musician first and foremost and utilizes the gig work as a way to supplement his income.

“I absolutely love how Instawork and other gig companies are working to change the dynamic of work in the 21st century,” Gunter said.

An increasing number of app-based services are beginning to crop up on the consumer’s end, too.

When Dana Strong had her son in April, she said using a grocery-delivery service was helpful while she was on maternity leave.

“You’re obviously paying a premium for these services, but you have to balance that,” said Strong, who lives in North Central Austin. “It’s so hard for me to leave my house.”

Now Strong uses another on-demand app called Bambino that helps parents find reputable babysitters fast. The company requires all sitters, who can be as young as 13, to go through a background check. Strong said each sitter lists his or her qualifications, years of experience, rate per hour and a short biography to help parents make the decision.

As the process of becoming an independent worker becomes more painless—and as companies see their employment as a cost-cutting measure—Zarrad said he expects to see the population of gig workers continue to climb.

“There are technologies that empower you to do whatever you want to do. The labor economics are shifting. It is a fundamental shift, not a trend. It is just the way people are going to be working 20-30 years from now,” Zarrad said.
SHARE THIS STORY
By Iain Oldman

Iain Oldman joined Community Impact Newspaper in 2017 after spending two years in Pittsburgh, Pa., where he covered Pittsburgh City Council. His byline has appeared in PublicSource, WESA-FM and Scranton-Times Tribune. Iain worked as the reporter for Community Impact Newspaper's flagship Round Rock/Pflugerville/Hutto edition and is now working as the reporter for Northwest Austin.
By Amy Denney

Amy has been reporting in community journalism since 2007. She worked in the Chicago suburbs for three years before migrating south and joined Community Impact Newspaper in September 2010. Amy has been editor of the Northwest Austin publication since August 2012 and she is also the transportation beat reporter for the Austin area.


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