“Gig economy” looking up in Wisconsin

With the explosive growth of ride-sharing apps in recent years, and some predicting a steady trend toward more contractor jobs, the “gig economy” appears on the rise in Wisconsin.

This phenomenon was the topic of the Tech Council’s latest Innovation Network luncheon in Madison, which featured a panel discussion with experts.

Wisconsin Technology Council President Tom Still broadly defines the gig economy as “a climate in which temporary positions are common, and organizations contract with independent workers for short-term engagements.”

“Intuit predicted by 2020 — which is not that far away — 40 percent of American workers will be independent contractors or working a second gig job,” Still said.

Still points to several factors contributing to the growth of this more flexible system, like a more mobile workforce and an increased ability to work remotely.

“We all, I think, know in this room… the pace of work is changing,” said Traci Scherck, senior human resources consultant with HKP, a workforce management firm providing services in all 50 states. “The normal worker doesn’t always work 40 hours a week; we’re definitely looking for flexibility. And that’s where you find in the gig economy — you have that flexibility, but you also have the ability to go do what your passion is, where you sometimes can’t find that in a day job.”

And Still pointed out that although Madison has an educated, skilled workforce, that’s not true everywhere in the country.

“Employers can select the best individuals for a specific project from a larger pool than what may be available in any given area,” Still said.

Carrol Chang, general manager for Uber in Wisconsin, explained that she has to balance the concerns of two marketplaces: that of the customers, and that of the drivers, calling them “the lifeblood of the company.”

Uber’s drivers are employed as independent contractors, and file their own taxes. The company is currently expanding in Wisconsin, with new hubs popping up recently in Eau Claire and La Crosse.

“When we have happy riders and happy drivers, it’s nirvana, for us,” Chang said. “We’ve created the technology and we’ve created a platform, but it’s really the riders and drivers and the marketplace that are having a need on both sides, and are being matched together.”

But being a contractor can be difficult, according to Kevin Kiser, head of brand strategy and communications for startup insurance firm Bunker.

“There’s so much back-office stuff that goes into it; you have to do your own sales, you have to do your own payroll, you have to report back to the organizations you’re working for — so I think there’s a lot more that goes into it than people realize,” Kiser said.

Bunker, which has offices in San Francisco and Madison, just closed a Series A funding round for $6 million. Kiser predicts the technological and cultural trends associated with the gig economy will change how companies operate and hire talent, much like how cloud servicing revolutionized companies’ tech departments nearly a decade ago.

“So there were all these challenges that IT had to go through over the last 10 years, and that same transformation or transition is happening with human resources now,” Kiser said.

And as for Uber replacing its drivers with autonomous vehicles, Chang sees that as “a future that’s pretty far away.”

“When you think back to the advent of ATMs in the banking industry, people were scared, like ‘Well, this is going to put all bank tellers out of a job, isn’t it?’” she said. “And actually, what happened is that the retail footprint of banks grew, and not only did bank tellers not go out of a job, but they actually grew.”

She says she “sees something potentially similar with autonomous vehicles.”

–By Alex Moe