For all those Silicon Valley wannabes in Sacramento’s economic development circles, this should come as encouraging news:
A new study puts our fair city in the top 10 nationally – and not too far behind San Jose and San Francisco – in the growth of the “gig economy.”
The Metropolitan Policy Program at the Brookings Institution, a well-regarded Washington think tank, looked at jobs supported by Uber, Lyft and other ride-sharing firms, and by Airbnb and other room-sharing businesses.
Between 2010 and 2014, employment – including freelancers and independent contractors – grew by 69 percent in the rides sector and by 17 percent in the rooms sector. The surge was concentrated in larger cities. In the rides sector, 92 percent of the growth was in the nation’s top 50 metro areas; for the rooms sector, it was 70 percent.
In ride-sharing employment growth, San Jose ranks first, San Francisco second and Sacramento ninth among the top 50 metros. In room-sharing job growth, San Francisco is second, San Jose fifth and Sacramento 12th.
Overall, job growth in the gig economy is much faster than in the traditional one. Employment grew by 17 percent in the traditional rides sector and 7 percent in the rooms sector over the same period, the study found.
As the gig economy grows in California, lawmakers will have to eventually decide whether it needs more rules.
So far, sharing companies haven’t destroyed their traditional competitors; instead, they appear to be meeting consumer demand or creating new demand, the researchers say.
But they say if firms such as Uber and Airbnb continue to significantly expand, hotels and cab companies will eventually be hurt.
That’s apparently already happening in the Sacramento region for the taxi industry. The study found a 22 percent drop in employment in the traditional ground transportation sector between 2012 and 2014, compared to a 92 percent increase in ride-sharing jobs.
That upheaval is causing conflict. Cabbies have complained that Uber drivers can make pickups at Sacramento International Airport while they’re not allowed to wait curbside.
At the state Capitol, lobbyists for ride-sharing firms are battling those for cab companies, mostly to a stalemate so far. This past session, a bill to regulate ride-sharing prices and require stricter background checks failed, but so did bills to help Uber and Lyft expand.
The issue isn’t going away. As the gig economy grows in California, lawmakers will have to eventually decide whether it needs more rules. The Legislature shouldn’t be in the business of picking winners and losers, but it should make sure that sharing and traditional companies are competing on fair terms.
By the numbers
The percentage changes in employment in gig firms and traditional companies between 2012 and 2014, and national ranking for California metro areas:
- 1. San Jose: gig, +145%; payroll, -31%
- 2. San Francisco: gig, +142%; payroll, +22%
- 3. Los Angeles: gig, +136%; payroll, +13%
- 5. San Diego: gig, +109%; payroll, -1%
- 9. Sacramento: gig, +92%; payroll, -22%
- 2. San Francisco: gig, +43%; payroll, -0.2%
- 5. San Jose: gig, +37%; payroll, +7%
- 10. San Diego: gig, +23%; payroll, +2%
- 11. Los Angeles: gig, +23%; payroll, +7%
- 12. Sacramento: gig, +22%; payroll, +4%
Source: Metropolitan Policy Program, Brookings Institution