Brookings study shows increase in Las Vegas “gig” employment

By Daniel Rothberg

Thursday, Oct. 27, 2016 | 2 a.m.

Across the nation, the number of workers classified as independent contractors or freelancers has been increasing since the 1990s, according to analysis from the Brookings Institution. In areas like transportation and hotels, that growth has been recently intensified by “gig economy” companies such as Uber, Lyft and Airbnb.

And Las Vegas is starting to see a similar trend.

In a Brookings report released earlier this month, researchers did a city-by-city analysis of the growth of nonemployer, or gig, employment and the growth of payroll employment. The goal was to see whether gig employment was displacing payroll employment in transportation and travel accommodations. For instance, are Uber and Lyft drivers replacing taxicab drivers?

The researchers found that in Las Vegas, both payroll and gig employment in transportation and hotels increased, according to Census Bureau data collected from 2012-2014.

“The first thing to say is that Las Vegas is looking like and behaving very much like an early adopter,” said Mark Muro, a Brookings fellow and director of its Metropolitan Policy Program.

One interesting takeaway from the research has nothing to do with Uber and Lyft. Muro’s data show that in the transportation sector, gig employment was rising even before the ride-hailing outfits began operating here last year. Since taxi companies are barred from using contractors, Muro said gig employment growth could reflect the presence of other driving-related platforms.

“The online platforms really multiply the activity,” Muro said.

From 2012-'14, gig employment grew by about 105 percent — about 880 Nevadans — while payroll employment in the transportation sector grew by 4.4 percent, or roughly 500 employees.

And Las Vegas can expect a greater increase in contracted transportation drivers. Already, Uber and Lyft have added thousands of contractors to the market. Taxi regulators also are in the process of allowing licensed taxi companies to hire independent contractors, a move that could be finalized this year. Those two factors could tip the balance toward more gig employment.

“The competition of the platforms and the incumbents is a really interesting example of how economies work,” Muro said. "Unresponsive cab companies have already been losing payroll employment. … In other (markets), it seems incumbent companies are more responsive.”

Las Vegas has seen a similar trend in the hotel sector. Over the same two-year span, payroll employment in travel accommodations increased by 3.5 percent while gig employment rose by 17.7 percent.

It’s too early to tell what impact these shifts will have on payroll employment in Las Vegas.

Despite the rise of Airbnb and the use of independent contractors in transportation, the Brookings report found that payroll employment continued to increase in each sector. That means taxi and hotel companies continued to add employees. But in some markets, including Silicon Valley and Salt Lake City, payroll employment decreased with a sharp rise in gig employment.

And while on-demand companies from Uber to Postmates thrive on an independent-contractor model, not everyone is delighted about the potential shift. Some aren’t sure if its use in the transportation sector is legal. Both Lyft and Uber have faced several lawsuits over allegations that they misclassify drivers as contractors.

“It’s been a growing trend over the past few decades, but whether or not it’s legal is not clear,” said Ruben Garcia, a labor law professor at UNLV. “The law hasn’t changed at all in decades.”

How independent contractors are treated, Muro said, deserves more discussion. “It raises very serious questions about how we support workers (and) what benefits we provide,” he said.