The sharing economy promises the freedom to earn extra money on your own time and terms. Just how much money varies, but one platform makes its users far more cash than any other.
San Francisco-based loan provider Earnest analyzed income on tens of thousands of loan applications to measure the impact of sharing economy work. They found that the average Uber driver makes $364 a month, while the average Lyft driver pulls in $377. Running errands for Postmates netted its workers $174 a month on average.
But the average Airbnb host makes more than all three of those combined: $920 a month.
No other platform comes close. TaskRabbit is the second-most lucrative, with its average user earning $380 a month and its top 5% hauling in more than $2,000 monthly. DoorDash deliveries pay $229 on average, while most Fiverr users work for pocket money: A full 70% of them make less than $100 a month.
These are, of course, averages — some users just dabble in the gig economy, while others work full-time or use multiple platforms at once.
But one clear takeaway is that most participants in the sharing economy — now one in four Americans, according to Pew Research — aren’t making a whole lot of money from their side hustles, with one big exception. Earnest found that 85% of gig economy workers earned less than $500 a month — but roughly half of Airbnb hosts made more than that.
This is at least partly because Airbnb rates are more or less pegged to area hotel prices, not hourly wages — and hotel rates are outright bananas in many cities.
For example, if you have a nice two-bedroom apartment in a desirable location like San Diego or Boston, and you’re able to make yourself scarce two weekends a month while you rent it out on Airbnb, you can reasonably expect to pocket up to $1,000 in just four nights. It’ll demand a few hours of house cleaning, laundry, and communication with guests, but the fact is you’re mostly just charging for the use of your asset, not your time or hard work. It’s relatively easy money — once you have the apartment.
That’s awesome if you’re able to do it. But the alarming thing is that this difference appears to reflect or even magnify our already-topsy history of wealth inequality in America.
Pew Research actually divides gig economy services into two classes: With labor platforms such as Lyft or TaskRabbit, workers are paid for their time and effort. Capital platforms, on the other hand, such as Airbnb and Etsy, allow users to make money in exchange for their goods or possessions — more like business owners than employees.
Pew found that Black, Latino, and low-income workers were more likely to make use of labor platforms, while white and wealthier users were more inclined to sell things online or rent out rooms on Airbnb.
It’s one more instance where it takes money to make money.
Now we know that Airbnb is where the big money is at — but that opportunity is more available to the wealthy. Renting out your apartment isn’t as ready an option if you can only afford to live in a part of town that is less tourist friendly or with several roommates who may not share your entrepreneurial ambitions. In many cases, the advantage also favors homeowners over renters, since tenants who sublet through Airbnb risk eviction if their lease forbids it.
Basically, it’s one more instance where it takes money to make money. And you could argue it’s yet another way the wealth and racial inequality gap in America continues to grow.
“The history of racial injustice in the United States is in large part a history of the systematic dispossession of people of color from the land,” writes Matthew Desmond, associate professor of social sciences at Harvard, in a 2017 report for the Stanford Center on Poverty and Inequality. From slavery and sharecropping, to the forced resettlement of Native Americans, to redlining — when official FHA policy literally drew a red line around minority neighborhoods and refused to issue mortgages on those houses — people of color have been unfairly boxed out of the housing market throughout American history.
And that legacy of denied opportunity continues to exacerbate wealth inequality. “Nearly a third of the racial wealth gap is explained by differences in homeownership rates,” writes Desmond. The median homeowner’s net worth was $199,557 in December 2013, according to a Census study — that’s 90 times greater than the median renter’s net worth of $2,208. (And home values have only gone up since then, so that gap is likely even wider today.)
When a capital platform like Airbnb earns hosts nearly three times as much as the top labor platforms, higher income homeowners still hold an advantage. Even when it comes to dabbling in the gig economy, real estate is where the big money is made, and fortune favors the fortunate.