Transportation Apps Emerging As Tool for Families to Smooth Income After Job Loss
31 Ottobre 2019 - 11:00AM
Business Wire
Participation on transportation apps increases
72 percent around arrival of unemployment benefits
Men are more likely than women to use
transportation apps to earn income in wake of job loss
Today, the JPMorgan Chase Institute produced new research
exploring the relationship between participation on the platform
economy and involuntary job loss, as indicated by the arrival of
unemployment benefits. While fewer than one percent of Americans
experiencing job loss participate in the Online Platform Economy,
the data show participation on transportation apps increases 72
percent around the receipt of unemployment benefits. Participation
in selling platforms similarly increases 27 percent following
involuntary job loss.
“Understanding how families use the Online Platform Economy to
smooth their income in the face of major cash flow events is
critical to understanding the role of these platforms in our
economy,” said Diana Farrell, President and CEO of the JPMorgan
Chase Institute. “The $150-$250 that these families earn on
platforms following job loss is being used as a crucial shock
absorber for financial volatility.”
The report builds on previous research from the JPMorgan Chase
Institute on the Online Platform Economy, exploring where Americans
are earning income and how earnings from platforms figure into
family income. The new report, “Bridging the Gap: How Families Use
the Online Platform Economy to Manage their Cash Flow” finds
that:
- Families turn to the Online Platform Economy when they lose
a job and turn away from it when they gain a full-time job,
particularly turning to transportation or selling platforms to
supplement income.
- Transportation platform participation rates increase from 0.43
percent to 0.74 percent around the receipt of unemployment
insurance benefits—an increase of 72 percent. Participation rates
on selling platforms increase from 0.22 percent to 0.28 percent—an
increase of 27 percent.
- Participation on transportation platforms declines sharply in
the weeks leading up to a family receiving a first direct payroll
deposit from a new employer from a peak of 1.1 percent seven weeks
before the first direct deposit to 0.69 after the first direct
deposit.
- The Online Platform Economy is a more potent
income-smoothing tool for men than women.
- When a family begins collecting unemployment insurance,
platform participation increases from 0.7 percent ten weeks prior
to 1 percent if the primary account holder is a woman, and to 1.2
percent if a man. These translate to proportional increases of 43
percent and 60 percent, respectively.
- There is no apparent evidence of men turning to one sector and
women turning to another, with both men and women turning primarily
to the transportation sector.
- Average revenues per driver, and the gender gap in those
averages of around $30, remain stable in the weeks leading up to a
first unemployment insurance payment. Notably, the gap increases to
about $50 in the weeks after.
- Unlike changes in job status, tax-related cash flows have no
effect on participation in the Online Platform Economy.
- Tax refunds and tax payments do not catalyze changes in
participation in the Online Platform Economy, other than a dip in
driver participation in the week when a tax refund is
received.
The research leverages the JPMorgan Chase Institute Online
Platform Economy Dataset, based on 38 million payments directed
through 128 different online platforms to 2.3 million distinct
account holders, out of a sample of 39 million, between October
2012 and March 2018. The new report tracks how Online Platform
Economy participation rates and average weekly platform revenues
evolve cash flow events. In total the report tracks five specific
events in 2016 and 2017: a family receiving its first direct
deposit from a platform company indicating entry into the Online
Platform Economy, job loss, job gain, receipt of a tax refund, and
tax payment.
To identify trends and differentiate the types of work taking
place in the platform economy, the JPMorgan Chase Institute has
identified four different platform sectors:
1. The transportation sector, in which drivers
transport people or goods;
2. The non-transport work sector, in which workers
offer a growing variety of services including dog walking, home
repair, telemedicine, and many others;
3. The selling sector, in which independent
sellers of goods find buyers through online marketplaces;
and
4. The leasing sector, in which lessors find
lessees to rent homes, parking spaces, and many other types of
assets.
About The JPMorgan Chase Institute
The JPMorgan Chase Institute is a think tank dedicated to
delivering data-rich analyses and expert insights for the public
good. Its aim is to help decision makers–policymakers, businesses,
and nonprofit leaders–appreciate the scale, granularity, diversity,
and interconnectedness of the global economic system and use timely
data and thoughtful analysis to make more informed decisions that
advance prosperity for all. Drawing on JPMorgan Chase & Co.’s
unique proprietary data, expertise, and market access, the
Institute develops analyses and insights on the inner workings of
the global economy, frames critical problems, and convenes
stakeholders and leading thinkers. For more information visit:
JPMorganChaseInstitute.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20191031005073/en/
Media: Parita Shah, parita.shah@jpmorgan.com
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