Every day a record 145 million Americans report to a full-time job and many economists now believe that we are rapidly approaching full employment.

Given this macroeconomic climate, one might expect to see a decline in self-employment and the number of people eager to engage in the new “on-demand” work that has been enabled by online platforms. But that is not what is happening. In fact, the flexibility of schedule, ease to connect to customers and ability to utilize technology on mobile devices to manage their time and business has only increased the number of self-employed.

According to a new report released by Intuit, “Dispatches from the New Economy,” the number of people working in on-demand jobs grew from 3.2 million in 2015 to 3.7 million in 2016.  And, based on current workforce participation, we forecast that these numbers will more than double by 2020, to 7.7 million, and continue surging to 9.2 million in 2021.

For the last two years, Intuit, in partnership with Emergent Research and twelve on-demand economy and online talent marketplaces, has been measuring the behavior, motivations and aspirations of the millions of self-employed who choose this work.

To understand why people find on-demand platforms appealing, it helps to understand the underlying dynamics affecting the mood of workers, and the reasons people say why they engage in on-demand work – and it’s not what you think. In fact, our research findings counter the notion that most on-demand workers choose this line of work because they cannot find traditional employment opportunities.

For instance, only 11 percent of the respondents in our survey said an inability to find employment was a trigger for seeking on-demand work. In contrast, most of the on-demand workers we surveyed said they signed up with on-demand platforms as a proactive move aimed at gaining greater financial security and greater control in their professional lives.

The majority of people working on-demand jobs do so part-time. The average person working an on-demand job spends 11 hours per week and earns 24 percent of their household income via on-demand work. Forty-one percent also have a traditional full-or part-time job.

Taking control of their professional lives –  and integrating their work into their existing lifestyles – is a key catalyst for choosing on-demand work. This shows up in two major categories of people working on-demand jobs: 1. People who are looking for a convenient way to earn supplemental income that provides protection from financial volatility; 2. People who want to augment their income as they work to build a business of their own – 37 percent already own a business, and 21 percent want to build a business.

As with any mode of work, there are also challenges that have arisen in the on-demand workplace, including unpredictable income, tax and regulatory compliance issues and finding appropriate health insurance and other traditional employment benefits.

As Congress tackles the top issues such as health coverage, tax reform and regulatory reform, we urge policymakers to keep in mind this new and growing segment of our economy.

  • Many in this segment may not realize programs available to them as micro-businesses or self-employed. Enabling on-demand platforms to provide helpful guidance to entrepreneurs without triggering worker classification issues will help educate on tax obligations and basic financial planning. This will ultimately ensure this segment’s success.
  • “On-demand” businesses often intermix business and personal expenses into one bank account, making understanding their tax obligations confusing. Technology tools to help the self-employed recognize their tax obligations and take control of their personal and business finances are important for success.
  • Technology makes paper records nearly obsolete in this segment, yet the Internal Revenue Service and government agencies still lean towards paper receipts and documentation. As Congress looks towards tax reform, we encourage policymakers to evaluate the requirements for Schedule C, given this internet-based on-demand economy.

In sum, the portrait that emerges from our report is a complex, multi-faceted workforce that is not simply a function of economic cycles, or the short-term dynamics in supply and demand for full-time jobs.  Millions of people are embracing on-demand work as a way to improve their financial security and stability and as a way to build business — even at a time when traditional jobs are plentiful. Government programs, regulations and the tax code should be modernized to reflect the modern working environment.

To download a full copy of the Intuit report “Dispatches from the New Economy,” click here.