Independent work: choice, necessity, and the gig economy


On-demand services are creating consumer surplus



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On-demand services are creating consumer surplus 
Consumers have been the big winners in the expansion of digital on-demand platforms. 
Individual buyers have more choices, including services that were not previously available 
to them through traditional means. They can hire someone to perform tasks at lower prices 
than before and generally with a great deal more ease and transparency. At the touch 
of a button, digital apps allow buyers to summon a ride, place a detailed order for the 
week’s groceries, or send out for food from restaurants that do not deliver. Someone can 
appear at their door to do their laundry, organize their closets, walk their dog, or assemble 
their furniture. The early adopters have quickly grown accustomed to convenience and 
immediacy for all manner of services. So far the proliferation of these services has been 
88
 
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January 2016.
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  Andrew Burke, “The entrepreneurship enabling role of freelancers: Theory with evidence from the construction 
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  Kevin Yili Hong and Paul A. Pavlou, “Online labor markets: An informal ‘freelancer economy,’” 
The IBIT Report

Fox School of Business Temple University, February 2013. 


89
McKinsey Global Institute
Independent work: Choice, necessity, and the gig economy
a plus for consumers but disruptive for established incumbents—and it is important 
to note that regulation can shape the evolution of these platforms and their ability to 
penetrate markets. 

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