Popular gig work platforms such as Uber have rapidly reshaped labour markets. They expand options for workers, offering on-demand opportunities that bypass many employment conventions. But they also put pressure on traditional employers, especially small businesses. To explore this issue, Professor Ali Akyol has received an Insight Grant from the Social Sciences and Humanities Research Council.
In the United States, small businesses employ nearly half of all private-sector workers. However, they face rising
challenges as millions of workers shift towards app-based, flexible gig jobs. Estimates from Deloitte on the gig economy highlight that 36% of the U.S. workforce now do gig work. And in Canada, surveys from the Bank of Canada and Angus Reid estimate that one-third of adults engaged in gig work in 2018. Uber reported contributing $8.8 billion to the Canadian economy in 2022.
This change hits small businesses in low-wage, low-skill service sectors particularly hard. And they’re already facing labour shortages, higher operating costs and overall uncertainty. These firms are the focus of Akyol’s project, When Uber Comes to Town: Firm Size and the Labour Market Stock.
Filling the research gap
Despite the growing research on gig workers, little is known about how gig platforms affect firms that compete with them for labour. In particular, it’s unclear how small firms, who often have limited resources and flexibility, adjust their pay, staffing and long-term performance when facing these labour shocks.
Akyol’s research will help fill that gap by studying how Uber’s staggered entry into U.S. cities has shaped firms’ actions. It will focus on differences by size, financial flexibility and organizational structure. The study is centred on Uber, whose scale and leading role make it the best platform to show wider effects of the gig economy.
Akyol’s goal is to learn how firms of different sizes adapt, or fail to adapt, to platform-driven labour shocks. His team will estimate Uber’s impact on employee turnover, vacancies, pay and firm performance, paying close attention to differences between small and large firms. They’ll also examine whether some firms benefit by teaming up with gig platforms, such as when restaurants use Uber Eats for deliveries. Finally, they’ll track factors shaping firms’ resilience, like financial flexibility and organizational structure.
Expected research outcomes
Ultimately, Akyol’s project will deepen our understanding of how technological innovation reshapes labour markets for both gig work and traditional employment. Although the analysis uses U.S. data, the insights extend to Canada since gig work is widespread. By showing how platforms reshape labour competition and firm resilience in the U.S., the project will provide relevant findings for Canadian labour markets, small business policy and platform regulation.
The team will also make their data on Uber’s market entry and job postings publicly available. This will support further interdisciplinary work on labour competition, platform economics and firms’ strategies.
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