Experience

'High school kid' studying freelancers

Jan Garrison
 

Cheng tracking online work

 

November 4, 2020

For a small business owner, your best employees may be the people you never meet.

That is the reality of today’s freelance economy. From small and medium-sized businesses collaborating with freelancers for a variety of accounting, legal, engineering or design services to college students hiring professional copy editors to proofread their important papers, an estimated $15 to $25 billion exchanges hands annually via online platforms like Upwork and Freelancer.

Yangfu (Modeo) Cheng ’21 (Shenzhen, China) has been following this trend and he believes the COVID-19 pandemic has accelerated the pace of change as more businesses and people have gotten a taste of using these online platforms.

Small and medium-sized businesses (SMEs) have long been the purchasers of freelance services. They have realized the savings in hiring specialists only when they need them. As more specialists were laid off or furloughed due to the pandemic, more people have entered the marketplace and more businesses are using them.

 

Modeo Cheng '21

 

Cheng has been researching this trend, starting after he returned home from Culver Academies in March. He said this fast-developing change is happening around the world. Anywhere there is a reliable internet or wireless connection on the map, you will find freelancers and gig workers. According to a 2015 World Bank report, approximately 48 million people have registered on online labor platforms with 4.8 million actively seeking work at any one time.

There are three types of freelancers or gig workers, Cheng explained. There are location-based workers like Uber and Lyft drivers, delivery people, and personal shoppers. Their work is limited to specific geographic locations. There are the micro workers who do piecemeal work, such as filling out online surveys. They are paid a small, fixed amount for each survey or task they complete.  

Cheng's focus has been on the macro workers, who generally are referred to as freelancers. They cover a wide range of occupations, he said, including designing, writing, editing, coding, building websites, engineering, accounting, and legal work. Their projects are more complex, take more time, and the pay scale fluctuates according to project.

A 2018 report by the Oxford iLabour team, which Cheng eventually hopes to connect with, said this online labor force is growing by 25 percent per year – and those are pre-pandemic estimates. The question Cheng was interested in was whether the supply of online freelancers is surpassing the demand for services by businesses.

While Upwork, which is the largest freelancer platform, issued a report in 2018 that said more than half of the small businesses worldwide were using flexible and/or online workers, Cheng said the flow of work online has not really been studied. Knowing how many workers are using online platforms to find jobs is easy, but actually tracking the businesses is more difficult for a variety of reasons.

To look further into this exchange of services, Cheng taught himself Python and began “scraping data’ from online platforms to see what kind of work was begin requested and who ended up with the job. A client based in Montreal, Canada, chose someone in the Philippines to complete one job and someone in San Diego to complete another. The bids for that work were that far-ranging.

And the complexity of the work can be from a few hours to several months. Proofreading an academic paper can be done in someone’s spare time while engineering work will become an ongoing relationship. The money also fits the time schedule. Cheng said his data showed the largest amount paid on an individual contract was $32,350.

Cheng did a brief demonstration how bidding on projects can be highly competitive. Using a freelance platform based in Australia, he requested bids on proofreading and editing a 50-page technical paper. Within 15 seconds, he had his first response.

“That person is sitting at his computer with this program open,” he said. Within a minute, he had four more bids. Within 20 minutes, there were approximately 250 bids, ranging from England, Australia, Pakistan and other countries. That is how competitive the market can be, Cheng said.

To protect the clients, there is a rating system for each individual worker. That, too, can be very competitive. With so many freelancers to choose from, it is difficult for workers to establish themselves. Cheng said for his proofreading job, he would look for someone who has a perfect 5-star rating with more than 20 reviewers offering their opinions. One person, who had a 4.6 rating and 11 reviews, probably would not get the job. “I wouldn’t hire him,” he said.

While most of the bidding process is done individual-to-individual or business-to-individual, Cheng said there are a few agencies that will bid on projects and then assign it to one of their contracted workers. In those instances, you pay the agency price but you don’t know how much is actually being paid to worker.

Which is part of the problem with freelance worker platforms. Cheng said his research indicates there are very few – if any – regulations governing the work. In countries where freelancing is a major source of income, like Nigeria and Malaysia, there is now some discussion about establishing some base guidelines to make sure the workers are protected.

A 2016 report Cheng cities shows there is an overabundance of online workers in both countries. In Nigeria, there are 7000 registered freelancers, but only 200 are considered successful. Malaysia shows 11,900 registered workers but only 500 are considered successful. Those numbers are reflected globally, with 1,775.500 workers being registered on one online platform but only 198,900 being considered successful.

Cheng said his eventual goal is to have his research reviewed by others. He hopes that someday, it could be polished enough to be published. He has two papers completed and a third nearly finished. With so much changing due to the pandemic and ongoing expansion of internet and wireless access, Cheng believes the freelance economy is going grow exponentially. But he needs to know if his data is solid and his concepts are on target.

“I mean I’m just a high school kid,” he said.

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