Broadband ROI in the Dollar-Earning Digital Economy

Uber launched in 2010, with no precedent for personal apps that ordered gig-economy drivers, where you wanted, when you wanted, and with ratings you could know before getting into their cars. Today, it leads a nearly $12 billion-dollar industry (much larger globally), according to Statista.

Ride-hailing is just the tip of the broadband-enabled iceberg. People are leveraging broadband-enabled apps to generate income by hawking products (e.g., eBay, Etsy, Poshmark), selling services (e.g., TaskRabbit, Fiverr, InSight Telepsychiatry), and sharing content (e.g., YouTube, Twitch, TWiT), in addition to monetizing assets such as vehicles, housing and office space (e.g., Lyft, Airbnb, WeWork). Earlier this year, Intuit CEO Brad Smith revealed that the “gig economy…is now estimated to [include] about 34% of the workforce and expected to be 43% by the year 2020.”

A wide variety of sources draw upon anecdotal evidence to estimate how much money people are making using internet-enabled platforms. YouTuber Matt Tran of the channel Engineered Truth shared that he has 240,000 subscribers and generates $3,000 per month from ad revenue. Tamebay estimates that third-party Amazon sellers pull in around $115,000 annually, on average. SimplyHired reports that “the average salary for psychiatric telemedicine jobs is $63,230.” In June, even reported the average monthly sharing economy income per worker for Airbnb, TaskRabbit, Lyft, Uber, Doordash, Postmates, Etsy, Fiverr, and Getaround. In a recent whitepaper, the Internet Innovation Alliance takes it a step further and sheds light on the return on investment gig economy workers are seeing from subscribing to broadband.

Earnest’s analysis looked at anonymized data from tens of thousands of loan applicants for a span of just over two years, and examined pay periods between one and 27 months for each worker. According to their findings, the average monthly income from gigs in the sharing economy is $299, which means workers typically pull in about $3,588 per year ($299 x 12 months = $3,588/yr). Per IIA’s research for its yearly Cost Campaign, the average annual cost of a mobile data plan and home broadband connection is now $1,200. That means the average gig economy worker sees a 299-percent return on their investment in broadband connectivity.

While the majority of gig economy workers are not utilizing digital platforms to make a full-time living, the extra cash they are netting is making a major impact on their household budgets. According to the U.S. Department of Labor, average expenditures per “consumer unit” for 2016 were $57,311. Therefore, before taxes, the typical gig economy worker can cover more than six percent of household spending with the earnings from their broadband-enabled side-job – ($3,588 ÷ $57,311) x 100 = 6.26 percent.

In an economy where competition is rising and entrepreneurship is increasingly essential, high-speed internet is a critical tool that will help people supplement their income and improve their quality of life. Lawmakers and regulators should support policies that promote the expansion and availability of high-speed broadband internet to help close the digital and economic divide.

Bruce Mehlman is a founding co-chairman of the D.C.-based Internet Innovation Alliance.

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