ABS data reveals sole traders on the rise: are gig economy workers the new small business owners?

The number of “non-employing” businesses in Australia continues to grow, with recent data suggesting the number individuals starting businesses in gig economy-focused areas like transport has increased over the past year.

New data from the Australian Bureau of Statistics (ABS) has revealed taxi and transport businesses have grown significantly over the 12 months. The ABS reports a 3.1% increase in actively trading businesses between June 2016 and June 2017. Within the increase, “non-employing businesses” were driving the growth, with sole proprietors showing a 4.5% increase between 2015-16 and 2016-17.

The ABS reports the transport, postal and warehousing industry was the highest growing industry in 2016-2017, with 26.8% of all business entries classified as belonging to this group. This is a 12.1% increase from the 2015-16 period.

The sub-categories of ‘other transport support services’, which increased by 26.0% or 8,186 units, and ‘taxi and other road transport’, which increased 32.3% or 6,150 units, were the primary force behind the growth in the transport, postal and warehousing industry.

The figures speak to a possible growth in the number of individuals have registered as sole traders in order to work as gig economy workers, such as Uber or Deliveroo couriers.

Gig economy workers could shake up the SME space

Managing director of Market Economics, Stephen Koukoulas, says the conditions this new breed of sole trader are entitled to will vary from those in traditional small businesses.

“By definition [gig economy] roles don’t have leave, holiday pay or superannuation which is fine, but given they tend to be relatively low-paying jobs the ability to put away money if their sick is something that’s really important,” he tells SmartCompany.

However, Koukoulas says as the gig economy grows in Australia, the current risks of working for Uber or another gig economy company still continues. Despite non-employing businesses appearing to be on the rise, the ABS stats show they also had the highest exits rates in 2016-17 with 16.1%.

“There is clearly an issue that’s unfolded as the gig economy has evolved and casusalisation continues. We need to make sure the risks to the individuals from doesn’t become entrenched,” Koukoulas says.

He says there is certainly an opportunity for policymakers to regulate the gig economy to ensure workers aren’t dealing with increasingly declining wages in the face of larger competition.

“There’s a role for regulation and how the gig economy is regulated to make sure people aren’t being ripped off.”

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