The rise of the gig economy has widespread implications on job opportunities for workers at all stages of their careers. The nature of work is being redefined through new technologies, platforms and demands that have made independent contractors more and more popular. An independent workforce could be the future of work.
The rising gig economy means that increasing numbers of job seekers are choosing flexibility and independence over stability and benefits. Some gig workers are looking for short-term and part-time jobs to supplement their incomes, while others are defining their careers through independent work.
The gig economy encompasses a wide variety of trends related to the changing nature of work in the United States and around the world. But put simply, the definition of the gig economy is a workforce made-up of temporary or project-based positions, freelancing, independent workers and short-term jobs, as opposed to traditional full-time, long-term employment.
The meaning of the gig economy is that permanent work becomes less common in favor of non-permanent jobs with more flexibility but fewer protections under the law.
The word “gig” originated among musicians to refer to booking paid opportunities to perform live. The term has since been adopted to refer more widely to jobs, especially short-term or contract work.
Like the sporadic engagement-based work of musicians, jobs in a “gig economy” are precarious, fully based on demand and lacking in the stability and consistency of full-time work by a single employer.
The term “gig economy” picked up steam during the beginning of the Great Recession in 2009, according to the Financial Times. At the time, unemployment was skyrocketing and the economy was contracting. As a result, fewer full-time positions were available. Cash-strapped people turned to short-term, part-time “gigs” to make ends meet.
With the advent of new apps and platforms that made it easier to connect workers with people who needed in-demand services -- such a ride-hailing and food delivery -- the trend only continued.
TaskRabbit, a service for freelancers willing to perform everyday tasks, started in 2008. Fiverr, an online marketplace where people perform services for as little as $5, launched in 2010. Uber, the ride-hailing service, officially launched in 2011 and is estimated to now have more than 110 million users in more than 60 countries.
According to FitSmallBusiness, the United States workforce has grown 2.6 percent a year, but the freelance workforce has grown by 8.1 percent annually.
The term “gig economy” is believed to have been coined by journalist Tina Brown in 2009, when she was the editor-in-chief of The Daily Beast. While it’s difficult to pinpoint the first-ever use of the phrase, sources such as The Los Angeles Times and CNN have credited Brown with originating the term “gig economy.”
This is what Brown wrote at the time:
“No one I know has a job anymore. They've got Gigs. Gigs: a bunch of free-floating projects, consultancies, and part-time bits and pieces they try and stitch together to make what they refer to wryly as ‘the Nut’—the sum that allows them to hang on to the apartment, the health-care policy, the babysitter, and the school fees.”
She pointed out that the so-called “gig economy” was nothing new for lower-income people. Instead, the shift was how college graduates were increasingly turning to gig work amid less job stability in the Great Recession.
Brown had previously edited magazines such as Vanity Fair and The New Yorker. She has continued to contribute to outlets such as Time and The New York Times.
The expansion of the gig economy through smartphone apps and other services is somewhat uncharted territory. The new ways people are making a living through the gig economy have challenged our preconceptions of the labor market and what it means to work “full-time.” The barriers between gig work and “regular” work are less clear than ever.
The gig economy does not refer to one specific type of workers. In some cases, gig economy services have blurred the lines between traditional employees and independent contractors. However, in common thought, gig workers are usually considered to be self-employed.
In some cases, gig workers have argued that they are essentially employees of the services through which they conduct their work. Legal cases have sought, with varying degrees of success, the protections typically afforded to employees, including:
Services such as Uber, meanwhile, have resisted the regulations and obligations that they would assume if their workers were to be deemed employees. They prefer to think of themselves as referral services, directly linking independent workers to consumers. They argue that their workers are independent because they can:
The view of government agencies about the classification of gig workers largely depends on the administration. The interpretation is up in the air, and will likely become the subject of court cases, legal opinions and policies. Currently, the Bureau of Labor Statistics puts gig workers in the category of “contingent workers.”
Meanwhile, some courts have ruled in favor of considering these workers to be employees in certain circumstances. Bills have been introduced to state legislatures that would expand these protections.
In the years to come, the legal system and workforce will continue to hash out what it means to be a gig worker -- and that could mean new protections, or simply more people finding a way to survive without them.
While the gig economy continues to grow, the number of “gig workers” can be hard to pin down. Part of it depends on how you define them. Most sources say that around 57 million people in the United States work in some form in the gig economy.
However, that number is expansive: It does not only include those relying on gig work as their main source of income. The Harvard Business Review cited a study saying that about 10 percent of United States workers rely on gigs as their full-time jobs.
Meanwhile, only about 1 percent of workers use online services as their jobs. But of those, nearly three quarters rely on that work as their full-time job.
However you define it, it’s clear that the gig economy is growing. But, in the words of Colin Crouch’s 2019 book, “Will the Gig Economy Prevail?” Will independent, contract work become the new normal?
It seems doubtful that the in-demand services performed by gig workers and often facilitated by new technologies will go away. Workers interested in flexible work arrangements and independence will continue to be drawn to these opportunities. What might change, though, is our perception and treatment of what qualifies gig work.
As gig work increasingly becomes full-time work, the expectation of the usual protections of full-time work can only grow. The companies benefitting -- both in financial gain and operational freedom -- from the looser strictures of contract work could be expected to take responsibility for the workforce they’ve established. It will depend on activism and political pressure.
The gig economy isn’t going anywhere. But eventually, in certain ways, it may start to look like the old economy.
Making money in a gig economy comes down to motivation, skill and perseverance. Unlike full-time, permanent work, gig work doesn’t afford you a support system to help you develop professionally and proceed in your career path. Instead, the onus is fully on you to take the necessary steps to improve your earning power. When it comes to the gig economy, you get what you put into it.
How much money you make in the gig economy will also depend on your chosen field. As in the job market as a whole, some types of freelance work are in more demand than others -- and when it comes to certain skills, not everyone can do them well.
You’re most likely to make more money in a gig economy if you have a specialized, highly sought-after skill or ability that is requested by multiple clients. The entrepreneurial resource FitSmallBusiness looked at freelancing rates from top gig economy sites to determine the 10 highest paying gig economy jobs. If you have expertise in these jobs, the gig economy could be a lucrative career path for you.
There are few limits on the type of job you can do through gig economy apps, services and platforms. Gig work has become popular among lower-skill workers, with work like food delivery, dog-walking, and errand-running require few specialized abilities. However, companies in need of highly specialized services from skilled workers will also look to gig economy platforms.
Some of the most popular gig economy jobs include:
The growth of the gig economy has been spurred on by the rise of smartphone applications that made it easier than ever to connect people on-demand. Ride-hailing and food delivery have both been revolutionized by apps like Uber, Lyft, GrubHub, Postmates and more.
These services are far from the only apps getting in on the rising trend of gig work taking over the labor market, though. Take a look at some of the most popular apps and platforms for the gig economy.
As the gig economy has gained prominence over the last decade, a debate has raged over whether it’s a positive trend for the workforce. While millions of people have found new opportunities through freelancing apps and platforms, the gig economy hasn’t been without criticism.
Proponents point to the new forms of worked opened up to jobseekers as evidence of the positive influence of the gig economy. Meanwhile, others have accused gig economy services of exploiting the definition of independent contracting in unprecedented ways that allow them to skirt labor standards. If you’re considering work in the gig economy, it’s important to weigh the pros and cons.
The gig economy wouldn’t have gained so much traction if there weren’t real benefits to the jobs. Gig workers see the following advantages from their situations.
The downsides to the gig economy largely relate to the unstable nature of the gig economy. In some cases, political advocacy is attempting to create new protections for gig workers.
While there are both good and bad sides to the gig economy, it’s important to note that most of these factors have always been a part of independent work. However, the fear among skeptics is that explosion of gig work will normalize unstable situations and deprive regular workers of benefits that have long been considered the standard.
The argument goes that this new breed of gig workers, rather than choosing to freelance out of confidence that it would be preferable to regular full-time work, are resorting to the only opportunities available to them to make a decent living -- and giving up benefits and stability as in the process.
Some experts have said the trend is worrying. Author Paris Marx told Vox.com that the rise in gig work “does not show the growth of a positive new employment sector, but illustrates the growing precarity of the American people:
Former United States Labor Secretary Robert Reich has linked the rise of gig work to American’s decreasing confidence in their future earning prospects. Today, he pointed out in an op-ed, a quarter of Americans worry they won’t be earning enough in the future, as opposed to 15 percent a decade ago. A 2016 study from DeVry University found that the vast majority millennials, often stereotyped as job-hopping gig workers, actually would like a single full-time job.
Others maintain that as long as gig economy services continue to allow the freedoms and flexibility not afforded to full-time workers, they should not be bound by the same rules and expectations.
The most obvious winners in the gig economy are the apps and platforms that connect workers with customers. They are able to generate revenue with low overhead and without paying for labor or benefits. These companies don’t need to invest as much into the hiring process, either. In many cases, the workers are also using their own equipment, sparing the company that cost as well.
Depending on what they’re looking for, individual workers can benefit from the gig economy. If they prioritize flexibility and independence over stability and consistency, they will find value in gig work.
One demographic that could likely benefit from the gig economy is older workers. Senior job seekers often struggle to find new opportunities -- maybe they have trouble adjusting to new ways of business, or they face age discrimination from traditional employers who don’t want to invest money in a worker that might only stay for a few years. Such biases are not a factor in gig work.
However, on a large scale, it’s not yet clear whether the rising gig economy and the associated trends will benefit the workforce generally.
In one sense, those people who are able to land good full-time, permanent jobs might see a tangential benefit from the gig economy. Companies might consider allowing increased degrees of flexibility to avoid losing talent to freer gig work. You might see more firms permitting remote work and flexible scheduling. On the flip side, they might roll back benefits based on evidence that some workers are willing to forego these perks.
The growth of the economy could also benefit from the gig economy, as these new services disrupt old ways of doing business, thereby encouraging innovation and competition. In another sense, though, rise of the gig economy could be a signal that the economy isn’t working so well for everyone -- higher-income people don’t have to deal with the lack of stability, benefits, and protections that those taking gig work face.
Whether the gig economy is work well depends on who you ask.
The rise of gig work is providing new pathways for job seekers, but many are dissatisfied with the sacrifices some have to make when they take that route. According to Forbes, a recent policy workshop in Washington, D.C. feature the following ideas related to gig work:
For now, gig work comes with built-in uncertainties. According to a study from the Freelancers’ Union and Upwork cited by Forbes, 63 percent of gig workers use money from their savings at least once a month.
As new technologies make it easier than ever to work remotely, companies are increasingly questioning the value of office space. Contrary to the common wisdom in some circles, studies have actually shown that remote workers are more productive and engaged than counterparts in the office.
Part of this is a question of mindset: Emphasizing to workers the act of physically being in the office conflates work with attendance. Remote workers are also likely to feel more satisfied with the lack of a long commute, uninspiring ambiance and interpersonal conflicts -- and more satisfaction leads to more motivation.
Still, many value the office because sharing space provides more opportunities for team members to build connections with each other and communicate more easily. For remote workers, it’s important to put systems in place to encourage these developments despite the lack of proximity. From a manager’s point of view, Harvard Business Review points out, office space makes it easy to keep track of their team.
However, proponents of remote work point to the exorbitant costs of office space -- sometimes $12,000 per employee, according to CBRE. They also say that allowing remote work encourages company leaders to evaluate employees on more meaningful standards than simply showing up to the office.
How does this all relate to the gig economy? As gig economy apps and platforms make flexible, remote work and ever-more-popular option for different types of workers, many will come to value and expect that freedom in their jobs. If more traditional workplaces hope to remain competitive and recruit young workers, it’s possible they’ll need to loosen the old structures.
The rise of the gig economy is beneficial to businesses that leverage remote contract labor without sacrificing the quality of their products or services. If your core business can be performed piecemeal by a variety of different workers at erratic times, then making use of gig workers can lower your labor costs.
Meanwhile, if your business requires a high degree of coordination, or demands workers to be in a certain place at certain times, your business is less likely to benefit from the gig economy.
If your business already makes ample use of independent contractors, the new gig economy platforms can widen the talent pool and help you find more affordable options. They make it easier to reach a wider array of workers and connect them with your clients or customers.
The gig economy can also save businesses in the hiring process -- the lower commitment and investment in contract workers mean that vetting requirements are typically lower. It’s not so essential to confirm off the bat that the worker is, say, a good personality fit for your team. You will also save on productivity by not taking up your team’s valuable time to conduct interviews, follow-ups, and reference checks.
The sharing economy is a model where people offer up the use of their goods and services to peers. This process is usually facilitated through some sort of platform where a person’s asset is listed for use at a certain price.
The sharing economy and the gig economy overlap significantly, and sometimes the two terms are used interchangeably. However, many different types of gig work are not part of the sharing economy. The difference between the gig economy and the sharing economy is that the gig economy encompasses all types of freelance work or independent contracting, while the sharing economy requires a person renting the use of another person’s assets.
Services such as Uber and Airbnb can be considered parts of the sharing economy because they involve individuals offering the use of their own assets for use. They are also part of the gig economy because they involve providing goods or services outside of the context of a traditional, full-time job or business ownership.