Over 60 million people work in the US gig economy

The gig economy refers to short term contract or freelance work. Uber, Lyft, Doordash, Upwork and Fiverr are examples of platforms where people can find work in the gig economy. 

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Kaitlyn Mora
November 30, 2020 6:05 pm

When I hear about the gig economy growing, I often think about the impact this is having on certain professions now that platforms like Upwork, Freelancer and Fiverr are around. The marketing campaigns of these platforms often highlight the ability to get work done at cheap cost. As an example, let’s look at logo design.

A logo designer often has a background in graphic design, perhaps a bachelor degree. Not only do they need to be competent with design software, but they’re expected to take time to understand the client’s business goals, brand identity and what message the company wants to convey.

But sites like Fiverr promote its platform as a place where you can get a professional logo for as little as $5. Lots of people flock to Fiverr to get their logos designed because it’s so cheap. But think about this for a moment. If you’re a logo designer on Fiverr, why would you put in extra effort if you’re only going to earn $5? You could just use an online logo design app, of which there are plenty, and just generate a logo. You could then submit this to the client, and job done! I’m willing to bet that freelancers are doing this.

So professionals who actually have a background in graphic design are getting priced out, and clients end up getting low quality work. There’s little incentive to provide high quality logo design if you’re only going to earn $5. In a way, it’s similar in the taxi market. I probably can’t make the same argument about quality since the passenger just wants to get from point A to point B in one piece. But before apps like Uber, Lyft and Bolt came along, taxi drivers had to memorize routes. They wouldn’t rely on sat nav or Google Maps, and would know the best short cuts to get you to your destination.

A long term impact of this is that more work may eventually find its way to professionals with appropriate training and educational background. People soon learn that there’s a big difference between a $5 job and work done by someone who’s more experienced ๐Ÿ™‚

fiverr ad.jpg
December 1, 2020 11:26 pm

The transformative effects of the gig economy aren’t of course limited to the US. For the past 2 years I’ve travelled to Southeast Asia, and the impact of the gig economy is there for all to see. Jakarta, the capital of Indonesia, is a bustling city and a noticeable feature of its roads are the vast number of moped riders wearing Grab or GoJek jackets. These are the Southeast Asian equivalents of Uber and Lyft. I have to say it was a pleasant experience being handed a helmet and then having my Grab rider weave through the traffic and congestion of Jakarta ๐Ÿ™‚

While the concept of ride-hailing apps provides exciting opportunities for some, it’s a source of concern for others. I visited Belitung, an island off the east coast of Sumatra, and spoke to someone who runs a local taxi business there. He mentioned that it was only a matter of time before his business would have to close as Grab became more established on the island. A similar struggle has been taking place with local taxi drivers and ride-hailing drivers in Langkawi, an island on the west coast of Malaysia. Local taxi drivers complained that their customers were being ‘stolen’ because ride-hailing apps offered lower prices. The Prime Minister of Malaysia even visited the Taxi Drivers Association in Langkawi to hear their concerns. It didn’t turn out too well with the Prime Minister offering to resign and several taxi drivers hurling insults at him after he said he couldn’t terminate Grab’s service.

Ride-hailing has been disrupting the way the taxi industry has been run for decades, and there’ll naturally be some ripple effects. In Bangkok, Uber was banned from Suvarnabhumi Airport a few years ago. Following Grab’s acquisition of Uber Southeast Asia, it seems you can get a GrabCar from the airport now. However there have been rumours of a dispute between Grab drivers and traditional taxi drivers, who aren’t too happy with Grab drivers encroaching on their territory.

Another effect of the gig economy is that when something has such a dramatic impact, there’ll be a desire among many to join in the momentum. Some people actively look forward to being a ride-hailing driver on New Year’s Eve because the pay rate is higher.

Just like in the US, the numbers of people joining the gig economy in Southeast Asia is projected to rise. This is in part due to flexibility offered, but also due to the opportunities to participate. When I used Grab and Gojek in Indonesia last year, both apps were attempting to be ‘super apps’, offering on-demand services such as massages, cleaning and ticket bookings. The pandemic has forced both companies to slow down on their ‘non-core businesses’, but they are likely to re-establish these once things get back to normal.

Ernest Vicente
November 29, 2020 11:12 pm

It’s estimated that half of the workforce in the US is soon to be employed in the gig economy, and I can see why. I’ve heard so many complaints from people over the years about how they’re dissatisfied in their workplaces. The horrible commute, working from 8am – 7pm, having to answer emails on the weekend, and so on. Work-related problems have affected everyone at some point. So it’s to be expected that so many people are choosing the gig economy route. More flexibility; you choose when you want to work and in many cases, you can be your own boss.

As rosy as it sounds, there are pros and cons to working in the gig economy. I’ll share my experience of freelancing as a proofreader on Upwork, a freelancing platform where you bid for project work.

One main difference I’ve noticed between the gig economy and working a traditional job is that there is a much greater expectation to squeeze every bit of productivity out of you in the gig economy. In a regular company, people can spend their working hours at the coffee machine, chatting away for 10 minutes. I remember when I first joined a large company when I first started out in my career. Someone came by a colleague and started a conversation. They spoke for at least 20 minutes, none of it work related. I remember thinking to myself, “How can they get away with this? There’s no accountability.” I was very green back then and understand now how much lost productivity there is in big companies ๐Ÿ˜‚๐Ÿ˜‚ But the point was that they were getting paid to just talk to each other. Just like people are getting paid to go to the department coffee machine and talk about their weekend plans. I’ve found that you don’t have this freedom when you’re a gig worker. You get paid only for the work you produce.

Another main difference is reputation and earning potential. When you join a new company, you get paid to have various inductions with staff members and to learn the ropes. In the gig economy, however, the burden is on you. For example, when I first joined Upwork, it was hard for me to get a proofreading gig because I had no feedback from clients. I had to reduce my cost significantly just to get a look up. Eventually I secured a job for $5 to review someone’s essay. It took me at least 3 hours to correct. And once I’d submitted my work to the client, he then got in touch with me with follow-up questions to understand why I’d made certain corrections. So I pretty much earned $5 for 4 hours’ work. But in the gig economy, I feel this is necessary. You need to take the hit so you can build up positive feedback and then ultimately charge higher prices as you become more in demand.

So as I said, there are pros and cons to working in the gig economy. Some people do it on the side and others do it full time. If you’re lucky, you can build strong client-customer relationships, which allow for repeat work opportunities. So each to their own. I feel that the increasing number of people joining the gig economy isn’t because of a massive desire to join, but because of current employment conditions elsewhere. Competition for jobs is intense whereas the barriers to entry to join the gig economy are low.

Travis Banks
December 2, 2020 8:07 pm

The number of people joining the gig economy is reflective of what people want their working life to be like. More people want the opportunities the gig economy offers, and so naturally more people will sign up to it. Of course no job is perfect, but flexibility is a big issue for workers these days. In 2016, the Pew Research Centre published research that said 68% of US adults felt gig work was great for people who wanted flexible work schedules. 26% were unsure and only 6% disagreed.

Another major goal that people have when searching for work is to do something they enjoy. Not exactly a mind-blowing insight, I know… But interestingly, when asked why gig workers signed up to online platforms, over 40% said it was for fun or to do something with their spare time (Source: Pew Research Centre). I can see where this statistic is coming from. Let’s say you wanted to try out a different job. It’s not like you can go for an interview for a role totally different to what you’re currently doing and then ask to work for 1 day. On platforms like Taskrabbit or Thumbtack, you can literally try out a different job every day of the week.

The gig economy also lets you monetize your existing success, which many people exploit to earn extra income. Let’s say you have a large following on TikTok or Instagram that you’ve built just by using these platforms for fun. You now have an avenue to earn money on Fiverr. Just search for “shout out”, and you’ll see numerous people offering to make a shout out on their accounts. You’ll also see that there is demand for these shout outs. Also do you live somewhere exotic? Lucky you. Not only do you live somewhere unique and interesting, but you’re able to monetize this as well. There are people on gig economy platforms with job descriptions such as “I’ll give you any information you need about location X” or “I’ll make a weekend itinerary for your stay at location Y”. Simply by virtue of living somewhere, the gig economy had made this into an income earning opportunity ๐Ÿ™‚

shout out.png
Art Charrel
December 1, 2020 7:15 pm

Anything that involves such a large number of people will have positive and negative effects. The main news story about the gig economy in the US that’s got a lot of attention is California’s Proposition 22, which exempts platforms such as Uber and Lyft from classifying its drivers as employees. People voted for this proposition to pass, meaning Uber, Lyft, Doordash drivers are independent contractors. This takes away their rights to a minimum wage and the training and protection they would get if they were ’employees’.

A similar discussion is happening in Australia, where unfortunately several riders have died in recent weeks. One case was a Doordash rider who got hit by a stolen car in Melbourne. The laws state that these riders are independent contractors but there are growing voices calling for them to be classed as employees. Many are immigrants working part time and sending money to families back home who are living in poorer conditions. They’ve also been on the frontline of the coronavirus pandemic, delivering food and helping businesses that would otherwise have shut down.

But this is a sign of the times, and shows the power that gig economy platforms weild. It’s estimated that these platforms spent millions in Facebook advertising in California and Uber even promoted the benefits of Proposition 22 within its own app. I do feel, however, that while the big platforms will be celebrating this win, it’s only a matter of time before riders get better rights. Stories are surfacing of riders being threatened to be fired if they’re a few minutes late to the customer. They’re taking risks to ensure they get to the customer on time and so they can keep earning money. The problem is that it’s causing loss of life, and there’s a limit to how long this will be tolerated.

Anna Alonso
March 23, 2021 11:28 pm

Making the transition from traditional office job to freelancing can be a bumpy ride at first.

I think gig economy platforms recognise these differences between the regular working world and freelancing. To some extent, they want to keep the differences as they are because freelancers prefer the flexibility, choosing what they want to work on et cetera. But in other respects gig economy platforms want to provide benefits that donโ€™t really exist in the traditional work environment.

One thing Iโ€™ve noticed in delivery and freelancing apps is the option to tip freelancers for their work. This doesnโ€™t happen in a regular office environment. Imagine your boss asking you to draft an email to someone and then tipping you an extra $10 because you did a good job ๐Ÿ˜‚

Some apps such as Uber also benefited drivers because of changes to demand and supply. In the office, if you have a busy or a quiet day, you get paid the same. But surge pricing on Uber was a big motivator for many drivers. On a day like New Yearโ€™s Eve, when so many people are looking for a taxi to go home, demand would greatly exceed supply. This would shoot the price up of a regular journey. An opportunity to earn big bucks that you donโ€™t always get in the office ๐Ÿ™‚

Melissa Chan
February 16, 2021 3:06 pm

I feel the proportion of people working in the gig economy is so large beacuse it has created a pathway for jobs that didn’t exist in the past, or jobs that didn’t have a clear route to attainment.

If you want to be a doctor, the path isn’t crystal clear but you generally know that you have to go to medical school. The same goes for being a pilot. You have to get training at an airline academy or flight school.

But what if you want to do nothing… and get paid for it? Yes, that’s a job. South China Morning Post published a video recently about a man in Japan who rents himself out offering “nothing in particular.” Before the gig economy, how would you go after such a job? Where would you get training to do nothing? ๐Ÿคฃ Which degree would specialize in doing nothing? ๐Ÿ˜œ The man actually gets clients who hire him, primarily to have some company and companionship.

Although this example is a quirky case, it shows how the gig economy has opened up opportunities that didn’t exist before. Even if you want to do something specialized, let’s say Excel spreadsheet work, you’d have to get training and most likely work for a company that required that skill. But now you can put that skill on your profile, and you can get hired immediately without the long process of getting training and applying to companies.

The gig economy allows you to bypass a lot of the traditional hurdles. It also opens up the spectrum of services people are willing to pay for. Who wants to hire me to do nothing? ๐Ÿ˜‰

Rayan Tanwar
December 10, 2020 10:34 pm

Stats like these show how much impact tech, in particular gig economy tech, has on our lives. When it comes to these companies, it’s almost becoming the norm to have the word billion, unicorn and IPO associated with them ๐Ÿ™‚ DoorDash, for example, went public yesterday and is now valued at $39 billion! Put this into perspective, this is an app that gets someone to deliver you food from a restaurant. But the real value, of course, comes from impacting so many people. 60 million people work in the US gig economy and many more interact with it, which means those tech companies that are able to see off their competitors get a share in a very, very large pie.