Gig economy: everything you need to know about this labor market

The “gig economy” is an often-used term in the freelance work sphere meant to describe the altered way people view, but also perform work today.

And, the gig economy was worth as much as $4.2 trillion on a global level in 2020, with a growth trend that promises an even larger share in the future — as an increasing number of people become part of the gig economy day after day.

Whether they’re in it for the side income or due to the flexibility it offers, people from all over the world have embraced the gig economy as a natural addition to the ever-changing world of work.

To help you get a full grasp of the crucial labor market, we’ve covered everything you need to know about the gig economy, from the basic definitions, its growth potential and importance, most lucrative gigs available, and the potential problems it brings to everyone involved in it.

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The gig economy basics

Perhaps you’re already part of the gig economy, but you use a different term to describe your work. Maybe you have been thinking about joining this work sphere, but you aren’t exactly familiar with all the facts and figures.

No matter which group you belong to, we’ve compiled all the gig economy basics to get you started. From the meaning of the concept to the examples and its future prospects, in this section, we’ll get to the bottom of all you need to know about the gig economy.

What is the gig economy? What does the gig economy look like?

The “gig economy” involves three main components:

The workers are paid by the “gig” – Gig workers are paid by one-time-only specific tasks, projects, or shifts – instead of receiving hourly or salaried compensation. That’s why the “gig economy” is also often referred to as the “freelancer economy”, “independent workforce”, “agile workforce”, and “on-demand economy”.
The consumer requests a specific service, and the gig workers provide it – This service may be a ride to a destination, a product or food delivered, or any other similar service provided. That’s why the “gig economy” is also often referred to as the “sharing economy” or the “peer economy.
Specific companies connect the workers with the consumers – Specialized gig economy platforms serve as mediators between workers and consumers. That’s why the “gig economy” is often referred to as the “platform economy.”

How does the gig economy work?

The gig economy includes all professionals who are freelancers, project-based workers, part-time hires, temporary hires, or independent contractors.

Usually, the person looking for the services of such professionals posts the general description and requirements of the job on an online job board, freelance website, or even in the local newspaper.

Then, the professionals interested apply for the job.

All interested job candidates go through a combination of CV scrutinization, face-to-face, phone, or video interviews, as well as skill tests meant to help determine who has the best qualifications, experience, and predispositions to perform the requested job as required.

As an alternative, the matter of who performs the job may be on a first-come-first-serve basis — if the clients contact several professionals from a freelance website themselves, without posting the job. Or, it may simply be a matter of proximity. For example, a passenger requests a ride from a ride-hailing service platform and the driver who is currently located closest to the passenger comes to pick them up.

In light of all that, 3 main participants of the gig economy emerge:

The consumers – they request the services
The gig workers – they provide the services
The gig work platforms – they serve as a mediator between the consumers and the gig workers

Examples of gig economy workers

Many specific professions are a part of the gig economy:

Musicians – Hired to play at a wedding, birthday, or at a specific venue.
Journalists – Hired to write a specific piece for a magazine.
Truck drivers – Hired to deliver a load from one location to another.
Artists – Hired to paint murals, design brands, handle document layout for books or magazines.
Tutors/teachers – Hired to tutor kids or adults for a specific test, on a specific subject, or on an area of a specific subject.
Babysitters – Hired to supervise and take care of children while the parents or legal guardians are away.
Care-takers – Hired to look after a building or house while the owner is absent.
Photographers – Hired to photograph weddings, birthdays, or specific events.
Videographers – Hired to film weddings, birthdays, or specific events.
Landscapers – Hired to arrange a landscape or garden in an attractive manner.
Tech repair professionals – Hired to repair a piece of tech equipment, like a printer or a laptop.
Delivery couriers – Hired to deliver various goods (food, packages, groceries, etc.).

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As evident, the listed professionals are usually, by definition, called to provide one-time services.

People only need a music band, photographer, and videographer for their weddings once.

When someone’s laptop breaks down, they’ll likely need just a one-time visit from the local tech repair person.

Of course, tutors and babysitters may be required once or multiple times. But, in either case, their services will still be requested for a limited time period only, considering that the children will outgrow their babysitters, or master the tutored subject, or pass the exam.

What does “gig” mean in the gig economy? When did the gig economy begin?

The mere concept of “gig economy” appeared as early as the 18th century – although it won’t be referred to as such for another two centuries.

Back in those days, the “gig economy” was a result of unpredictable employment patterns: many people had to work multiple jobs, and take every opportunity to help them earn a living.

The actual term “gig economy” originated from the name for live musical performances – in that sense, the term “gigs” was first used by jazz musicians in 1915, or even 1905, to describe musical engagement.

Nowadays, the word “gig” mostly refers to temporary, side jobs.

The term “gig economy”, however, wasn’t used until the great recession of 2009, and it was first mentioned by journalist Tina Brown.

As Brown described it, the recession urged people to pursue “a bunch of free-floating projects, consultancies, and part-time bits and pieces”, all in order to make ”the sum that allows them to hang on to the apartment, the health-care policy, the babysitter, and the school fees.”

Considering that it was the recession that drove people to take on part-time or temporary work, one could say that the post-2009 gig economy may have thrived for similar reasons to its unofficial counterparts from the 18th and 19th centuries.

In the decades following the 2009 crisis, the gig economy brought forward an increased earning potential which attracted even college-educated Americans who, at the time, earned as much as $75,000, per year as gig workers.

However, the tables turned again after the pandemic outbreak in 2020. Millions of people jumped on the bandwagon of the gig economy – some of them because they have lost their nine-to-five jobs.

With an increased number of people switching their office cubicles for their living rooms, delivery services thrived, and the gig economy peaked yet again.

How many workers make the gig economy?

Today, about 36%, or 59 million Americans, are part of the gig economy. Moreover, as many as 24.6 million gig workers from America are also employed full-time.

However, these are all rough numbers – considering that anyone from babysitters to ride-hailing drivers is considered to be a gig worker, as well as that many full-time professionals take on side gigs from time to time, the US government doesn’t have a full grasp of how large the US gig economy actually is.

Some other estimates claim that there are as many as 75 million active gig workers.

💡 Want to take on some freelance gigs to complement your full-time daily job? Check out our guide on how to do it: How to start freelancing (even when working full-time).

Is the gig economy growing? Why is the gig economy growing?

In recent years, there were 5 elements that triggered the growth of the gig economy.

1. The internet has made finding and organizing gigs easier

Nowadays, with an ever-growing list of freelance websites, it’s much easier for freelancers to find gigs. Moreover, the variety of available gigs is rapidly growing, and gig workers can take their pick between general and niche-specific freelance job boards, platforms, and bidding websites.

2. New technologies have made handling gigs easier

Nowadays, with new, efficient freelancer apps emerging every day to make sure freelancers track time spent on projects correctly, bill clients accurately, as well as communicate and collaborate with companies and clients remotely, the gig economy has every opportunity to thrive.

3. The crisis changed the way people work

Each time there’s a crisis, the gig economy grows.

Similar to the 2009 recession, the COVID-19 pandemic has demonstrated a trend of wage cuts and layoffs. As a result, people have been forced to turn to other means to make the income they need, directing their attention towards gigs.

Even before the pandemic, most gig workers had already been working from home, so the moment social distancing became standard, the gig economy rapidly grew.

4. Gig economy workers became essential to the changing society

Following the pandemic outbreak, any service that helped social distancing has proven greatly valuable. From delivering groceries and medicine to picking up restaurant orders, gig economy workers have had a great share in keeping society going.

On top of that, the number of gig workers hired in transportation-based services (TRNS) is estimated to reach 31 million by 2023. The growing numbers prove that the change we witnessed is here to stay, and the gig economy will continue to soar.

5. People’s work expectations and priorities changed

Even before the pandemic, 43% of the active workforce highlighted a flexible schedule with a better work-life balance as the No.1 expectation in their future work careers.

When the crisis took everyone by surprise, parents worldwide had to quit their full-time jobs because it became impossible to balance both 9-to-5 remote work and family. This is where the flexibility and autonomy that the gig economy brings to the table became a band-aid solution.

Why is the gig economy important?

The gig economy has proven its enormous importance in recent times: in 2020 alone, freelancers have contributed as much as $1.3 trillion to the US economy, and $4.2 trillion to the global economy.

Moreover, an MBO partners’ report shows that the overall number of Americans participating in the gig economy has increased from 38 million in 2020 to 51 million people in 2021.

Some reports even forecast that as much as 50% of the US population will be involved in the gig economy as early as 2027. So, the potential growth of the gig economy will only help it gain importance in the future.

Joining the gig economy

If you’re having second thoughts on whether joining the gig economy is worthy of your time, we’ve compiled a list of the most popular gig economy companies and platforms to help you make up your mind.

We’ve also put together a list of the highest-paid gigs together with a landing a gig checklist to ensure you’re entirely ready to dive into the gig economy as soon as you finish reading this article.

What are gig economy companies and platforms? And what does it take to join?

As mentioned, gig economy companies serve as a mediator between workers and consumers. Some of the most popular ones don’t ask for special skill sets, or even active participation – you can be a driver or simply advertise your place for vacation rentals. In any case, gig economy companies are a great solution for both the full-time employees looking for an extra income and the people searching for a new, primary job.

Gig economy platforms and companies worth checking out include giants such as Uber, Instacart, Airbnb, Etsy, TaskRabbit, PeoplePerHour, and Outschool

Uber

Uber is a taxi-like service that lets you become a private driver for destination driving or food delivery. According to their statements, in 2020, Uber had over 5 million drivers all over the globe.

To become an Uber driver, you’ll need to:

✅ Be at least 21 years old and own a valid driver’s license

✅ If younger than 23, you’ll need to be licensed to drive for at least 3 year

✅ If older than 23, you’ll need to be licensed to drive for at least 1 year

✅ Own a 4-door vehicle that meets Uber requirements

✅ Go through a background check

Lyft and Doordash are similar alternatives.

Instacart

An online service that offers both purchasing and delivery services. By becoming an Instacart personal shopper, you can either shop and deliver items to the customers or be in charge of the shopping duty only. Both job types allow you to choose your own hours and don’t require any previous experience.

To become an Instacart Personal Shopper, you’ll need to:

✅ Be at least 18 years old

✅ Own a valid driver’s license

✅ Have access to a vehicle

✅ Be able to work in the US or Canada

✅ Have access to a smartphone

✅ Be able to lift 50 lbs

Similar popular alternatives are goPuff and Shipt.

Airbnb

An online marketplace that lets you offer or require lodgings around the world. As of December 2021, there are at least 5.6 million Airbnb listings across the globe.

To become an Airbnb host, you’ll need to:

✅ Be responsive to guest requests

✅ Accept quest requests when possible

✅ Avoid cancelling on guests

✅ Keep a high overall rating as a result of previous requirements

Other popular choices include Vrbo and VayStays.

Etsy

An e-commerce website that lets you offer or buy hand-made or vintage items. As of 2020, there are more than 4.3 million good sellers on Etsy, with 81.9 million active Etsy buyers.

To become an Etsy seller, you’ll need to:

✅ Sell handmade items made by you

✅ Sell vintage items that are at least 20 years old

✅ Sell craft supplies that are handmade, vintage, or commercial

✅ Make sure the items you want to sell are not prohibited elsewhere or violate Etsy policies

Similar websites include Amazon Handmade and Aftcra.

TaskRabbit

An online marketplace that lets you offer or require freelance labor work locally. There are currently 27 different types of tasks available for taskers on TaskRabbit.

To become a TaskRabbit tasker, you’ll need to:

✅ Have a US Social Security Number

✅ Be over 18 years old

✅ Go through a background check

✅ Own a valid credit card

✅ Own a smartphone

Popular alternatives include Thumbtack and Fiverr.

PeoplePerHour

An online marketplace where you can find hourly-paid projects that fit your current skills and qualifications. There are currently 2,700+ freelance projects available on the PeoplePerHour job board.

To find gigs at PeoplePerHour, you’ll need to make the best bid and proposal for a job you’re interested in.

Upwork and Toptal offer a similar gig economy experience.

Outschool

An online education platform that offers you a chance to market your classes to students from all over the world. To become a tutor, you don’t need any teaching credentials.

However, Oustschool advises its potential tutors to consider teaching the subjects they have experience tutoring or are interested in.

To become an Outschool teacher, you’ll need to:

✅ Be at least 18 years old

✅ Live in the US, Canada, Australia, New Zealand, or the United Kingdom

✅ Have a fast internet connection (over 3Mbps both upload and download)

✅ Be able to confirm your identity and go through a background check

Similar platforms are Varsity Tutors and Lessonface.

What are the highest-paid gig economy jobs? And how do you land such gigs?

As evident, there are a lot of gig economy opportunities for the workers But some pay much more than others – and, as expected, the higher-paying jobs and projects do require a special set of skills.

Here are the top 5 highest paying gig economy jobs you can currently find online:

Deep learning/Machine Learning jobs ($131.01/hour)
Blockchain development jobs ($109.77/hour)
Ethical hacking ($62.35/hour)
Cryptocurrency ($52.00)
Robotics ($44.01/hour)

1. Deep learning/Machine Learning jobs ($131.01/hour)

What’s it about: Deep Learning is a specific Artificial Intelligence (AI) function aimed at imitating the way the human brain works – your job is to develop and maintain a system that processes data, creates, and follows specific patterns involved in decision making, all similar to how the human brain handles these actions.