In the ever-evolving landscape of work, the traditional 9-to-5 grind is being incrementally replaced by a model more reflective of today's fluid, digital world: gig work. This paradigm shift offers flexibility and autonomy and appeals to workers' entrepreneurial spirits.
Many popular gig work platforms have existed for over a decade now, including Airbnb, DoorDash, Instacart, TaskRabbit and Uber.
Even though the gig economy as we know it today has only been around for a short time, it constitutes a substantial portion of the workforce. This, in part, is due to the following:
- An increasingly mobile workforce.
- The proliferation of digital platforms.
Despite this, it's hard to get a comprehensive picture of the gig economy. Gig work, in its broadest definition -- any kind of temporary or short-term work -- has been around for many years. In the past decade or so, these digital platforms have changed perceptions around the nature of gig work and the nature of work in general.
What is the gig economy?
The gig economy is a labor market characterized by the prevalence of short-term contracts or freelance work, as opposed to permanent jobs. It's often associated with jobs that are flexible, temporary or freelance. These jobs are typically facilitated by digital platforms that connect workers with potential jobs or projects.
Some of the most popular gig platforms are the following:
- Airbnb -- vacation, rentals.
- Amazon Flex -- package delivery.
- Deliveroo -- food delivery.
- Dolly -- moving.
- DoorDash -- food delivery.
- Fiverr -- freelance work.
- Instacart -- grocery service delivery.
- iVueit -- commercial property pictures.
- Lyft -- ridesharing.
- Amazon Mechanical Turk -- online crowdsourcing.
- Qwick -- venue staffing.
- Rover -- dog care.
- TaskRabbit -- odd jobs.
- Uber -- ride-hailing.
- Upwork -- freelance work.
Platforms serve as an intermediary between two user groups. They do not provide a service themselves; they provide the infrastructure that enables user interactions to occur. In the case of gig apps, such as Upwork, DoorDash and TaskRabbit, a service provider connects a customer with a gig worker using the app. The gig worker then uses their own resources to provide the service to the customer, guided by the app. The gig platform charges the customer a fee and gives the gig worker a portion of the pay for each gig.
Gig platforms usually don't provide gig workers with benefits such as health insurance and paid time off. Gig workers have less job security, and they take on more risk doing gig work by using their own vehicles to do delivery or their own computers and tools to do creative freelance work. The plus side of working in the gig economy is that a significant portion of jobs have a low barrier to entry, high levels of flexibility and independence.
Gig workers fall into the larger category of independent workers. Independent workers include anyone who identifies as a contract, freelance, temporary or gig worker. Gig workers tend to pursue work through a platform such as Uber or TaskRabbit, but not all independent workers find work this way. They might be substitute teachers, temps, tutors or creative professionals. They may also have a full-time job but engage in a side hustle.
There's also a distinction between the creator economy and gig economy. The creator economy includes creative workers who build a following and individual brand to promote their work. They might be artists, life coaches, influencers, blog writers or educational course creators. There are more than 50 million people around the world who consider themselves creators, according to SignalFire data.
In IT, the gig economy enables tech companies to crowdsource talent, in the way they would typically outsource jobs in the 1990s. Staffing IT projects with gig workers instead of full-time employees reduces risk and makes projects more efficient. This approach is sometimes called agile staffing or elastic staffing.
The challenges of gathering gig work statistics
Defining, gathering data on and studying gig work can be tricky. Many people understand gig work as internet-based platform jobs. However, different studies use different definitions. Some studies focus only on internet-based platform jobs, while others expand the definition to include any type of nontraditional work arrangement, short-term work or supplemental income.
In surveys where workers are asked to self-identify, a variety of different monikers are used to describe alternative working status. Other than gig worker, names that might be used include the following:
- Contingent worker.
- Flexible worker.
- Free agent.
- Independent worker.
- On-call worker.
- Part-time worker.
- Platform worker.
- Project-based worker.
- Nonstandard worker.
- Self-employed worker.
- Side hustler.
- Temporary worker.
The gig economy may also be referred to by one of the following names:
- Sharing economy.
- On-demand economy.
- Peer economy.
- Platform economy.
- Concierge economy.
In addition to making statistic-gathering difficult, it can be difficult for companies to engage and manage these workers without a comprehensive definition.
Research from the W.E. Upjohn Institute for Employment Research indicated that there is often a discrepancy between household survey data and administrative tax data when it comes to independent workforce data and trends. Official government data is lacking for the gig economy. The gig workforce is sometimes referred to as a shadow workforce for that reason. Lawmakers need official data to regulate the industry.
There have been government actions to improve gig worker protections. Some examples are California's Proposition 22, which lets gig drivers be treated as independent contractors with added benefits and a minimum earning guarantee. New York City also announced a minimum wage for delivery workers, but DoorDash, Grubhub and Uber sued the city, causing a judge to temporarily block the law. Gig work is expected to get increased regulatory attention in the United States in 2023 to make those jobs more secure and equitable.
Gig economy statistics
While there is a deficit of official government data on the gig economy, there are many statistics from other sources, such as universities, think tanks, gig platforms, consulting firms and financial publications, about gig work's significant influence. Here are some key statistics:
- Sixteen percent of surveyed U.S. adults in 2021 earned money through digital gig platforms, according to Pew Research Center. Jobs cited in the report include house cleaning, food delivery, grocery shopping and delivering packages.
- The most popular type of gig work in the U.S. is making deliveries. The next most popular were performing household tasks and ride-hailing, according to Pew Research Center.
- Fifty-six percent of gig platform workers take up gig work because they want to save up extra money, according to Pew Research Center.
- Gig work is most common among young adults ages 18-29, with 30% of survey respondents in this bracket saying they make money through gig platforms, according to Pew Research Center.
- Thirty-nine percent of American adults have a side hustle, and 28% believe they'll always need one to make ends meet, according to a Bankrate survey conducted by YouGov PLC.
- American adults with a side hustle make $810 per month on average, according to the same Bankrate survey.
- Forty-two percent of side hustlers with an income under $50,000 per year said they need a side hustle to cover day-to-day expenses, according to Bankrate.
- Gig workers earn between $1,080 and $11,130 in average monthly income, according to a study of payroll data by ADP from 2020. The study includes 1099-MISC workers and short-term W-2 employees.
- In 40% of companies, one in four employees is a gig worker, according to the same ADP study.
- Fifty-eight million American adults identified as independent workers in 2022, which equals about 36% of the American workforce, according to McKinsey.
- About one-quarter of respondents to McKinsey's survey said they take on independent work out of necessity. Another quarter said they do it because they enjoy it -- these were higher earners than those who worked gig jobs out of necessity.
- Twice as many gig workers used Supplementary Nutritional Assistance Program benefits compared to W-2 service-sector workers, according to a survey from Economic Policy Institute.
- When Uber enters a region, unemployment claims from those who own a car are 5% lower than from people without a car, according to a study from MIT.
- Nearly 5 million people had income reported for platform-based gig work to the IRS, according to a May 2023 paper from authors at the University of Chicago. The total number of people who collected money from platform gig work more than tripled from 2017 to 2021.
- There have been more than 13 million active Dashers since the platform launched in 2013, and 90% of Dashers work fewer than 10 hours per week for the platform, according to DoorDash. DoorDash has more than 2 million monthly active Dashers. Dashers are the platform's name for its food delivery drivers.
- Uber's earners made a record $5.4 million in the fourth quarter of 2022, according to Uber.
- More than 23 million Americans have earned through an online platform in the past 12 months, according to Flex.
- African American and Hispanic individuals are more commonly found in positions such as agency temps, on-call roles and contract company jobs; while freelancers, consultants and independent contractors have a higher likelihood of being white, according to a report from the Bureau of Labor Statistics.
- Twenty-four percent of gig workers responding to a Statista survey said their savings wouldn't last one month.
- Gig economy IT projects used 30% fewer full-time equivalents than traditionally staffed IT projects, according to Constellation Research. Full-time equivalents are an employee's scheduled hours divided by the employer's hours for a full-time workweek.
- Fewer than one in 10 self-employed workers expressed a desire or plan to leave the gig economy in favor of traditional, permanent employment. This comes from a survey from Legal & General Group PLC. Sixty-nine percent of respondents to the survey said they plan to work in gig jobs for the foreseeable future.
- A report from the U.S. Government Accountability Office sampled 80 annual reports from companies on the S&P 500 and found that 89% of them mentioned using contracted work arrangements. The majority of these were for IT support, HR or maintenance services.