What is Gig Economy?

The term “gig economy” refers to a free market system in which traditional businesses hire independent contractors, freelancers, and short-term workers to perform individual tasks, assignments, or jobs. The term comes from the world of the performing arts in which musicians, comedians, etc. are paid for their individual appearances, called “gigs.” While such temporary arrangements offer tremendous advantages, like freedom and flexibility, workers in the rapidly-evolving gig economy are finding they face an increased risk of financial hardship from being totally responsible for their own income and benefits. Much like traditional jobs, gig economy jobs are great—until they’re not.

In the “gig economy” or “freelance economy,” gig workers earn all or part of their incomes from short-term contracts under which they are paid for individual tasks, assignments, or jobs. Typified by globally-recognized companies like Uber, and Lyft—which hire people to use their personal vehicles to provide taxi-like, on-demand ride services—gig economy companies use internet and smartphone-based applications to both hire and assign workers.

Each individual gig or assignment usually accounts for only a part of gig worker’s total income. By combining several tasks for different companies, gig workers can realize cumulative earnings equal to those of conventional full-time jobs. For example, some gig workers drive their cars for both Uber and Lyft, along with renting out rooms in their homes through Airbnb. Other people simply use gig jobs to supplement their regular income.

Another aspect of the gig economy involves so-called “digital earning platforms,” like eBay and Etsy, which allow people to earn money by selling their used items or personal creations, and online handyman services, like TaskRabbit.

In many ways, the gig economy reflects and facilitates the desire of millennial generation workers for greater flexibility in balancing their work-life demands, often changing jobs several times during their lifetimes. No matter what motives drive gig workers, the popularity of the internet, with its capability for remote work, has caused the gig economy to thrive.

According to a Gallup Workplace report, 36 per cent of all U.S. workers were gig workers during 2018. “Gallup estimates that 29 per cent of all workers in the U.S. have an alternative work arrangement as their primary job. This includes a quarter of all full-time workers (24 per cent) and half of all part-time workers (49 per cent). Including multiple job holders, 36 per cent have a gig work arrangement in some capacity,” states the report.

Thought.com