What’s Going On With the Gig Economy?

Whether the appeal is flexibility or extra income, the gig economy has undergone a huge expansion over the past few years.

What’s involved in the gig economy, and where might it evolve in the years ahead?

What is the gig economy?

The gig economy is a labor market consisting of temporary, short-term contracts and freelance work. These independent contracts can offer workers more flexibility than full-time jobs, but they also provide less stability and, generally, no other benefits (such as health insurance). 

Some of the more popular gig economy jobs include ride-sharing services such as Lyft, food delivery services like Uber Eats, freelance help with everyday tasks through TaskRabbit, and grocery delivery services such as Instacart. While some of these were negatively impacted by the pandemic (will Uber Pool ever come back into existence?), others, such as grocery delivery, expanded exponentially.

COVID-19 and the gig economy

The pandemic profoundly impacted the job market, and gig work was no exception. Although it had been flourishing prior to the pandemic, having doubled in size in the previous six years, it grew by 33% in 2020 alone, to $1.6 trillion. That’s 8.25 times faster than the overall U.S. economy grew! 2020 was also when 2 million Americans were introduced to gig work. 

According to the Great Resignation survey conducted by Onbe in February 2022, 44% of the over 650 workers that were asked responded that they

So, why was this particular form of work so popular? 

On the one hand, the pandemic led to a lot of job insecurity and shifts in priorities. With businesses shutting down daily and laying off employees, many people turned to gig work to make ends meet. 

On the other hand, a lot of people found their positions becoming remote – giving them the flexibility to add on a side hustle or explore new possibilities. Some pursued gig work to supplement their salaries, while others realized the unexpected benefits of working from home.

In fact, many gig economy jobs are not the primary source of income for workers. Another online survey of 2,788 U.S. adults found that 63% of gig workers (roughly 59 million out of 93 million total gig workers in the country) also held full-time jobs in 2020. The gig work for this majority was an additional financial security blanket.

Women and the gig economy

Some fascinating studies took a closer look at how the pandemic impacted women. For example, women were more likely to have left or changed jobs because they bore more childcare and housework responsibilities. 

Axios found that the number of women working for Uber (both ride-share and delivery) has increased by approximately 50% since January 2021, and DoorDash’s delivery workers are 58% women. 60% of these workers said they did the job for the flexibility, which allowed them to care for their family members, compared to 30% of men.

Indeed surveyed 1,001 women who transitioned from full-time to gig work, part-time work, contract work, or left the workforce altogether after the pandemic began. It founds that more women are opting for flexibility over stability in their jobs – in some cases, it’s not an option but a necessity. On the bright side, 38% who moved to gig work reported improved mental health. 

Where’s it headed?

The most recent research indicates that the gig economy will only keep burgeoning in the years ahead.  Upwork says there will be 86.5 million freelancers by 2027, with growth in freelance outpacing overall US workforce growth by a factor of three since 2014.

It’s a global trend, too. The Boston Consulting Group says the number of gig jobs in India could rise to 90 million in 8-10 years, for instance.

What’s driving this growth? For workers, there’s the welcome flexibility and convenience involved in gig work, especially as work can wrap around other demands like education or parenting. It’s also very inclusionary, offering openings to people from all segments, often no matter where they may be located.

As for demographics, Boomers and Gen Xers make up the biggest cohorts on a gig working platform like Wonolo, but Gen Z and Millennials are making a growing share of the gig workforce. Gen Z members are proficient with technology, so it’s not surprising they’re taking to the advantages of gig work.

Employers, obviously, can hire gig workers in response to demand, giving them both greater agility and lower workforce costs than full-time employees. During the pandemic, the ability of restaurants and hospitality venues to transition to gig-oriented platforms like UberEats and DoorDash, among many others, allowed them to weather the pandemic in a way that would have been unobtainable several years ago.

If the experience of the past few years shows us anything, there may be new wrinkles in the development of the gig economy as we head into the future.