What The Gig Economy Offers: Pros & Cons Of This Model

Whether you’re a freelancer or a full-time employee, you can build a career as a gig economy worker. There are plenty of gig jobs, from delivery or hosting services, virtual assistance, and freelance writing to working as an independent contractor.

But is it worth it?

The gig economy offers multiple benefits to workers, including extra income streams and flexibility. Unlike traditional employment, a gig worker isn’t bound to fixed schedules and workload.

What Is the Gig Economy in Simple Terms?

In 2020, around 36% or one-third of the entire workforce in the United States participated in the gig economy, and the figures continue to grow.

The model of the gig economy promotes a work environment where individuals can take on short-term, temporary, freelance, or project-based gigs or jobs.

For this type of labor market, you may choose to function as an individual contractor instead of being bound by a full-time position or employer.

Online platforms and applications are the most prevalent avenues for connecting gig workers to clients or customers in need of particular services. Good examples include DoorDash and Upwork.

What Is the Purpose of the Gig Economy?

Apart from promoting a self-directed and flexible labor environment, the gig economy also offers a means for independent workers and customers/clients to connect and exchange services more efficiently.

For clients or employers, this allows them to cut back on costs associated with onboarding and training full-time employees.

Meanwhile, gig economy workers can monetize specialized skills or talents, allowing them to pursue their passions or interests while making a living.  

What Type of Work Is Gig Economy Work?

Gig economy work encompasses a wide range of jobs and services. It offers opportunities across various industries like marketing, customer service, technology, design, arts, and more!

In the gig economy, you have the ability to work online or provide in-person tasks or services.  

You may connect with clients or customers seeking services through online applications or platforms and marketplaces.

Gig Economy Jobs and Platforms

Here are some of the most in-demand types of gig work or services and the corresponding platforms for each:

1. Delivery Services

The rise of online shopping and delivery services created a massive demand for food, packages, and other services.

Platforms such as UberEats, Instacart, and DoorDash provide opportunities for independent workers to earn money on the side by completing orders and delivering packages in their local areas.

DoorDash dominates the food delivery market with over 65% market share.

2. Lodging and Rental Hosting

Listing your property for short-term or vacation rentals through platforms like Booking.com, Expedia, and Airbnb is a profitable side hustle.

On average, an Airbnb host can earn over $900 monthly.

3. Freelance Services

Statista predicts that around 86.5 million individuals will comprise the freelancing industry by 2027. That’s 50% of the entire US workforce.

Some examples of in-demand freelance services include:

• Writing, Editing, and Proofreading
• Transcription Services
• Graphic Designing, Arts, and Illustration
• Website Designing
• Tutorial Services
• Virtual Assistant
• Social Media Management
• Consultation Services
• Marketing and PR
• Data Analytics

4. IT Services and Software Development

IT and software development services offer lucrative opportunities for gig workers, with services like software maintenance and troubleshooting.

There are only over 180,000 freelance software developers in the US, so it’s a pretty considerable career, given the high demands.

Other gig jobs include task-based services (babysitting, carpentry tasks, etc.), car and parking space rentals, and caregiving services.

What Does the Gig Economy Offer?

The gig economy offers plenty of benefits and opportunities for individuals seeking independence and a manageable career that allows them to achieve work-life balance.

Here are some benefits of working in the gig economy:

1. Flexible and Independent Remote Work

As the majority of gig work opportunities involve the exchange of services and resources through online platforms, independent workers can work anywhere.

This gives them financial flexibility, too, as it lets them cut back on expenses that come with traveling to work every day (fuel allowances, food and clothing expenses, etc.)

By working independently, you get more freedom in choosing your work hours, negotiating rates, and choosing projects. Through that, individuals can focus on other duties and interests.

2. Increased Work Satisfaction

Did you know that only one out of five gig workers are dissatisfied with their jobs?

Job satisfaction is linked to work-life balance, where more than half of gig economy workers claim they can make time for their personal lives without compromising work.

3. Save on Costs

For businesses, sourcing freelance talents allows them to reduce hiring costs and efforts. In fact, 48% of businesses hire freelancers.

This is because hiring freelance workers eliminates the need for training, onboarding, and providing benefits for full-time employees.

4. Countless Work Opportunities and Multiple Income Streams

Gig workers can take on different tasks or work for many clients simultaneously since no contract limits them.

There are also plenty of platforms to source jobs from, and tasks are detailed by gig authors, allowing freelancers to take on tasks that align with their skills and expertise.

According to Upwork, skilled freelance workers can earn up to $28 per hour or more, which is higher than what 70% of workers in the US make.

Another piece of data from ADP suggests that the average monthly income range for gig workers is $1,080 to $11,130.

Frequently Asked Questions

Here are the answers to questions people also ask about the gig economy:

Are There Disadvantages of the Gig Economy?

There are challenges and potential downsides of working in the gig economy, such as a lack of benefits (e.g., insurance and retirement accounts). As an independent contractor, you’re obliged to pay around 15% of self-employment tax, too.

Due to high competition, income stability and predictability can also be a challenge. That’s why continuous upskilling is essential.

Will the Gig Economy Continue to Grow?

The gig economy is a booming industry. Statista predicts that the gross annual volume of the gig economy will increase to about $455 billion in 2023 (from $401.4 billion in 2022).

Wrapping Up

The gig economy is a growing industry, allowing individuals from different walks of life to earn extra money on the side for marketing their labor online or through service platforms. You can also turn your gig work into a full-time career.

This economy allows financial and work flexibility, where gig workers can work on projects or jobs on their schedule and negotiate rates. However, as an individual contractor, you won’t be receiving any benefits like regular employees from traditional employment schemes do.

Please don’t hesitate to drop your questions in the comments. And be sure to share this guide with others who are interested in becoming gig workers.