Do you like to make a few extra bucks on eBay? Is Uber now your go-to cab ride? Ever rented out your house on AirBnB?
If your answer to any of these questions is “doesn’t everyone these days?” then like millions of people across the world, you are cashing in on the latest bandwagon to emerge from Silicon Valley: the gig economy.
And if your answer is “uhh, I’ve no idea what any of that is,” that’s probably because the phrase “gig economy” is relatively new. You might know it better as “the sharing economy” or “the self employed workforce.” Either way, we’re here to walk you through it.
Whatever you’re selling, we’re buying.
Coined in 2009 by the Daily Beast’s Tina Brown, the gig economy is the new catch-all term for anyone who touts their skills online to the highest bidder using websites and apps like Fiverr, Etsy, TaskRabbit, and countless others. Freelancers, contractors, consultants, temporary workers, buyers, sellers, traders, and bargain hunters alike are all finding their ‘gigs’ on the internet. Whether it’s $100,000 contracts or $2 trinkets, there is money to be made.
“No one I know has a job anymore,” wrote Tina Brown in her 2009 article, ‘The Gig Economy’. “They’ve got Gigs.”
“It has never been easier to find little jobs for little payments,” notes British economist Tim Harford in a recent Financial Times article, but for growing numbers of workers, the gigs are not so little anymore. Many are finding both the income and the lifestyle they dreamed of in the gig economy. The Harvard Business Review aspirationally calls this “agile talent.”
What is the gig economy?
A precise definition of what the gig economy actually is, how big it is, how it is managed, and even the word’s deeper etymological roots, are still being debated. But what can be said for sure is that what started out as a buzzword is now much more than that. The gig economy is here to stay.
Just last week, linguistics expert Geoff Nunberg from the University of California, Berkeley, made “gig” his word of the year––beating his other semiotic stars of 2015, “refugee” and “microaggression,” to the punch. (And to Nunberg’s credit, he did at least choose an actual word for his word of the year, unlike the Merriam-Webster and Oxford English dictionaries. Merriam-Webster went for “ism”, a suffix, while the OED’s choice, the emoji, doesn’t even contain any letters ???! Perhaps they should look up the meaning of dictionary before they settle on next year’s winners?)
We’re all hippies at heart.
As Nunberg explains, gigs were originally the money-spinning wheels that kept beat poets and musicians on the road in the mid 20th century, but they are now the means by which millions of us supplement, or even make, a living. For some, gigs remain true to the word’s counterculture roots of the 50s and 60s––they are simply a means to an end. We are getting smarter, as Mark Warner notes in the Washington Post, about cashing in on the things we would being doing anyway, like our daily commute or selling the empty space in our homes when we go on vacation.
But for others, there is nothing casual about the gig economy: it is the only end in sight. As Jennifer Guidry’s story highlights in the New York Times, some have no option but to trade in the benefits of full-time work for the flexibility of on-demand employment. Jennifer struggled to make work fit with her new responsibilities as a mum, saying, “I started applying for part-time jobs, but those are very rare and highly competitive. Midcareer, there is very little available part time for stay-at-home moms.”
Her solution, like so many others, was to start working for cab ride apps like Uber and Lyft, and for on-demand delivery services like Sidecar. To maximize her income, Jennifer is often up at 4 a.m., while the rest of her family are tucked up in bed, to drive higher-paying clients to Boston’s Logan International Airport. She’s working hard to make it work for her family, but her income is not as reliable as she would like it to be.
“You don’t know day to day,” she adds. “It’s very up in the air.” So the gig economy can be a challenging place to earn a living.
Never work a proper job again.
But then you have people like software developer Steven Boyd who have gigged their way to paying off their mortgage by their early 30s––as he explains in CIO’s ‘Tech pros make the most of the ‘gig economy’ article.
“At first I was scared to go independent,” he reflects. “I felt that I needed that stability you get from a full-time permanent position.” But now Steven is making up to $250,000 a year, gigging is hardly the word for it anymore. He has found his vocation. He works hard for it. And it pays. Which is why so many young professionals are drawn to it.
“We now have a generation of workers who never had full-time jobs,” says economics professor Can Erbil. “That is not the exception but more the norm for them.”
How big is the gig economy?
The vast variety of folk who are feeding the gig economy––from self-taught cab drivers to highly trained professionals––makes it almost impossible to get a handle on how large it is. The U.S. Government isn’t even counting. Labor force records only show how many people are self-employed, and these numbers are falling, which leads many to argue that the official figures don’t tell the whole story.
Naturally, people are drawing their own conclusions.
At the lower end, a report published in December 2015 by The Hamilton Project estimates that just 600,000 people in the U.S. (equivalent to 0.4 percent of the total workforce) currently work in the gig economy. This figure is much smaller than other estimates and while some may use it as evidence that the gig economy is simply “Silicon Valley Hype”, the report maintains that these workers still represent a significant and growing minority who not only warrant our attention but greater protection.
This protection should be afforded to a much larger proportion of the workforce if you follow Deloitte’s latest research into the gig economy, published in February 2015. This report suggests that more than a third of U.S. workers are now gigging, a figure that freelancing app Upwork and the Freelancers Union would both recognize. Formerly known as Odesk, Upwork is reportedly hooking freelancers up to a staggering $1 billion of work every year. In October 2015 they announced, in a joint report with the Freelancers Union, that almost 54 million Americans are now doing freelance jobs. No surprise, then, that the union’s founder Sara Horrowitz enthuses that “the freelance surge is the Industrial Revolution of our time.”
Can the regulators keep up?
Going even further than this, Time Magazine found in a poll conducted by Burson-Marsteller and the Aspen Institute Future of Work Initiative that 44% of U.S. adults have now participated in the gig economy. Participated. Now that’s a broader measure. But when you include “lenders and borrowers, drivers and riders, hosts and guests,” as the poll does, you can quickly see how many lives the gig economy will touch, and why many are calling for labor statistics and regulations to catch up––including those who find their gigs in Washington, DC.
Sen. Mark Warner, a Democrat from Virginia, recently wrote to the U.S. Department of Labor and Bureau of Labor Statistics:
“It has become clear to me that the federal government’s definitions, data collection and policies are still based on 20th century perceptions about work and income. In a 21st century economy, we need new and better information so we can understand the potential policy ramifications when more people, whether by personal choice or economic necessity, are making a living with no connection to a single employer, or without access to the safety net benefits and worker protections typically provided through traditional full-time employment.”
Elsewhere, presidential hopefuls Jeb Bush (Rep.) and Hillary Clinton (Dem.) have also weighed into the debate.
Who needs bean counters anyway?
Perhaps the official data is already there though? In December 2015, Eli Dourado and Christopher Koopman from The Mercatus Center at George Mason University reported in “Evaluating the Growth of the 1099 Workforce” that the number of people filing independent contractor forms, known as 1099s, has gone up by 22% since 2000, while W-2 forms, which are issued by employers, have stagnated.
“The shift toward more contract work is a real and dramatic change in the labor market,” write Dourado and Koopman in the report, echoing the evangelism of Horrowitz, and of Fiverr’s Micha Kaufman, in more measured tones.
It’s all about reputation.
Other voices calling for greater protection of workers in the gig economy can be heard in Nick Grossman and Elizabeth Woyke, who in a recent report called for traditional workplace benefits such as healthcare insurance and viable pension schemes to be extended to independent workers. But the report also goes beyond this, pointing to new challenges which are unique to the gig economy, such as the difficulty of transferring positive reviews from one app or website to another when sharing your resume.
“The biggest problem we saw was that all these platforms were building their own siloed reputation systems,” says Zach Schiff-Abrams from Karma.
“I built up my profile on eBay over years,” he adds. “I bought and sold hundreds of things; I’ve got a bunch of reviews. If I start selling on Etsy, that [reputation] should be able to port over, but instead I have to start from scratch. Previously, there was no way for me to port that data over. That’s the unique problem that we’re trying to solve with Karma.”
It’s not just employees who would find review sharing useful. It could help employers too.
“If I’m running an on-demand company and I’m hiring some workers, I should be able to onboard, say, someone who’s done 100 rides with Uber and has a 4.8 rating,” says Teck Chia, a dispatcher. “I should be able to trust that this person has some kind of skills or knowledge to pick something up from Point A and drop it off at Point B, without having to do a lot of orientation and training. So I think identity and reputation is really important in matching workers to work.”
So there are challenges, and uncertainties, for employees who choose to go it alone, but the opportunities this path presents, not just to them individually but to the economy as a whole, make them well worth exploring. Globally, the McKinsey Global Institute estimates that by 2015, online talent platforms could boost GDP by $2.7 trillion. That’s a lot of trinkets.
Maybe it’s time to join the bandwagon.
Ready to join the gig economy?
Read NBC’s guide to Part-Time Jobs That Pay.