Gig Economy 101: What is the Gig Economy?

The term is often thrown around – but what do people mean when they say “gig economy”?

By: Brian Gaysunas

You may have heard the term “gig economy” thrown around, but what exactly is the gig economy? The gig economy is a term that reflects a recent set of changes we’re seeing in the workforce. The gig economy is a response to full-time employment – instead of long-term employment, more workers are opting to work short-term shifts, or gigs, thus – the gig economy.

 

The birth of the gig economy

There are a number of major companies leading the charge in the creation of a new workforce, such as Uber, DoorDash, and TaskRabbit. Freelance, flexible work is made readily available by these companies, attracting millions because of the ability to determine your own schedule and work only when you want to.

 

As technology improves, opportunities to make a living through technology have grown exponentially. People willing to work can now be connected easily with those who need help in some way. Mobile apps have become mini-mediators between the two groups and have lead to many becoming independent contractors due to the flexibility and nature of the work.

 

There are those who use the gig economy to their advantage as ‘side hustles’ by continuing to work full-time or part-time but also working through some gig economy service for extra money. Currently, over 10% of Americans hold alternative employment arrangements – using gigs as their primary source of income.

 

The growth of the gig economy
The gig economy is largely shaped by innovations in the early 21st century. TaskRabbit, founded in 2008, was formed when its founder needed to run an errand (buying food for her dog) but didn’t have time to do so before going to dinner. TaskRabbit was revolutionary because it drew in people with free time to help those who had no free time, known as RunMyErrand.com in its early stages. Later that year, Airbnb was founded, allowing people to share free space in their homes. Uber developed a similar concept in 2009, bringing in people with free time and cars to help those who needed rides.

 

These three companies, which all have seen massive growth in recent years, resulted in what is called the ‘sharing economy.’ Through these apps, people could share something they had as a service to those who needed help.

Since the turn of 2010, apps with similar concepts began to rise, now accommodating pet-sitting through Rover in 2011, grocery shopping by Instacart in 2012, and food delivery through DoorDash in 2013 (although GrubHub predates it, going back to 2003). We’ve now moved into the territory of traditional work – tilr, launched in 2016, sends job opportunities at major companies and small businesses to workers on the app.

 

The future of the gig economy
The gig economy continues to grow, with more people attracted to the flexibility offered by short-term gigs. This has major implications within the recruitment and hiring worlds – employers are beginning to seek alternative methods to traditional hiring. Flexibility benefits both businesses and workers – getting what you need only when you need it has driven the growth of gig work platforms. Gig work has become an increasingly legitimate primary source of income and has shaped the way work operates.