While gig work is certainly not new, the expansion of gig platforms, such as DoorDash and Uber, has been staggering in the past five years. It’s no longer just rideshares or food delivery, though, as gig work now also includes assembling furniture, pet sitting, helping with residential moving, grocery shopping, and so much more. In fact, in 2021, sixteen percent of American adults earned money through a gig platform.

Independent contractors, as they are also called, in the United States earn between $1000 to $11,000 per month on average. Unfortunately, this statistic also includes project workers, freelancers, and consultants, so it may be misleading. Regardless, gig work and gig platforms are on this rise.

The Perks

Americans seeking employment are currently looking at two to three months, on average, from the time they first begin applying for work to actually starting a new job. Gig platforms, however, often approve new account profiles within 24 to 72 hours. Some may even see approval the very same day, depending on certain circumstances. This ease of entry is critical for those who cannot afford to wait 8 to 12 weeks to begin employment.

The ability to set your own schedule, working when you choose to versus when an employer says you must, is another benefit of this type of work. In order to earn the most dollars, contractors will want to work as often as possible and particularly during peak hours. The flexibility, however, is great for those with children, families, or other obligations.

Another benefit is being able to control your own work environment. There is a great deal of freedom in driving your own car, listening to your own music, and setting your own schedule. It is certainly less restrictive than most traditional workplaces.

The Drawbacks

Of course there are also challenges with gig work in comparison to more traditional jobs. Along with a lack of stability and consistency, is the lack of traditional benefits, such as health insurance, that is often tied to full-time employment. Independent contractors are also likely missing out on things like paid time off and sick leave.

Demand is driven entirely by outside forces, making the work and pay inconsistent. Peak hours and peak times of the year may result in ample business, while other times, the number of customers, orders, or bookings may stall out dramatically.

Unlike a traditional W-4 position, taxes are not typically deducted from the pay received using these platforms. A year-end tax statement is usually issued (such as a 1099), however, and the worker is expected to report and pay taxes on that income. Without careful planning, the contractor may end up owing a significant tax bill.

While climbing the corporate ladder may not appeal to every worker, knowing there is opportunity for advancement is an important incentive for many employees. With gig type work, however, there really is nowhere higher to climb.

Market and Political Resistance

The expansion of gig platforms has not gone unopposed. For various reasons, these entities have been met with resistance from private companies, the public, and lawmakers.

Uber and Lyft, for instance, have been targeted by politicians across the nation. Being pressured by private taxi companies and concerns over safety, lawmakers stepped in to regulate how these two transportation network companies would function within their state or municipality.

Short-term rentals, such as AirBnB and VRBO, have also come under fire as resistance from traditional hotel and condo businesses and locals has grown. Communities like Orange Beach and Mountain Brook have imposed serious limits on these rentals, citing increases in criminal activity, noise, trash, and traffic as public concerns. There is also a legitimate concern that too many homes are now being treated as rental properties when the nation is already faced with a major housing shortage.

Conclusion

This new gig economy is not going away anytime soon. With at least 1 in every 6 American adults reporting earnings from some sort of gig, this cannot be simply dismissed as any sort of trend or fad.

The reality is that the majority of those engaged in this type of work are doing so for the necessary additional income to fill in gaps in their budget as living costs have risen significantly and traditional wages have simply not kept pace. As kids, we used to mow lawns or babysit for extra spending money; now, as adults, many are turning to delivering lunches or helping with unloading furniture in order to make ends meet.