Gig Economy – What Is It? Definition, Examples And Future

What is the gig economy? Examples of gig economy apps? Check the dictionary and “gig” stands for a single professional engagement, usually of short duration. The gig economy is an economic perspective that’s been growing a lot lately and revolutionizing the way the world of work is organized. Let’s find out more.

What Is The Gig Economy? Definition Of The Gig Economy

A gig economy is a free and global market where companies and contractors (independent workers) set short-term and on-demand professional relationships that are both flexible and skill-based.
In other words, digital platforms like Upwork or Fiverr have been allowing a big number of freelancers (or people with a fulltime job wanting to make extra money) to show their skillset. On the other hand, businesses can choose specialized staff from all over the world. This allows them to afford expensive skills for a short period or to have low recruitment and selection costs as there’s a large pool of candidates to choose from.

The Gig Economy vs The Sharing Economy

“What’s the difference between the gig economy and the sharing economy?” This isn’t an unusual question. In fact, many people often use both concepts interchangeably as if they were one and the same. However, and despite being closely related, the gig and sharing economies aren’t exactly the same.

If we take a look at the Journal of the European Union, the gig economy stands for initiatives based on contingent work that is transacted on a digital marketplace. The UE speaks of it as part of a bigger concept that is the sharing economy (SE). According to this source, the SE encompasses two main categories. One that’s about the on-demand economy, of which the gig economy is part, together with the access economy, this latter standing for initiatives with business models where goods and services and traded under the principle of access rather when ownership. And the second category, called pooling economy, where SE initiatives are collectively owned (commoning) or where there’s a peer to peer approach and users are involved in the design of the productive process (collaborative).

In easier words, the gig economy is about individuals selling their skills to all-size companies, on a part-time basis, for the short-term and being paid per assignment. The sharing economy is a wider concept that comprises the gig economy and where people share both skills and assets, using large scale digital technology and data collection.

Framing The Gig Economy

Technology has changed a lot the way our economy and society work. We now communicate, travel, bank, play, meet new people and work differently. And the labor market isn’t made of stable or permanent jobs where workers make out a career inside a company anymore.

Today, we have the gig economy of temporary or contracted employment, where freelancers’ skills hired for projects with an on-demand basis. These experts can be considered freelance workers, virtual or remote workers, consultants or even independent contractors, depending on the industry. They allow companies to momentarily close their skills gap with their external expertise to cover projects with limited duration.

This is good, from one side, to independent workers who can manage their time, the projects they work on and travel while working. From the employer’s side, they can select the best people for the job from a large pool of candidates. This selection process, as well as the payment, are both quite easy and safe thanks to digital platforms. They’re the ones allowing jobs and location to be decoupled and giving freelancers the opportunity to work from anywhere in the world, on a diverse number of projects, with clients from different geographies.

Examples Of Apps And Companies In The Gig Economy

According to Randstad citing the New Yorker, the gig economy is embodied by many companies from the TaskRabbit to Fiverr, and Handy or 99 Designs. These marketplaces are based on ratings and secure payment systems routed via apps.

The internet and big data allowed for the gig economy and the sharing economy to grow and develop. And in fact, today, internet connection is all that’s needed to buy or sell transactions and to agree on making business. All this is made easier thanks to cloud-based platforms that bring independent workers and clients together, such as:

• Example of a gig economy app: Upwork (freelance services)
• Gig economy app: Fiverr (freelance services)
• Example of a gig economy app: Peopleperhour (freelance services)
• Gig economy app: Malt (freelance services)
• Example of a gig economy app: Thumbtack (home improvement)
• Gig economy app:  99 Designs (logos and graphic design)
• Example of a gig economy app: Airtasker (get your to-do list done)
• Gig economy app: TaskRabbit  (home improvement projects)
• Example of a gig economy app: Handy (home improvement projects)
• Gig economy app: Uber (transport)
• Example of a gig economy app: Lyft (transport)
• Gig economy app: Mytaxi (transport)
• Example of a gig economy app: Ubereats (food delivery)
• Gig economy app: Glovo (food delivery)
• Example of a gig economy app: Jinn (food delivery)
• Gig economy app: Deliveroo (food delivery)
• Example of a gig economy app: Citysprint (delivery and logistics)
• Gig economy app: Anyvan (delivery, transport, and removals)
• Example of a gig economy app: AmazonFlex (pick up and deliveries)

Who’s Working On the Gig Economy? And How To Keep Them Motivated?

These gig-based platforms allow people to use their expertise and abilities to earn money on a short term and on-demand basis jobs. The people working in the gig economy come from a variety of backgrounds and they join it for different reasons too. While some count on gig economy jobs as their primary source of income, others have it as a supplement. And there’s still the people doing it by choice vs the ones doing it out of necessity.

Why Are People Working On The Gig Economy?

A job from nine to five for a single employer is not so common as it used to people. Today, millions of people gather their income from different streams and work independently. While 34% (54 million people) of the total U.S. workforce was made up of freelancers in 2016, 4.4% of the UK’s population, i.e. 2.8 million people, worked in the gig economy between January 2017 and January 2018.

A BMO Wealth Management study tried to unveil the reasons why more people are working for the gig economy. Data from this study showed most people (60%) voluntarily decided to be self-employed. Of these, 42%  said they decided to do it because they needed a new challenge or a change, while 15% needed to find purpose after a previous business venture.

Furthermore, more men than women (48% vs. 36%) needed a new challenge, and more millennials voluntarily made the choice (65%) compared to generation-Xers (57%) and boomers (59%), the report says. At the same time, another interesting insight is that more boomers felt they needed to supplement their retirement income (23%), compared to 13% and 6% of generation-Xers and millennials, respectively.

The Future Of The Gig Economy

Many reasons make it reasonable to anticipate that the gig economy and independent work will grow further. In McKinsey’s study, nearly 14% of those in traditional jobs and people who are not currently working reported that they would like to become independent primary earners, i.e, using the gig economy as their main source of income.

As McKinsey’s study says, independent work is developing quickly as digital platforms create large-scale marketplaces for workers to connect with buyers of services. On one hand, they allow for workers’ wishes of being independent and managing their time to be fulfilled. On the other hand, they give work to a large share of the population who’s unemployed or inactive and want to work. Furthermore, they also help businesses to find people with specialized skillsets for short-term projects.

Randstad’s view analysts share the view that the gig economy will continue to grow. In this way, businesses and independent workers need to pay attention to how the gig economy is regulated and ensure (some of) workers’ rights. Equality and fairness must be protected so that both sides can continue to take advantage of the opportunities the gig economy offers.