Gig economy

Last updated

The gig economy is the economic system by which a workforce of people (known as gig workers) engage in freelance and/or side-employment. [1] The gig economy is composed of corporate entities, workers and consumers. [2] The Internal Revenue Service defines the gig economy as "activity where people earn income providing on-demand work, services or goods", noting that the activity is often facilitated through a digital platform such as a mobile app or website and earnings may be in the form of "cash, property, goods, or virtual currency". [3] According to the Fair Work Ombudsman, the digital platforms or marketplaces connect individual service providers directly to customers for a fee. [4] The BBC presented the following definition for the term: "a labour market characterised by the prevalence of short-term contracts or freelance work, as opposed to permanent jobs". [5] The term "gig" comes from the slang term for individual appearances by performing artists like musicians and comedians. [6] Instead of being paid a regular salary, gig workers are paid for individual gigs performed. [5]

The corporate entities employ the services of the workers for short-term commitments for temporary work assignments. They are often disrupting a market place with an alternative form of commercial product. The corporate entities are often able provide a different type of service or product because the gig business model does not burden them with costs such as sick leave and health insurance benefits as well as office space, equipment and training. Sometimes this enables them to hire expertise that they could not otherwise afford. [2] The workers include "freelancers, independent contractors, project-based workers and temporary or part-time hires". They often enjoy greater flexibility in terms of scheduling control and work-life balance. [2] The consumers enjoy the benefit of better choices and convenience. [2]

Among the common types of digital platforms in the gig economy are those to provide ridesharing services, food or package delivery services, crafts and handmade item marketplaces, on-demand labor and repair services, property and space rentals. [3] [7] A study completed in 2016 by Lawrence Katz and Alan Krueger showed an increase in gig workers, freelancers, and independent contractors of 50 percent between 2005 and 2015. These jobs accounted for 94 percent of all employment growth in the United States during those ten years. [8] As of 2021, 16% of all adults in the United States had earned income through the gig economy with higher levels of gig economy experience having accrued to younger demographics, according to the Pew Research Center. [9] As of 2017, 55 million Americans contributed services to the gig economy. [10] As of 2018, 150 million people were active in the gig economy in North America and Western Europe, according the Harvard Business Review . [11]

The size of the gig economy depends on how one defines it and whose statistics one uses. The Bureau of Labor Statistics uses the term "electronically mediated work" to represent "short jobs or tasks that workers find through websites or mobile apps that both connect them with customers and arrange payment for the tasks." A work published in September 2018 determined that such work accounted for 1.0 percent of total employment in May 2017. [12] At about the same time the Government Accountability Office stated that the definition and the data source variations support claims from below 5% to over one-third of the labor force engage in non-traditional employment. [13] According to Forbes the gig economy is a $1 trillion sector of the United States economy. [10]

Regardless of the definition used, the gig economy is growing. CNBC reported that during the 2010s, the gig economy grew by 15%. [14] Forbes describes the growth as "slow and steady". [10]

As of November 2022, the 10 largest gig economy companies by market capitalization included Intuit (tax preparation software), PayPal (online payments), Airbnb, (hosting marketplace), Uber (ridesharing) and Shopify (ecommerce). [15] Other leading companies include Lyft, OnlyFans (content-subscription service), [16] DoorDash, and Instacart. [17]

See also

Notes

  1. ↑ "What is the gig economy?". McKinsey & Company. August 2, 2023. Archived from the original on November 27, 2023. Retrieved November 30, 2023.
  2. 1 2 3 4 Lutkevich, Ben and Alexander S. Gillis. "gig economy". TechTarget.com. Archived from the original on November 6, 2023. Retrieved December 2, 2023.
  3. 1 2 "Gig Economy Tax Center". Internal Revenue Service. Archived from the original on November 9, 2023. Retrieved November 29, 2023.
  4. ↑ "Gig economy". Fair Work Ombudsman. Archived from the original on November 7, 2023. Retrieved November 29, 2023.
  5. 1 2 Wilson, Bill (February 10, 2017). "What is the 'gig' economy?". BBC. Archived from the original on November 1, 2020. Retrieved December 5, 2023.
  6. ↑ Reshwan, Robin (July 23, 2021). "What to Know About the Gig Economy". U.S. News & World Report . Archived from the original on November 29, 2023. Retrieved November 29, 2023.
  7. ↑ Vallas, Steven; Schor, Juliet B. (2020). "What Do Platforms Do? Understanding the Gig Economy". Annual Review of Sociology . 46 (1): 273–294. doi: 10.1146/annurev-soc-121919-054857 .
  8. ↑ Merrick, Amy (2018-04-04). "Walmart's Future Workforce: Robots and Freelancers". The Atlantic . Archived from the original on 2024-01-07. Retrieved 2018-04-05.
  9. ↑ Anderson, Monica; McClain, Colleen; Faverio, Michelle; Gelles-Watnick, Risa (December 8, 2021). "The State of Gig Work in 2021". Pew Research Center. Archived from the original on December 8, 2022. Retrieved November 29, 2023.
  10. 1 2 3 Karra, Srikanth (May 13, 2021). "The Gig Or Permanent Worker: Who Will Dominate The Post-Pandemic Workforce?". Forbes . Archived from the original on January 7, 2024. Retrieved November 30, 2023.
  11. ↑ Petriglieri, Gianpiero, Susan Ashford, and Amy Wrzesniewski (March–April 2018). "Thriving in the Gig Economy". Harvard Business Review . Archived from the original on September 27, 2023. Retrieved November 30, 2023.{{cite journal}}: CS1 maint: multiple names: authors list (link)
  12. ↑ "Electronically mediated work: new questions in the Contingent Worker Supplement". Bureau of Labor Statistics. September 2018. Archived from the original on March 28, 2023. Retrieved November 30, 2023.
  13. ↑ Jackson, Emilie, Adam Looney, and Shanthi Ramnath (June 2018). "The Rise of Alternative Work Arrangements: Evidence and Implications for Tax Filing and Benefit Coverage" (PDF). Census.gov. Archived (PDF) from the original on June 29, 2022. Retrieved November 30, 2023.{{cite web}}: CS1 maint: multiple names: authors list (link)
  14. ↑ Iacurci, Greg (February 4, 2020). "The gig economy has ballooned by 6 million people since 2010. Financial worries may follow". CNBC. Archived from the original on June 27, 2023. Retrieved November 30, 2023.
  15. ↑ Farooq, Umar (November 14, 2022). "5 Biggest Gig Economy Companies In The World". Insidermonkey.com. Archived from the original on December 15, 2023. Retrieved December 15, 2023.
  16. ↑ Easterbrook-Smith, Gwyn (2023). "OnlyFans as gig-economy work: a nexus of precarity and stigma". Porn Studies . 10 (3): 252–267. doi:10.1080/23268743.2022.2096682.
  17. ↑ Yuen, Meaghan (January 7, 2023). "A list of the top gig economy companies and apps in 2023". Insiderintelligence.com. Archived from the original on December 14, 2023. Retrieved December 15, 2023.

Related Research Articles

<span class="mw-page-title-main">Temporary work</span> Type of employment

Temporary work or temporary employment refers to an employment situation where the working arrangement is limited to a certain period of time based on the needs of the employing organization. Temporary employees are sometimes called "contractual", "seasonal", "interim", "casual staff", "outsourcing", "freelance"; or the words may be shortened to "temps". In some instances, temporary, highly skilled professionals refer to themselves as consultants. Increasingly, executive-level positions are also filled with interim executives or fractional executives.

Freelance, freelancer, or freelance worker, are terms commonly used for a person who is self-employed and not necessarily committed to a particular employer long-term. Freelance workers are sometimes represented by a company or a temporary agency that resells freelance labor to clients; others work independently or use professional associations or websites to get work.

Self-employment is the state of working for oneself rather than an employer. Tax authorities will generally view a person as self-employed if the person chooses to be recognised as such or if the person is generating income for which a tax return needs to be filed. In the real world, the critical issue for tax authorities is not whether a person is engaged in business activity but whether the activity is profitable and therefore potentially taxable. In other words, the trading is likely to be ignored if there is no profit, so occasional and hobby- or enthusiast-based economic activity is generally ignored by tax authorities. Self-employed people are usually classified as a sole proprietor, independent contractor, or as a member of a partnership.

Contingent work, casual work, or contract work, is an employment relationship with limited job security, payment on a piece work basis, typically part-time that is considered non-permanent. Although there is less job security, freelancers often report incomes higher than their former traditional jobs.

<span class="mw-page-title-main">Sara Horowitz</span> Non-profit executive

Sara Horowitz is a founder of the Freelancers Union and a proponent of mutualism. She has been working for unions since age 18, when she held a summer internship at the International Ladies Garment Workers Union. She has worked for the UAW, CSEA, and SEIU, and she currently serves on the board of the Albert Shanker Institute. Under her direction, the Freelancers Union built a first-of-its-kind Portable Benefits Network in 2004 and launched the Freelancers Insurance Company in 2009, which provided health insurance to more than 25,000 New York freelancers before it was closed in 2014. In her work, Horowitz advocates for the role of mutualist organizations, including unions, cooperatives, mutual aid groups, and faith-based groups, as the foundation for the next labor economy and social safety net in the United States.

An online marketplace is a type of e-commerce website where product or service information is provided by multiple third parties. Online marketplaces are the primary type of multichannel ecommerce and can be a way to streamline the production process.

Upwork Global Inc., formerly Elance-oDesk, is an American freelancing platform headquartered in Santa Clara and San Francisco, California. The company was formed in 2013 as Elance-oDesk, after the merger of Elance Inc. and oDesk Corp. The merged company was subsequently rebranded to Upwork in 2015.

Fiverr is an Israeli multinational online marketplace for freelance services. Fiverr's platform connects freelancers (sellers) to people or businesses looking to hire (buyers), encouraging a wide range of services in a free market. Fiverr takes its name from the $5 asking price attached to all tasks when the company was founded in 2010 in Tel Aviv, though many sellers now charge more.

The sharing economy is a socio-economic system whereby consumers share in the creation, production, distribution, trade and consumption of goods, and services. These systems take a variety of forms, often leveraging information technology and the Internet, particularly digital platforms, to facilitate the distribution, sharing and reuse of excess capacity in goods and services.

Fabio Rosati is an Italian-born executive who served as a CEO of online work marketplace platforms Elance and Upwork, and as Chairman of hourly work marketplace Snagajob. Rosati is a contributor to online work, the freelance economy, and real-time hiring.

<span class="mw-page-title-main">Ridesharing company</span> Online vehicle for hire service

A ridesharing company, ride-hailing service, is a company that, via websites and mobile apps, matches passengers with drivers of vehicles for hire that, unlike taxis, cannot legally be hailed from the street.

WorkMarket is a New York City-based company that provides an online platform and marketplace for businesses to manage contingent workers and IT talent. The company was founded in May 2010 by Jeffrey Leventhal.

Deliveroo is a British online food delivery company founded by Will Shu and Greg Orlowski in 2013 in London, England. It operates in the United Kingdom, France, Belgium, Ireland, Italy, Singapore, Hong Kong, the United Arab Emirates, Kuwait and Qatar. It formerly operated in Germany, Taiwan, Spain, the Netherlands, and Australia. Its subsidiary operation, Deliveroo Editions operates ghost kitchens—kitchens not on restaurant sites—for the preparation of delivery-only meals.

Catalant Technologies, Inc., formerly HourlyNerd, is a freelance marketplace that uses a machine-learning algorithm to recommend independent consultants whose skills and expertise are needed for client projects. More than 70,000 independent consultants are listed on Catalant. Catalant is based in Boston, MA.

A platform cooperative, or platform co-op, is a cooperatively owned, democratically governed business that establishes a two-sided market via a computing platform, website, mobile app or a protocol to facilitate the sale of goods and services. Platform cooperatives are an alternative to venture capital-funded platforms insofar as they are owned and governed by those who depend on them most—workers, users, and other relevant stakeholders.

<span class="mw-page-title-main">Gig worker</span> Independent on-demand temporary workers

Gig workers are independent contractors, online platform workers, contract firm workers, on-call workers, and temporary workers. Gig workers enter into formal agreements with on-demand companies to provide services to the company's clients.

California Assembly Bill 5 or AB 5 is a state statute that expands a landmark Supreme Court of California case from 2018, Dynamex Operations West, Inc. v. Superior Court ("Dynamex"). In that case, the court held that most wage-earning workers are employees and ought to be classified as such, and that the burden of proof for classifying individuals as independent contractors belongs to the hiring entity. AB 5 extends that decision to all workers. It entitles them to be classified as employees with the usual labor protections, such as minimum wage laws, sick leave, and unemployment and workers' compensation benefits, which do not apply to independent contractors. Concerns over employee misclassification, especially in the gig economy, drove support for the bill, but it remains divisive.

<span class="mw-page-title-main">2020 California Proposition 22</span> Gig economy workers employment status ballot initiative

Proposition 22 was a ballot initiative in California that became law after the November 2020 state election, passing with 59% of the vote and granting app-based transportation and delivery companies an exception to Assembly Bill 5 by classifying their drivers as "independent contractors", rather than "employees". The law exempts employers from providing the full suite of mandated employee benefits while instead giving drivers new protections:

The International Alliance of App-based Transport Workers (IAATW) is a global union federation of ridesharing and other gig transport workers.

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.