Be it as a side hustle, or your primary income source as a digital nomad, the gig economy is here to stay. In fact, our jobs have evolved so much that many of the paradigms once set in stone are gone. It seems that the gig economy is the latest archetype in employment to come out of this evolution. While many love this new way of working and consuming, it brings forth a new set of questions we should answer sooner rather than later.
When we think of the gig economy, the first name that comes to mind is Uber, but, in reality, there's much more to it than ride-sharing. Right now, if you can think of any service, chances are, there is a platform offering hundreds of professionals willing to provide that service for you. I love that. Chances are that many of us have used a gig economy platform at least once in our lives; they're easy to use and, yes, cheaper than traditional services. The equation works wonderfully: you pay a flat fee and get a service, and there are no strings attached to a service that (usually) works well. No wonder they've become so popular.
It's not only about the customers enjoying it. Platforms such as Upwork and Fiverr have given millions of people across the globe a chance to find more work. If there's a skill that you can exploit, using your computer, these marketplaces have endless possibilities. Some people have even landed seven-figure incomes from these platforms. That being said, adjusting to this lifestyle can be challenging because it's not how most of us are used to working, but I'm confident that, once you get past that challenge, there's potential for success.
That potential drives many startups to exploit the gig economy's riches. Understandably, this happens because there's no denying that the gig economy will persist for many years. Although it has many positives, it also has some negatives. The main is that gig economy platforms, most of the time, end up benefiting the company more than the contractors. Although, they still struggle to solve the most basic issue: how to make money.
Deliveroo was one of the first of its kind to enter Australia in 2015, and grew on the promise that it could deliver anything you need in the shortest time possible. Fast forward to now, and the company has quietly shut its doors, surrounding itself with mystery. Many companies (similar to Deliveroo) fail to hide the ugly truth that they can’t make money. For years these platforms have relied on operating at a loss, promising a bright future and holding on to dear life by the thread of somewhat-stable-economies. With the downturn that the world has seen lately, one by one, these companies have shut down. Even big names such as Uber continue to operate with billions in losses, living off their massive VC-backed funds.
What happens if operating with such losses forces the company to go under? When these companies close, tens of thousands of people lose their jobs, which is already challenging enough. Sure, as customers and clients, we love the gig economy, but as employees, the story is entirely different. We've all heard of the tiring schedules, but it's much more than that.
More and more reports have come up that gig economy workers have an almost unbearable pressure. Every review counts, every delivery has to be perfect, and the employee is at a disadvantage if the platform isn't helpful. Studies have shown that gig workers live in perpetual uncertainty, where companies can change their payment policies at a moment's notice, and then you have a ticking time bomb. These platforms have become so powerful that they have become tools of political change.
Entire countries are willing to bet on gig economy platforms. One of the strongest markets in the gig economy is the US, and its gig economy sector has diversified in fascinating ways. Approximately 40% of all US employees have income coming from the gig economy. That's a 66% growth compared to 2020, and there are no signs of slowing down. By comparison, in India, more than half of all the new employees in the last two years belong to this sector. Some estimate that by 2023 the gig economy will reach a gross volume of nearly $500 billion, and it doesn't just impact the US.
There's no denying that the gig economy is imperfect, yet, as customers, we love it. Be it a company, or an individual, if there's a platform that can make our lives easier, we're going to use it. Yes, even if that means that someone on the other side is stuck permanently in an uninsured and stressed-out hustle, worrying about the next rating. Despite all the problems, gig economy platforms will continue to grow. In fact, the future of the gig economy is so vast that even hospitals are turning to it to solve the oscillating staff needs that come with seasonal health crises. That's something we couldn't even fathom ten years ago, and now, it makes perfect sense.
For the moment, it makes perfect sense that more and more startups are coming up with their solutions; their proposals to solve the world's needs with a gig economy. Some of them, a small percentage, will hit it right. The rest will provide a platform for people to work on, grind away, and make a living. Meanwhile, these startups will probably never profit, yet the gig economy will continue to exist because it solves our problems. Yes, it's broken and, sometimes, unfair, but it works.