The gig economy has provided millions of people with new sources of income and the chance to enjoy better job flexibility. It’s growing every year and it’s only expected to get bigger. But when did the gig economy start? How has it changed since it began?
In this guide, we’ll give a detailed breakdown of when the gig economy started, how it has evolved, and where it’s predicted to go.
The gig economy is a system in which businesses contract workers for short term jobs or tasks - typically through mobile apps. These temporary, contract, and freelance jobs offer more flexibility than traditional full-time jobs. Many people that work in this labor market have multiple gigs going at a time to sustain a livable income.
In recent years, the gig economy has exploded. But it certainly didn’t start overnight. We’ve traced the onset back as far as 1994 – when only approximately two million computers were connected to the “World Wide Web.” Now, in 2019, approximately 4 billion people use the internet. And an estimated 60 million of them are expected to remain in or join the gig economy by 2020.
The traditional employer-employee relationship is evolving. The rise of the demand economy is changing the nature of work as well. Both will continue to do so as more and more people seek alternative work arrangements made possible by technology.
Independent workers in the gig economy perform a wide range of tasks. Jobs can be as simple as dog walking to more complex assignments like blockchain architecture.
The most popular are within the sharing economy: transportation, delivery, lodging, and lifestyle.
The transportation industry includes ridesharing, scooter rental, and car-share companies. These gigs allow you to do everything from operating your own taxi to charging and repairing electric scooters. So what makes this industry the most popular? It requires little experience to get started and the jobs are easy for most people to get.
The on-demand delivery industry has made it super easy to order what you want and have it delivered right to your door within an hour or so. Drivers and couriers deliver food, groceries, alcohol, and almost anything from local and online stores.
The platform economy is changing the lodging industry and the way people travel. Anyone can list their home on a lodging site and earn extra money by renting a bedroom, a couch, or an entire house. It's perfect for people looking to make a little extra money, and it’s a great way to avoid having to stay in a traditional hotel.
The lifestyle industry provides platforms that make it easier to take care of day-to-day things that affect your life. Babysitting, dog walking, moving, and house cleaning can now be more than side hustles — they can be full-time self-employment.
The transportation industry includes ridesharing companies, scooter rental companies, and car share companies. These gigs allow you to do everything from operate your own taxi to charge and repair electric scooters. So what makes this industry the most popular? It requires little experience to get started, and the jobs are easy for most people to get.
The delivery industry includes food and package delivery companies like Postmates, Doordash, Amazon Flex, and more. These gig services allow you to get paid for picking up and dropping off items at consumers’ houses, and require little experience to get started.
The lodging industry includes short-term housing rental companies like Airbnb and VRBO. These gig services allow renters and homeowners to rent out their entire home, a single bedroom, and more. These services require minimal experience to get started.
The task industry includes assisting individuals and companies with simple tasks through services like Mechanical Turk, Handy, and more. Workers earn reasonable wages for completing simple tasks (many of which can be completed from home). These services require minimal experience to get started.
The lifestyle industry includes selling clothes online through Poshmark, teaching classes through ClassPass, and much more. These gig services offer great ways to escape the 9-5 lifestyle by getting paid to do work that you love.
There are hundreds of gig services, and the number is constantly growing. Let's look more in depth at the history and progression of this exciting new sector of the economy:
Amazon launches its online marketplace. It becomes the first online platforms for buyers to purchase goods and sellers to sell items. It all begins with the buying and selling of online books.
Elance becomes the first online platform to connect freelancers with businesses looking for contract labor. It has since merged with oDesk to form Upwork, one of the largest online freelancer platforms in the world.
Seamless creates a platform that connects restaurants with customers to assist in food delivery. It has since merged with GrubHub and now contracts freelance workers to make the actual order deliveries.
YouTube is founded. It allows any individual with a web cam or video camera to upload their own videos and provide entertainment to the public. It also creates a new opportunity for individuals to earn income by placing ads into their videos.
Airbnb and TaskRabbit launch. Airbnb allows individuals to rent their homes and apartments to travelers for short periods of time, changing how people travel and where they stay.
TaskRabbit creates a platform where freelancers can complete small tasks. Tasks vary from assembling IKEA furniture to making customer service phone calls.
Uber is founded, connecting drivers and riders through their app.
WeWork launches, offering individuals and businesses with the option to lease individual desks and small offices by the day or month.
UK employees are granted the right to request flexible work schedules after 26 weeks of continuous, full-time employment.
As the gig economy continues to grow, the biggest companies continue to rise to the top and either merge with, or acquire, their competitors.
We’ve already seen Uber acquire Careem in order to expand their presence in the Middle East. We’ve already seen Grubhub merge with Seamless. We’ve witnessed Elance and oDesk merge together in order to become Upwork. So we can only expect that more mergers and acquisitions will take place in the next few years.
The scooter rental industry is on the verge of this as we speak. There has been talk about Uber buying Lime scooters or Bird and Lime scooters merging together to form one company. Both Lime and Bird are reportedly having difficulties with cash flow, so the chances of them both surviving without raising new capital or merging with another company are low.
The more companies that merge, the less competition there will be. And that could mean big trouble for gig workers – especially for those that currently work for both companies (as many gig workers do).
Most businesses experience a fluctuation in their need for employees. Hiring cycles vary from business to business, and it’s one reason why workers have to endure lay-offs from time to time. But companies across the board are starting to figure out that hiring freelancers is a cheaper and more effective way to run their business.
Businesses everywhere are starting to embrace the concept of hiring freelance talent. Not only is this a perfect way to deal with fluctuations in work, but it allows businesses to save money on hiring salaried employees. Freelancers and independent contractors don’t receive benefits, health insurance, or paid time off.
Remote work, freelance work, and contract work is changing not only how, but where people work. Without the confines of a traditional office, workers have the flexibility to perform their work from anywhere they want. This will surely lead to an increase in globalization.
Globalization of the work force is two-fold. It allows companies to hire teams of people that live in other cities and countries, allowing you to access a much greater pool of talent. It allows workers the chance to move to a different city or spend a month or two living in another part of the world. Globalization goes hand-in-hand with remote gig work, and it’s a benefit to both businesses and workers.
While gig economy workers tend to have a better work-life balance, and while getting out of a noisy office can help those of us with anxiety, it’s still easy to feel lonely and isolated when you work independently. As the number of gig workers rises, there is likely to be more demand for social activities to replace those in-office interactions.
We’re already seeing this with WeWork. Not only does WeWork provide short-term office rentals, but it offers freelancers a chance to interact with people face to face. The freelancing platform Upwork is also jumping on this trend. Upwork now has local ambassadors who organize networking and social events in various cities.
Some companies in the gig economy make their workers verify their identity, pass background checks, and attend training sessions. HopSkipDrive, for example, requires that its drivers have at least 5 years of caregiving experience (since they drive kids). Papa Elder Care has location tracking built into their app to know where workers and clients are all at times.
As the gig economy grows, we expect that more companies will go above and beyond in order to make their services as safe and effective as possible. By preventing fraud and providing protection, both customers and workers will benefit.
As more and more people turn to the gig economy as a source of income, we’re seeing legislators trying to make significant changes to employment laws. In May 2019, the state assembly in California passed a bill that could have a big effect on the gig economy in that state. And it’s likely that there could be additional regulations and changes to come.
In short, the bill states that workers who perform services for hire are employees – not independent contractors. The bill is designed to protect workers’ rights, but it could seriously impact flexibility for workers – and that’s what the gig economy is all about.
It’s estimated that by 2020, more than 60 million American workers will play a role in the gig economy. Workers want flexibility. They want a work-life balance. They want to do work that they actually enjoy. And with technology, most people can do the job they want without having to be in a physical office.
The gig economy is growing around the world. And for the companies who haven’t yet gotten on board with hiring freelance talent and independent contractors, it’s time to start. Otherwise, those will be left behind.