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What is the Gig Economy: Definition, Types of Gig Work, Income & More

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What is the gig economy? What happened to having a regular 9 to 5 job?

Suddenly, everyone is talking about gigs and tasks, and people are no longer interested in the traditional career path.

But with the increasing number of workers in this market, you must understand what it means, the ins and outs of this economy, and how to become successful if you choose to become a gig worker.

Our article will discuss the gig model in detail, so let’s dive in.

Key Takeaways

  • Gig Economy Basics: A market of short-term, freelance tasks instead of permanent jobs, focusing on outsourcing.
  • Gig Work: Temporary, varied tasks for independent contractors across multiple industries.
  • Gig vs. Job: Gigs are temporary, pay-per-task assignments; jobs offer stable, salaried employment.
  • Finding & Earning: Platforms like Uber, Lyft, Upwork, and Fiverr connect workers to gigs; payment varies, typically upon task completion.

What is the Gig Economy?

This is a labor market where tasks are assigned to freelancers and part-time workers instead of permanent workers. It’s a free market where organizations consider outsourcing tasks to more experienced private contractors and contingent workers. It also involves cost-savings when different tasks are assigned to freelancers.

What is Gig Work?

Gig work is part-time work assigned to independent contractors. Organizations can have work done for a cheaper cost while collaborating with the biggest names in the industry.

This type of work is common in several industries. It can range from delivering food to designing websites. Most gig work is short-term, but some tasks can last for several months or even years. In this case, they might be divided into milestones.

What is the Difference Between a Gig and a Job?

A gig refers to short-term or temporary work. As a freelancer or independent contractor, you’ll be assigned a particular task and get paid when the task is done. After that, you’ll no longer work with the organization until a new task is needed. In this case, your pay might differ.

When you have a job, you work permanently with the company that hired you. Regardless of the tasks assigned, you’ll receive a monthly salary, which might be subject to an annual increase.

What is a Gig Worker?

This is someone who does freelance or independent work for multiple clients. As a gig worker, you can work with different clients simultaneously, delivering work according to your time and availability.

All independent workers, self-employed workers, freelancers, part-time hires, and project-based workers are considered gig workers. These people work according to a schedule they set based on their availability. What makes a person a gig worker is their control over their work-life balance.

They either accept gigs on different platforms and gig-focused companies or announce their services so employers can hire them. Employers set a pay for each gig or task, and you, as a freelancer, will accept or reject it.

Once an agreement is reached, you can start a contract to finish this particular task. Maintaining good work ethics and professional relationships with various employers and clients will prompt them to consider you for future projects and increase your ratings, subsequently qualifying you for more gigs.  

Types of Gig Work Available to Gig Workers

vector graphic showing an illustration of what is a gig worker

Everything that can be outsourced can be part of the gig market. People hire freelancers to do gig work to save time and money. They can also hire them to guarantee that they have access to the best experience and talents in the industry.

Here are some examples of the gig economy.

  • Graphic design
  • Web design and web development
  • Tutoring
  • Rideshare and food delivery drives
  • Business consultation
  • Data entry
  • Content writing and proofreading
  • Translation
  • Transcription
  • Dog-walking services
  • Social media management
  • Voiceover
  • Video editing
  • Personal shopping
  • Cleaning services
  • Photography and Videography
  • Copywriting
  • Hosting and lodging services
  • Handyman work and maintenance

Where are the Best Places to Find Gigs?

There are different platforms and companies where you can find gigs if you wish to work in the gig market. These platforms connect employers with potential employees and then engage in remote conversations.

The client might interview several freelancers until they find the best fit for the job. Once a freelancer is hired, they can start working on the task. The client will review the task and pay upon completion, and then the contract will end. The contract can also involve multiple tasks and milestones.

Several companies like Uber and Lyft hire people for gigs. You can also check local newspapers and Craigslist for available gigs.

Here are some different platforms where you can find gig work.

1. Gigworker.com

Gigworker.com is an excellent place to learn about the gig economy and find gigs you can do for fair pay. The website allows you to browse over 250 gigs by type and industry. You can search for hobbies you can monetize and learn about the basics of starting a side hustle.

If you’re a beginner or want to learn about the basics of gig work, you can check video courses, information about increasing your productivity, and tips to start your independent work. The website also offers discounts and promotions from gig workers.

2. Upwork

Upwork is an extensive website for freelance and project-based work. Employers post jobs or tasks, and freelancers create profiles and apply for these jobs.

When you find a job that interests you, you write a cover letter explaining why you’re the perfect fit and determine your expected salary.

The employer will browse different offers, run interviews, and discuss payments. Projects can either be milestone-based or paid according to an hourly rate. Once the client and the freelancer agree, they can start a contract.

3. Fiverr

This website works differently. As a freelancer, you create a web page or profile listing your experience, past jobs, expected salary, and why any client should consider you.

When a client is looking for a freelancer to do a task, they browse available employees using tags and review their profiles to pick the most suitable one for their project.

4. Lyft

Lyft is a website that connects people with available drivers. You request a ride, and available drivers can either accept or deny your request. The pay is determined, and you can pay using different platforms or in cash once you reach your destination.

As a gig worker or driver, Lyft allows you to gain money from the vehicle you already own. You can decide when and where to accept rides, so you won’t go out of your way to make money.

What are the Benefits of the Gig Economy?

The gig economy provides employers and workers with multiple benefits. Employers can find workers with specific talents and experience that might not be available within their organization. If their workflow isn’t consistent, they won’t incur unnecessary expenses, as they can hire people based on their work needs.

Clients also have a large pool of talent to choose from, so they can hire experts without committing to their high salaries. Cost-savings aren’t just restricted to salaries because employers won’t have to worry about retirement plans, employee benefit packages, and paid vacations.

This type of work offers multiple advantages to independent workers as well. Flexibility is one of the main benefits of becoming an independent gig worker.

Gig work will give you more control over your life. You can pick tasks and projects based on your preferences, and this type of independence allows you to work from home or while doing something else. It’s a suitable type of work to explore if you’re looking for a side hustle or a part-time job.

How Do Gig Workers Get Paid?

Based on the platform and contract between the client and the freelancer, the employer can directly pay the worker upon completing the task. Several payment gateways like PayPal, Apple Pay, Venmo, and Pioneer can be used for these financial transactions.

If work is assigned through a platform, they will pay through its payment center. This secures the payment, although a small fee is deducted from the pay.

How Much Do Gig Workers Get Paid?

This depends on several factors, like the workers’ past experience and projects, the nature of the work assigned, and how much time it takes to be completed. On average, gig workers make about $60,271 annually, but some can make more than $200,000 annually.

Do Gig Workers Pay Taxes?

Gig work income is taxable, and you must report it, whether paid in cash or virtual currency. Even if your income isn’t reported on 1099-K or 1099-NEC forms, you should report it, or you’ll get into trouble.

What is the Future of the Gig Economy?

The gig economy is expected to grow in the future. More employers and workers find this market more alluring than the regular job market, thanks to the benefits it offers.

77% of gig workers report being satisfied with their work, compared to 70% of satisfied non-gig workers. Moreover, more than 80% of freelancers believe that this economy is expected to grow in the future.

What is Prop 22?

California Proposition 22 or Prop 22, also known as the App-Based Drivers as Contractors and Labor Policies Initiative, redefines app-based transportation and delivery drivers as independent contractors. It sets different policies for workers who work for several companies like DoorDash, Uber, and Lyft.

This law was controversial because a previous law allowed delivery drivers and rideshare drivers to be classified as employees. It provided them with certain benefits if they met certain work hours and other criteria since the state work laws don’t cover these workers.

header image for prop 22 post on gigworker.com

Prop 22 protected gig workers’ choice to be independent workers but didn’t require companies to offer them employee benefits. This indirectly benefited them, as companies would have reduced their workforce to save on costs. Moreover, these companies could still offer their services at reasonable prices.

On the downside, Prop 22 doesn’t guarantee workers’ rights to a minimum wage. It also eliminates the possibility of union organization and protection for these gig workers.

How Does Prop 22 Impact the Future of the Gig Economy?

For companies that offer delivery and rideshare services, this law can result in a significant loss of jobs. Many people would reconsider these gigs because companies could easily classify their workers as contractors and deny them the benefits offered to employees.

Is the Gig Economy Worth It?

The gig economy is worth it, thanks to the benefits it offers. With different companies considering its cost-saving benefits and hiring the best talents, this can be the route to decreasing operational costs while achieving the best ROI.

This type of work provides flexibility and independence for gig workers, as you can be your own boss. It will work for you if you want to work on different projects or have a side hustle.

Finding gigs is easy if you have the talent for the task required. You should also be willing to negotiate your pay and explore different options to find one that suits your lifestyle.

Frequently Asked Questions

What is the Most Popular Gig in the Gig Economy?

The most popular gigs are rideshare and food delivery drives, dog-walking services, freelance writing gigs, graphic design, and virtual assistant services. You can check one of these gigs if you want to increase your income.

Is the Gig Economy a GDP?

The gig economy contributes to 5.7% of the US GDP. There are currently 59 million Americans who work as gig workers, representing about 34% of the US workforce. These numbers are expected to increase in the future.

Why Do They Call it the Gig Economy?

The definition of a gig is borrowed from the music industry because tasks only last for a limited time, unlike regular jobs. Like a musician, a freelancer will go from one gig to another, usually paid after work.

Wrapping Up

Gig work is the future for employers who wish to cut costs and workers who want more control over their work-life balance. As a gig worker, you can find gigs or projects on various platforms and gig economy companies.  

The gig economy is worth a try, whether you’re still entering the labor market or looking for a side hustle. You can check available projects and choose one based on your availability.

Tell us about your experience in the gig market, and contact us if you have any questions.

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