What is the Gig Economy?

Image from Senator Mark Warner

Many of us have used Uber or Lyft to get a ride to the airport or home after a night out. We get packages delivered from Amazon and food from our favorite restaurants via Uber Eats, DoorDash, GrubHub, and more. All of these apps are part of the gig economy.

The gig economy includes three important parts:

  • workers being paid by gig or task, rather than a salary or hourly wage
  • consumers who are looking for a specific service, like delivery from a restaurant that doesn’t employ delivery drivers
  • companies that connect workers and consumers using an app or website

The gig economy appeals to people from all walks of life, including workers who value autonomy and control, those balancing family life, between jobs, or just looking for a little extra money on the side. Workers are considered independent contractors and not directly employed by the companies offering their services. This allows workers to control their own schedule, but also means that benefits and steady wages are not guaranteed.

Some popular gig economy apps include:

  • Uber and Lyft allow users to grab a ride from anywhere using these apps! Drivers are able to use their own personal cars and choose when they pick up riders.
  • DoorDash, Postmates, Uber Eats, GrubHub, and more connect hungry people with food from their favorite restaurants – even if those eateries don’t offer delivery. Users are able to place and pay for their order through their preferred app and a driver will pick up and deliver the food to their door. Restaurants must choose to participate with these apps, but can save money by outsourcing their delivery services.
  • Instacart allows you to order your groceries from an app. Workers can deliver your grocery order to your door or simply gather items in the store to be picked up by customers or delivered by others.
  • Fiverr allows freelancers to connect with companies and customers in need of their services. Freelancers are able to set their own prices.
  • TaskRabbit is the modern version of the neighborhood handyman, connecting workers and customers for jobs in cleaning, moving, delivery, and handyman services. TaskRabbit even partners with Ikea to help customers construct furniture!
  • Rover connects pet owners with pet care services, including pet sitting, dog walking, and boarding. Caretakers are able to set the days and times they are available, as well as their own prices.
  • Amazon Flex is how many Amazon packages are delivered to your door! Drivers are able to set their own schedule.

There are many pros and cons to the growth of the gig economy. Many of these services may undercut existing businesses, including taxi companies. Companies are able to save money by hiring or outsourcing deliveries to independent contractors who do not receive benefits. Workers may see increased maintenance costs if using their own vehicles. Despite these concerns, the convenience and flexibility that the gig economy offers makes it appealing to workers and consumers alike.

For more details on the economic effects on the gig economy, check out this survey summary from BMO Wealth Management. You can also check out this month’s Library Binary podcast at heightslibrary.org or through your favorite podcast app.

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