The gig economy inspires feelings of freedom, independence, and flexibility. For some people, however, it has become a vital income stream that comes in where a full-time income falls short. There are both benefits and drawbacks to the gig economy lifestyle. One thing is for sure, gig economy is here to stay.
The gig economy is a real force to be reckoned with. In the U.K., the gig economy is comprised of nearly 5 million workers, having expanded more than twofold since 2016. Other research shows that “10 percent of people [are] now engaged with the gig economy.”
According to a survey by Trades Union Congress, most gig economy workers are young including millennials and Generation Z individuals and may also hold other jobs in addition to the freelance work. It’s a sign that people are struggling to survive on a full-time paycheck. In fact, one in 10 adults looks for some form of side hustle on an app or website such as Amazon or Google Eats, up from about one in 20 people a few short years ago.
A Deloitte poll discovered that more than three-quarters of millennials and generation Z workers prefer freelancing to the security of a full-time job. In India, more than 90 percent of millennials and generation Z workers would rather perform gig-economy work than an office job.
Amazon and Uber Eats Help Man to Buy a Home
BBC spotlights one gig economy worker who was able to save GBP 4,500 toward a GBP 9,000 deposit on a home from his side hustle. He was able to achieve this by driving for both Amazon and Uber Eats. It took him nearly two years to do it, but he might never have been able to buy a home at all were it not for the gig economy jobs. It required an additional three-and-a-half hours per day nearly five days per week. But it got this worker out of the renting cycle and into a home of his own. One of the reasons he chose Amazon and Uber Eats is the frequency of pay, which is weekly, and the ability to make his own hours.
Food delivery giants Uber Eats and Deliveroo have gained so much traction that investors are reportedly pouring millions of dollars into “virtual restaurants” whose doors are literally not open to the public. Instead, these businesses depend entirely on orders that are generated on a mobile app and ultimately completed by food delivery companies.
Taster is a startup that was launched by a Deliveroo alum. It has reportedly attracted $8 million to its coffers and has a presence in London, Paris, and Madrid. Taster specializes in Vietnamese food, poke bowls, and chicken dishes, and is behind a trio of brands—Fry chicken, Mission Saigon, or O Ke Kai. These businesses are essentially virtual restaurants that are 100 percent dedicated to the food-delivery experience such as Uber Eats to fulfill orders.
Gig Economy Downside
While the gig economy has created opportunities for people who might otherwise be left out of the workforce, it has its disadvantages, too. For instance, compensation is tied to production. As a result, if someone becomes injured on the job and they can’t work, it’s highly likely that they won’t be earning any money throughout the recovery process. Adding insult to injury, it could be harder to qualify for a loan because there is no security of a full-time job and salary for the lender to consider, which means the individual becomes too much of a credit risk.
Also, considering that workers in the gig economy are independent contractors or self-employed, they are responsible for paying for their own products and services. For instance, Uber and Amazon won’t pay the fuel costs to keep the vehicle running. And the worker is responsible for earmarking their own taxes, too, as these funds will not be automatically taken out of pay.
Now that it’s clear the gig economy isn’t going anywhere, with more than 4 percent of the UK’s population having participated in the gig economy over the last year, governments are exploring ways to provide more security to these workers.