Gig Economy

Gig economy summary:

• The gig economy is a portion of the labor market in which people perform short-term, part-time projects or tasks as independent contractors, rather than working as traditional full-time employees. 

• Gig workers may benefit from greater independence and flexibility. Some of the downsides could include little job security, the absence of benefits, and income instability.

• Many people use mobile apps and online marketplaces to find gig economy work.

Gig economy definition and meaning

The gig economy is a description for the part of the labor market in which individuals and companies hire independent contractors, freelancers, and temporary workers for short-term, project-based tasks rather than as traditional full-time employees. 

Gig workers aren't employees, so they generally have to pay their own federal and state taxes. Typically, they don't receive benefits and may not have stable income or work opportunities.

Key concept: The gig economy involves workers performing short-term, temporary, freelance, or project-based tasks in exchange for money. 

More on gig economy

Some common examples of gig economy jobs or gigs are: 

• Dog walking or pet-sitting services

• Delivering restaurant or grocery orders

• Driving for a rideshare company 

• Working as a creative freelancer

• Selling crafts or other handmade goods 

Gig economy: a comprehensive overview

The gig economy is a labor market trend in which people perform temporary, freelance, or contract work. Some people do gig work occasionally to earn extra income. You may also decide to do only gig work and use it as your sole source of income.

Some people do gig work as a side hustle, while others make a full-time career out of the work they do in the gig economy.

Many gig economy workers use online platforms or apps to find and book gigs. Companies managing these platforms keep a portion of gig worker earnings.

Examples include:

• Uber

• Lyft

• Taskrabbit

• Rover

• Thumbtack

• Care.com

• DoorDash

• Upwork

• Instacart 

Some freelancers and gig workers find work by directly reaching out to potential clients and businesses. This approach requires more time and effort, but allows gig workers to set their own rates and keep more of what they earn. 

Many workers use the gig economy because it often offers more flexibility. Gig workers can typically work on their own terms and schedule. They may also qualify for tax deductions for supplies and equipment they use for work. Gig work has some downsides, including a lack of job security, no employee benefits, and limited worker protections. 

Real-life example of gig economy work 

Tanner wants to earn money after he graduates from college, but he'd like a flexible schedule so he can coach high school football part-time. He decides that driving for Lyft 20 hours a week would be ideal. This would give him some cash and let him set his own hours, letting him work at the high school 10 hours a week.