This article was written for Autoblog by our friends at Ridester, a terrific resource dedicated to helping rideshare drivers maximize their potential, as well as providing news, information and money-saving promotions for drivers, riders and other participants in the bourgeoning gig economy.
The gig economy is exploding, and is on course to achieve massive growth in the years to come. Record numbers of new companies are coming online each year and new industries are being brought into the gig economy fold.
What used to be an industry that was made up of what is not much more than a glorified taxi service has grown into a behemoth that not only includes taxi-like services, but anything and everything in-between. In addition to ferrying passengers and delivering food, gigs now include dog walking, bartending, babysitting, plumbing, construction, web designing and software coding.
Today we're taking a look at the gig economy as a whole, from the standpoint of those involved, to see what kinds of opportunities and drawbacks there are when choosing this type of work. Let's start with the pros.
Pro: The huge variety of gig companies today
A big pro in favor of working in the gig economy is the sheer number of new companies and industries that fall under the gig umbrella today. Available to workers are all of the ones mentioned above, plus many, many more. It's hard to keep track of them all. For starters, check out our recent article on alternatives to driving for Uber or Lyft.
The ability to work for many different companies is a huge benefit to gig workers because it creates such a variety of work that today almost anyone can find something they like and are good at.
In the early days, opportunities were much more limited. You had to either be willing to work for literally pennies an hour (thank you, Mechanical Turk and Fiverr) or you had to be willing to do something else, like drive your car for cash, which meant you needed to have a car that was available to you for this kind of work.
But today if you enjoy walking dogs, there's a gig for you. If you have a background in restaurant work, there's a gig for you. There are even gigs for doctors and nurses.
Oh, and those cents-per-hour jobs with Mechanical Turk and Fiverr have turned into dollars-per-hour jobs. There are actually some pretty decent paying jobs on both of those platforms now.
Pro: Freedom & flexibility
This is by far and away the number one advantage to gig work.
There are a lot of people today who need flexibility in their work. They can't work the same number of hours each week. Maybe one week they can work 50 hours but the next they can only work five. We all have pretty crazy lives today, and the flexibility of gig work really brings us a freedom to own our own time that we couldn't have had back when pretty much everybody was stuck at a job for 40 hours every single week.
Flexibility is the one thing gig companies really excel at, and it is something they do better than anybody else.
They simply sign up more workers than they can use, knowing that at any given time only a fraction of them will be available. They don't care if you come to work today or even tomorrow because they know someone will. When you decide to work, there will usually be some work for you because the people who were working when you weren't are now taking their time off. It all seems to magically work out.
Pro: Networking for better opportunities
Since gig work isn't known for offering the best-paying opportunities around, many smart people use their gig work to drum up business for whatever else it is they do. For instance, we know of a web designer who was having a hard time getting her business off the ground.
In her spare time, she drove for Uber, but found she was never with her passengers long enough to strike up the kind of relationship she needed in order to pitch her web design work. It just didn't feel right to do in that situation.
One day she started noticing there were a lot of other kinds of gig jobs popping up, so she decided to find a gig where she could more easily find repeat customers. That way, she could not only build a relationship with them, but she could also show them she's trustworthy and reliable.
She got a dog-sitting gig where she would care for people's dogs while they were out of town. She started getting repeat customers because they had found her to be completely honest, trustworthy and dependable. As often happens when you see someone more than a few times, they would eventually ask her what other kinds of work she does.
During visits with clients, she would tell them she was a web designer, and she'd show them some of her work. They already knew she was an honest worker, and now they'd seen that she does excellent web design, so people started referring her to their friends. That's what helped her finally launch her web design business, and it has become her new full-time gig.
As you can see, there's quite a bit to be desired by choosing work in the gig economy, but like anything else in the world, this new economy is not without its downsides too.
Con: Low and inconsistent pay — but there are exceptions
For the most part, gig work is low-paid. A recent Ridester survey, for example, found that Uber drivers make less than $10 per hour after all car expenses are considered.
That's almost minimum wage in many cities. And minimum wage in most cases is much less than what people can actually live on. While many drivers do make more than that, the downside is obvious; making a full-time living on a gig job like this is pretty difficult, after expenses are considered.
Another real problem is that income is very inconsistent. One week you may do great, and the gig companies you work for may keep you very busy. The next week you may not get any work at all. It can be a real roller-coaster ride.
The best way to protect yourself against this is to sign up with as many different gig companies as you
can, and sign up for ones in different industries. For instance, sign up to drive for Uber and also sign up to walk dogs with Wag or host guests with Airbnb. That way your chances of having work from one company or another greatly increases.
The highest paying gig jobs are those in which workers can set their own prices. Airbnb is one of the best gig platforms out today, and a large part of the reason is because hosts set their own prices. Airbnb has no say whatsoever in the prices hosts set. Only local market conditions determine that.
There are other gig companies that let workers set their own prices like Handy.com, Thumbtack, TaskRabbit, as well as freelance gigs with companies such as Upwork, Freelancer, 99Designs and Fiverr. The services where you rent out your car to others, like Hyrecar and Turo, also allow you to set your own price.
There are opportunities out there but you have to keep up with what's going on in the gig marketplace to capitalize upon them.
Con: No health or leave benefits
Almost none of the current crop of gig companies offer any traditional benefits to their independent contractor workers, though, some have started to make rudimentary efforts in that direction. Competition for workers among gig companies is motivating companies to look for more and better ways to attract workers.
Last year, Uber started a new program offering some halfway decent benefits that may not appeal to all its drivers, but they surely will appeal to some. These benefits are offered to the drivers who put in the most time and effort with Uber, which makes sense.
Even so, they are not offering anything like traditional benefits, such as health insurance or paid time off. But they are offering one benefit that could be very beneficial for a lot of drivers: a fully paid college education through Arizona State University's online program. The best part? This benefit is giftable. If the driver can't use it, but his wife or children can, he can give it to one of them.
Another company called Hyr.work places workers in the hospitality industry, such as bars and restaurants. It has come up with a "points" approach ("UPoints" to be exact ) where its workers earn points for each hour they work. Those points can then be used for things such as paid days off or even paid vacation time. Workers can even cash out and get actual cash in exchange for points after the points are worth more than $50.
Like we said, these are rudimentary attempts to offer workers a little something extra, but at least things are moving in the right direction. We expect that things will continue to improve — but it's going to take some time.
Con: No opportunity to move up by working hard
Another important disadvantage to gig work is the lack of opportunity to move up within the organization. A real problem with gig companies is the fact that workers never meet their manager or supervisor. They never have any human contact with the company where a manager might spot some talent in you and decide to help you move up the corporate ladder. You can do an amazing job time and time again, keeping the company's customers completely satisfied, and yet you'll never be promoted to a higher position.
Instead of having human bosses and managers, gig workers' managers are algorithms. Pre-programmed computer code is your boss. It directs you and it assesses you — without any human intuition or insights. An algorithm will never spot your true genius and promote you to something better. That's one reason why these jobs could be better thought of as temporary fillers or as ways to earn needed income until you can find something better.
Con: Life-work balance
If you rely on gig work as your sole source of income, it can become addictive. You can become amazingly competitive with yourself. We've seen people who sometimes work 18-20 hours a day. We know of one Uber driver who frequently slept in his car because he didn't want to miss a single trip.
It can be very difficult sometimes to turn down work. Especially if you've had a slow day, you might be tempted, if calls start coming in late at night, to stay up and take them. And if you're short on money, then it can become very tempting for workers to keep working until they're completely exhausted because they feel the desperate need to make every last dollar.
It also can't go without being mentioned that many of the gig companies, especially in the ride-hail sector, have fine-tuned their algorithms to feed workers' addiction as well as their natural competitive spirit.
This is a concept known as "gamification," and it's surprisingly effective.
If you try to log off Uber or Lyft for instance, you may get a message saying something like, "if you do three more trips, you'll earn a $15 bonus." Those kinds of manipulations can make it very difficult for a lot of people to turn the apps off.
As far as life-work balance goes, there is no paid vacation time and no paid days off. There is no paid sick time. People are really on their own if they need time off, but a lot of people who take these low-paying jobs don't have the luxury of taking any time off because they really need the money they're earning. If you don't work, you simply don't get paid.
We've known workers who put off doctor's appointments because they didn't feel they could take the time out from their money earning activities. As they saw it, a doctor's appointment would just mean several hours off the road, costing them much-needed income.
The gig economy is exploding, and is on course to achieve massive growth in the years to come. Record numbers of new companies are coming online each year and new industries are being brought into the gig economy fold.
What used to be an industry that was made up of what is not much more than a glorified taxi service has grown into a behemoth that not only includes taxi-like services, but anything and everything in-between. In addition to ferrying passengers and delivering food, gigs now include dog walking, bartending, babysitting, plumbing, construction, web designing and software coding.
Today we're taking a look at the gig economy as a whole, from the standpoint of those involved, to see what kinds of opportunities and drawbacks there are when choosing this type of work. Let's start with the pros.
Gig Economy Pros
Pro: The huge variety of gig companies today
A big pro in favor of working in the gig economy is the sheer number of new companies and industries that fall under the gig umbrella today. Available to workers are all of the ones mentioned above, plus many, many more. It's hard to keep track of them all. For starters, check out our recent article on alternatives to driving for Uber or Lyft.
The ability to work for many different companies is a huge benefit to gig workers because it creates such a variety of work that today almost anyone can find something they like and are good at.
In the early days, opportunities were much more limited. You had to either be willing to work for literally pennies an hour (thank you, Mechanical Turk and Fiverr) or you had to be willing to do something else, like drive your car for cash, which meant you needed to have a car that was available to you for this kind of work.
But today if you enjoy walking dogs, there's a gig for you. If you have a background in restaurant work, there's a gig for you. There are even gigs for doctors and nurses.
Oh, and those cents-per-hour jobs with Mechanical Turk and Fiverr have turned into dollars-per-hour jobs. There are actually some pretty decent paying jobs on both of those platforms now.
Pro: Freedom & flexibility
This is by far and away the number one advantage to gig work.
There are a lot of people today who need flexibility in their work. They can't work the same number of hours each week. Maybe one week they can work 50 hours but the next they can only work five. We all have pretty crazy lives today, and the flexibility of gig work really brings us a freedom to own our own time that we couldn't have had back when pretty much everybody was stuck at a job for 40 hours every single week.
Flexibility is the one thing gig companies really excel at, and it is something they do better than anybody else.
They simply sign up more workers than they can use, knowing that at any given time only a fraction of them will be available. They don't care if you come to work today or even tomorrow because they know someone will. When you decide to work, there will usually be some work for you because the people who were working when you weren't are now taking their time off. It all seems to magically work out.
Pro: Networking for better opportunities
Since gig work isn't known for offering the best-paying opportunities around, many smart people use their gig work to drum up business for whatever else it is they do. For instance, we know of a web designer who was having a hard time getting her business off the ground.
In her spare time, she drove for Uber, but found she was never with her passengers long enough to strike up the kind of relationship she needed in order to pitch her web design work. It just didn't feel right to do in that situation.
One day she started noticing there were a lot of other kinds of gig jobs popping up, so she decided to find a gig where she could more easily find repeat customers. That way, she could not only build a relationship with them, but she could also show them she's trustworthy and reliable.
She got a dog-sitting gig where she would care for people's dogs while they were out of town. She started getting repeat customers because they had found her to be completely honest, trustworthy and dependable. As often happens when you see someone more than a few times, they would eventually ask her what other kinds of work she does.
During visits with clients, she would tell them she was a web designer, and she'd show them some of her work. They already knew she was an honest worker, and now they'd seen that she does excellent web design, so people started referring her to their friends. That's what helped her finally launch her web design business, and it has become her new full-time gig.
As you can see, there's quite a bit to be desired by choosing work in the gig economy, but like anything else in the world, this new economy is not without its downsides too.
Gig Economy Cons
Con: Low and inconsistent pay — but there are exceptions
For the most part, gig work is low-paid. A recent Ridester survey, for example, found that Uber drivers make less than $10 per hour after all car expenses are considered.
That's almost minimum wage in many cities. And minimum wage in most cases is much less than what people can actually live on. While many drivers do make more than that, the downside is obvious; making a full-time living on a gig job like this is pretty difficult, after expenses are considered.
Another real problem is that income is very inconsistent. One week you may do great, and the gig companies you work for may keep you very busy. The next week you may not get any work at all. It can be a real roller-coaster ride.
The best way to protect yourself against this is to sign up with as many different gig companies as you
can, and sign up for ones in different industries. For instance, sign up to drive for Uber and also sign up to walk dogs with Wag or host guests with Airbnb. That way your chances of having work from one company or another greatly increases.
The highest paying gig jobs are those in which workers can set their own prices. Airbnb is one of the best gig platforms out today, and a large part of the reason is because hosts set their own prices. Airbnb has no say whatsoever in the prices hosts set. Only local market conditions determine that.
There are other gig companies that let workers set their own prices like Handy.com, Thumbtack, TaskRabbit, as well as freelance gigs with companies such as Upwork, Freelancer, 99Designs and Fiverr. The services where you rent out your car to others, like Hyrecar and Turo, also allow you to set your own price.
There are opportunities out there but you have to keep up with what's going on in the gig marketplace to capitalize upon them.
Con: No health or leave benefits
Almost none of the current crop of gig companies offer any traditional benefits to their independent contractor workers, though, some have started to make rudimentary efforts in that direction. Competition for workers among gig companies is motivating companies to look for more and better ways to attract workers.
Last year, Uber started a new program offering some halfway decent benefits that may not appeal to all its drivers, but they surely will appeal to some. These benefits are offered to the drivers who put in the most time and effort with Uber, which makes sense.
Even so, they are not offering anything like traditional benefits, such as health insurance or paid time off. But they are offering one benefit that could be very beneficial for a lot of drivers: a fully paid college education through Arizona State University's online program. The best part? This benefit is giftable. If the driver can't use it, but his wife or children can, he can give it to one of them.
Another company called Hyr.work places workers in the hospitality industry, such as bars and restaurants. It has come up with a "points" approach ("UPoints" to be exact ) where its workers earn points for each hour they work. Those points can then be used for things such as paid days off or even paid vacation time. Workers can even cash out and get actual cash in exchange for points after the points are worth more than $50.
Like we said, these are rudimentary attempts to offer workers a little something extra, but at least things are moving in the right direction. We expect that things will continue to improve — but it's going to take some time.
Con: No opportunity to move up by working hard
Another important disadvantage to gig work is the lack of opportunity to move up within the organization. A real problem with gig companies is the fact that workers never meet their manager or supervisor. They never have any human contact with the company where a manager might spot some talent in you and decide to help you move up the corporate ladder. You can do an amazing job time and time again, keeping the company's customers completely satisfied, and yet you'll never be promoted to a higher position.
Instead of having human bosses and managers, gig workers' managers are algorithms. Pre-programmed computer code is your boss. It directs you and it assesses you — without any human intuition or insights. An algorithm will never spot your true genius and promote you to something better. That's one reason why these jobs could be better thought of as temporary fillers or as ways to earn needed income until you can find something better.
Con: Life-work balance
If you rely on gig work as your sole source of income, it can become addictive. You can become amazingly competitive with yourself. We've seen people who sometimes work 18-20 hours a day. We know of one Uber driver who frequently slept in his car because he didn't want to miss a single trip.
It can be very difficult sometimes to turn down work. Especially if you've had a slow day, you might be tempted, if calls start coming in late at night, to stay up and take them. And if you're short on money, then it can become very tempting for workers to keep working until they're completely exhausted because they feel the desperate need to make every last dollar.
It also can't go without being mentioned that many of the gig companies, especially in the ride-hail sector, have fine-tuned their algorithms to feed workers' addiction as well as their natural competitive spirit.
This is a concept known as "gamification," and it's surprisingly effective.
If you try to log off Uber or Lyft for instance, you may get a message saying something like, "if you do three more trips, you'll earn a $15 bonus." Those kinds of manipulations can make it very difficult for a lot of people to turn the apps off.
As far as life-work balance goes, there is no paid vacation time and no paid days off. There is no paid sick time. People are really on their own if they need time off, but a lot of people who take these low-paying jobs don't have the luxury of taking any time off because they really need the money they're earning. If you don't work, you simply don't get paid.
We've known workers who put off doctor's appointments because they didn't feel they could take the time out from their money earning activities. As they saw it, a doctor's appointment would just mean several hours off the road, costing them much-needed income.
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