What is a gig worker?
A gig worker, or non-traditional worker, is a worker whose income-earning activities are outside of a traditional, long-term, employer-employee relationship. “Gig” is a slang term for a job that lasts a specified period of time. Musicians commonly use this word to describe performances.
A gig worker can fall under numerous terms: independent contractor, online platform worker, contract firm worker, on-call worker, or temporary worker. They enter into a formal agreement with on-demand companies to provide services to the company or the company’s clients. Common examples of gig work includes writing freelance articles, babysitting, or driving for a food-delivery company.
Table of Contents
- What is a gig worker?
- Gig worker vs. employee
- History of gig work
- Who are gig workers?
- The rise of gig work
- Types of gig work
- Pros and cons of being a gig worker
- How to become a gig worker
The official definition of a gig worker is still being debated. Definitions vary based on different aspects.
- Some define a gig worker by the work arrangement—the relationship between the work and company who pays them. Long-term workers typically earn a salary. Gig workers have work that is temporary or project-based, and their payment varies.
- Others define it by the tax status or legal classification—the difference between employees and independent contractors. Long-term employees receive W-2 forms, may have benefits, and are covered by minimum wage and anti-discrimination laws by their employer. Independent contractors receive 1099 forms, do not receive benefits, and are not covered by any laws.
- Gig work can also be defined by the nature of work—what a worker does on a day-to-day basis and the characteristics of work, such as scheduling, flexibility, or lack of oversight.
What is a gig economy?
A gig economy is a free market system in which temporary positions are common, and organizations hire gig workers for short-term commitments. It is an alternative work arrangement outside of the traditional kind as a primary job. This kind of economy subverts the traditional economy of full-time workers who seldom change job positions. For employers, hiring gig workers is cheaper and more efficient.
The gig economy is made up of a marketplace of workers who earn an income from companies such as Uber, Airbnb, Amazon Flex, and others. This type of economy is more established in cities, but is common nation-wide.
Gig worker vs. employee
The difference between an employee and a gig worker is that an employee is hired by a company and paid by the company, earning an agreed-upon wage or salary. In contrast, a gig worker is hired by a company to complete a certain task or project. This gig worker can complete a project and stop working with the company, or he or she can decide to continue working with the company as long as the company agrees.
For example, a freelance writer may work with a company to write one article about the rise of artificial intelligence, and once the article is published, moves on to a different project with a different company. Or, the freelancer could accept another writing project with the same company if the company so wishes.
An employee receives benefits such as workers’ compensation, health and retirement plans, and have their taxes deducted automatically through a W2 sent by the employer. Gig workers, whether under short or long-term contracts, do not receive benefits, retirement or healthcare structures, and do not have their taxes automatically withheld.
In general, gig work is thought to be less secure and more unstable than long-term employment due to the nature of it.
History of gig work
While there has been a rise in gig work due to the pandemic and advancements in the economy and industry digitization, it’s not an entirely new concept. Although the type of jobs are new, such as food and package delivery, personal services, and logistics, making an income by moving from job to job has been happening since the earlier 1900s.
- 1905: The term “gig” is spawned by jazz club musicians to refer to a live performance job.
- 19040s: World War II prompts the opening of large companies that offer temporary labor (gig work) to businesses needing to fill gaps within the workforce.
- 1995: Craigslist launches. This was the first concept of orchestrated, internet-backed gig work. Craigslist provided local, San Francisco-based online classifieds devoted to jobs, items for sale, gigs, services, housing, and more. Today, Craigslist is available in every state and over 70 countries.
- 1999: Elance, now known as Upwork, launches. It was the first platform that allowed writers to find clients and projects via the internet.
- 2008: Airbnb launches, allowing people to rent their home out to guests and make a living off renting their home out for short periods of time. In 2018, Airbnb was worth $38 billion.
- 2009: Uber launches, allowing people to drive their own vehicles to taxi customers from point A to point B. Lyft joins the ridesharing business in 2012 and becomes a rival to Uber.
- 2014: Employees in the UK are granted the right to request flexible working hours after continuous, full-time employment of 26 weeks.
Who are gig workers?
Gig workers are diverse: They are men and women, young and old, geographically dispersed, and reflect varying racial, ethnic, and socioeconomic groups. There is no one demographic that is exclusive to a gig worker.
Gig workers fall under various labels. Below are some of the most common ways to define a gig worker. Many gig workers can fall into multiple categories.
Independent contractor
An independent contractor is the most common term when describing a gig worker. This is the formal term used by the Internal Revenue Service (IRS) to classify gig workers for income and tax purposes. Independent contractors are not hired as employees of a company. Instead, they work on a project or projects for a set period of time with an understanding that the project will end, and so will the job.
Independent contractors do not have benefits with any one company and are subject to self-employment tax.
Self-employed employee
Gig workers are also referred to as self-employed employees. Self-employed workers do not have an employer-employee relationship with any company and are responsible for tracking their own work and expenses. A self-employed worker is synonymous with an independent contractor, and the IRS states that any independent contractor is self-employed.
1099 worker
As previously mentioned, some categorize gig workers as “1099 employees.” However, using the term “employee” is misleading, as the worker is still an independent contractor. 1099 refers to the Form 1099-MISC that independent contractors file. 1099 workers are not employees of a company and operate as an independent contractor.
Platform worker
A platform worker is a worker who finds work on gig apps or platforms, such as Uber, Lyft, Fiverr, Instacart, Amazon Flex, and others. These workers may have generalized skills and work only on multiple platforms, or have specialized skills, such as writing abilities, and work exclusively on one platform, such as Fiverr.
Freelancer
A freelancer works directly with a company that needs a service and is given a project or goal to complete with a contract outlining payment details and project timelines. They track their own hours, billing, and taxes. This type of gig worker most often refers to those who provides gig work in a specialized area, as they have a unique set of skills.
A freelance worker is also responsible for managing their business and brand. They generally rely on their personal network of companies and individuals to bring in new or recurring business. Many freelancers use platforms such as Upwork and Fiverr to market their unique skills and find clients.
Temporary worker
A temporary worker is a sort of gray-area term. A temporary worker has a defined end date when working with a company. A common example of a temporary worker is a seasonal worker, who may work during the holiday season, but is released from the job after the holidays are over.
Side gig
A side gig is the kind of work a gig worker does that is supplemental or secondary to their primary employment form of income. Both independent workers and full-time employees can have side gigs and be a part of the gig economy. A side gig means it is not the main way a person earns money. They may hold a 9-5 job or have other gigs within the gig economy.
The rise of gig work
The Bureau of Labor Statistics reported in 2017 that 6.9 percent of all U.S. workers—10.9 million people—held contingent jobs, meaning they were independent contractors. Now, 36 percent of U.S. workers—approximately 57 million people—have joined the gig economy as either their primary or secondary job.
The rise of smartphones and information and communication technologies has led to the increased use of on-demand platforms. These platforms have created jobs and forms of employment aside from the traditional structure in terms of accessibility, convenience, and price competitiveness.
As most gig work can be found through cloud-based platforms, gig workers no longer have to rely on being in a specific location to accept a job. This is beneficial for employers, too, as they can select the best individuals for specific projects from a larger pool of candidates because they are not limited by geographic location.
Other factors contributing to the increase in gig work include:
- Financial pressures on businesses, which cause them to adopt a flexible workforce to meet their staffing needs.
- The entrance of the millennial generation into the labor market. Millennials are more likely to change jobs more times throughout their careers, and the gig economy can be seen as an evolution of that trend.
- The increase of entrepreneurship. “Being your own boss” is an idea that is highly sought after as more Americans are wanting less direct management and more job flexibility, even if that means less job security and fewer benefits.
- The impact of COVID-19 and the shift in the work environment as a whole.
The Bureau of Labor Statistics reported in 2017 that 6.9 percent of all U.S. workers—10.9 million people—held contingent jobs, meaning they were independent contractors. Now, 36 percent of U.S. workers—approximately 57 million people—have joined the gig economy as either their primary or secondary job.
Types of gig work
Gig work exists in varying industries that allow for cloud-based, remote workers. Industries and specific gig jobs include:
Computer and IT
- Information Security Engineer
- Network Analyst
- Technology Manager
Writing
- Content Writer in varying subjects
- Resume Writer
- Senior Copywriter
Software development
- DevOps Engineer
- Solutions Architect
- Cloud Developer
Accounting and finance
- Mortgage Representative
- Book Keeper
- Accounting Assistant
Project management
- Project Manager
- Office Manager
- Implementation Project Manager
Administration
- Virtual Assistant
- Design Assistant
- Administrative Assistant
Education
- Substitute Teacher
- ESL Teacher
- Instructional Designer
Art and design
- Musician
- Artist
- Graphic Designer
Construction
- Carpenter
- Painter
- Roofer
Pros and cons of being a gig worker
Pros
Flexibility
Many people become gig workers because of the flexibility it offers. They can work the hours they want and from the location they want. This allows for freedoms a traditional, 9-5 job cannot offer, such as taking a spontaneous vacation or working around family schedules.
Gig workers may also have the ability to set their own pay rates and pay scale configurations, such as an hourly rate or one lump sum payment at the end of a project. However, many gig platforms have set rates, such as Uber and Amazon Flex.
Job variety
Gig workers are not tied to one job. Instead, they can choose from a broad spectrum of projects and clientele, varying in types of people and work. Gig work doesn’t require long-term commitment to a single company, so workers can accept the jobs they want and say no to the jobs that don’t spark their interest.
The variety of jobs also gives gig workers the ability to build their portfolio and resume since they are working with multiple clients instead of a single employer.
Pursue passions
Gig work gives people the ability to pay their bills while also giving them time to pursue their passions. For example, an aspiring novelist can work as a freelance copywriter to support his or her passion.
Cons
Job security
As gig work has a low barrier to entry, this comes with the consequence of having a low barrier to exit. Contract work can dry up quickly, and the client does not have to give notice or a reason why. In some cases, clients won’t hire a freelancer if they have negative reviews on platforms such as Uber or Airbnb. Most sources of freelance work depends on the subjective satisfaction of a client, meaning there is no guarantee of job security. Gig workers can experience long periods of time without work or income, making it difficult to budget expenses.
Lack of benefits
Aside from salary, employer benefits are one of the main reasons workers seek a full-time position. For most gig economy jobs, benefits are not part of the package. Most gig workers figure out their own retirement plan, buy their own healthcare, and do not have paid time off when they go on vacation or come down with the flu.
The freedom of gig work comes with the greater responsibility of managing funds for now and the future.
Burnout and stress
The gig work economy is an always-on workforce, which means a lot of gig workers experience burnout from being overworked and stress from worrying about their next job. Since there is no consistent pay, workers feel the need to do as much work as they are able, which can lead to emotional exhaustion and poor work-life balance.
How to become a gig worker
The barrier to entry in becoming a gig worker is relatively low. Many gig jobs only require workers to be 18 years of age or older, have a valid driver’s license, complete a background check, and have access to technology, such as a mobile phone or computer. Popular gig platforms include:
- Uber
- Lyft
- DoorDash
- Fiverr
- Instacart
- Airbnb
- Amazon Flex
- Etsy
Below are 5 steps you can take to become a successful gig worker.
- Network with professionals: Reach out to personal or professional contacts to ask about any freelance opportunities they may know about or if they have any contacts who would help you find gig work.
- Consider your skills: Examine your range of skills to assess what gig work best suits you. If you’re skilled in communication and customer service, consider being a rideshare driver, dog walker, or call center representative. If you’re skilled in writing and have knowledge about a particular industry, consider being a freelance writer for that industry.
- Join a gig work platform: The pandemic has caused people to stay at home more, meaning they rely on gig workers to bring food or groceries to them. Any food or grocery delivery app, such as those mentioned above or Postmates, Eat Street, or GrubHub are good options when looking for low-barrier-to-entry gig work.
- Update your resume: Ensure your resume showcases your current skills and abilities as a gig worker, such as the ability to simultaneously juggle multiple projects. If possible, include samples of past work you’ve completed. If you’re looking to become a graphic designer, writer, or the like, having a strong portfolio is important to securing new clients.
- Keep a routine: Keeping a routine helps you stay motivated and productive. Since the nature of gig work is less structured, creating a to-do list or scheduling breaks will help you get work done in a timely manner.
