What is a gig economy?
The year is 1194.
Maurice De Bracy,
enemy to the English crown,
is locked in combat
with a mysterious Black Knight.
Suddenly, the Black Knight
gains the upper hand.
He whispers his true identity
in De Bracy’s ear:
King Richard the Lionheart of England.
De Bracy yields.
Later, De Bracy offers to let King Richard
use his army of “Free Lances,”
mercenary soldiers who were free to use
their lances in service
of whoever paid the most.
That’s how it plays out in Sir Walter
Scott’s 1819 novel, “Ivanhoe.”
Scott didn’t coin the term,
but it was probably this use that stuck,
and evolved to describe someone who works
independently of any single company.
That independence seems
to make people happy.
A 2016 survey of freelancers
in six countries
found that those who freelance by choice—
70% of respondents, by the way—
were happier than people
in traditional jobs,
specifically when it came to things
like independence and flexibility
in terms of where and when they work.
In a survey conducted in the US,
half of freelancers said there was
no amount of money
that would convince them to rejoin
the traditional workforce.
At some point in your life—
maybe even now—
you might wonder whether
freelancing is right for you.
You'll need a few things to be successful.
First, you'll need a skill
that's in demand.
This can be as universal as driving a car
to as specialized as neurosurgery,
and it can be in pretty much any field.
The more people who want your skill,
and the fewer people who have it,
the more you can charge for your services.
Next, you’ll need to transform
yourself into an entrepreneur.
Before freelancers can do any work,
they have to find it.
That takes marketing your services,
negotiating contracts,
building a network of satisfied clients,
and a whole set of administrative skills
like project management,
time management, and accounting.
And thirdly, if you can afford it,
it's probably a good idea to budget
for some benefits for yourself
and maybe your family.
Freelancers don’t automatically get perks
that some salaried jobs offer,
like paid vacation or sick leave,
life insurance,
college tuition, or retirement plans.
In countries like the US,
where the government doesn’t provide
healthcare to most people,
freelancers are responsible for that, too.
Freelancing has been around
for a long time;
but digital freelancing platforms like
Uber, Lyft, and Fiverr are pretty new.
They say they’ll connect you with clients
and take care of some
of the entrepreneurial and administrative
stuff so you can focus on the work.
But there are some hidden costs
to consider.
First, your life may not be
as flexible as you think.
For example, if you're a rideshare driver,
you get to choose when to work,
but not how:
the app recommends what route to take,
enforces how you act with the threat
of low customer ratings,
and sets your rate.
Those rates may be so low
that you end up working more
than if you had a salaried full-time job.
Speaking of rates,
it can be hard to figure out exactly
how much money you’ll make.
Earnings vary based on location;
platforms might advertise hourly rates
that don’t factor in expenses,
and large scale data
on actual earnings is sparse.
One of the largest data sets
we have is from Uber.
It contains 740 million trips
by 1.8 million drivers
between 2015 and 2017.
Researchers analyzed these figures
in a 2018 paper
and found that once you deduct Uber's cut
and the cost of business expenses,
drivers’ average earnings dropped from
about $22 an hour to about $12 an hour.
And buying benefits would reduce
that number even more.
And there is a lot of variability
in working conditions
across different gig platforms.
For example, the company 99 in Brazil
operates a rideshare platform
that many people use to deliver packages.
Drivers are matched with shippers,
and 99 takes a cut.
The company’s terms and conditions
hold both the shipper and the driver
liable for anything that could go wrong—
including things like if a package
gets stolen.
If you’re considering joining
the app economy
and don’t want to read all the fine print,
there’s a network of researchers
who publish ratings of platforms
based on five categories
of fair employment.
Digital gig platforms come with drawbacks and may not provide a reliable living wage. But for many around the world who don’t have the luxury of choice and need to make money as soon as possible, like, say, if you just lost your job, the gig economy is the easiest and fastest place to get hired. For this reason, some have called it an “alternative safety net.” So, considering all these factors and many others, should you dip your toes into the gig economy? Or dive in? Ask yourself: how much do you value flexibility or autonomy? Do you prefer to work within an established structure, or to make your own? Are you willing to network to find new clients? Are you organized and self-directed? And perhaps most importantly, how much do you value knowing exactly what you'll earn from week to week?
Digital gig platforms come with drawbacks and may not provide a reliable living wage. But for many around the world who don’t have the luxury of choice and need to make money as soon as possible, like, say, if you just lost your job, the gig economy is the easiest and fastest place to get hired. For this reason, some have called it an “alternative safety net.” So, considering all these factors and many others, should you dip your toes into the gig economy? Or dive in? Ask yourself: how much do you value flexibility or autonomy? Do you prefer to work within an established structure, or to make your own? Are you willing to network to find new clients? Are you organized and self-directed? And perhaps most importantly, how much do you value knowing exactly what you'll earn from week to week?
