The gig economy is huge, and in fact many people cast aside their old nine-to-five lifestyles to pursue freedom and independence. But what does it mean to work in the gig economy?
The gig economy can be defined as a workforce of people who provide short-term services or goods, usually via an app or a website. Instead of having a permanent job and getting paid a salary, gig workers are paid for individual gigs. Gig workers also call themselves freelancers, contractors, consultants or self-employed.
Examples of gig work include renting out your apartment on Airbnb, transporting passengers for Uber, finding freelance jobs on Upwork, or selling homemade items via Etsy.
In 2024, at least 41 million people in the US did some sort of work in the gig economy.
Did you know…
The term gig economy comes from the music industry. It’s used when an artist books a gig—a one-off appearance—at a venue, and music fans ‘go to a gig’.
What are the advantages of working in the gig economy?
As a gig worker, you get to do or make something you’re passionate about whether that’s jewelry-making, coding, driving, or freelance writing. You can also earn passive income by renting out housing, equipment, or cars.
Doing any kind of gig work gives you a lot of flexibility and freedom: You can set your own schedule, you don’t have to commute to an office, and you can choose to work more in some periods and less in others. you can travel and live wherever there’s internet and you can sell your products and services.
Some people do flexible gig jobs in addition to their regular jobs, just to earn some extra money.
Need to send invoices for your gig jobs?
With Conta, you can invoice for free. Send an unlimited number of invoices, mark invoices as paid, and get an overview of what you’re earning. Tax correctly with these professional invoices that you can make in 2 minutes.
What are the disadvantages of working in the gig economy?
These are some of the downsides to being a gig worker:
- Lack of job security: You won’t know when and where you’ll get your next job, or how much you’ll be earning each month. If you drive for Uber, for example, you might notice a dip during the off-season when there are less people travelling.
- You miss out on health coverage, overtime, paid time off, and other perks that regular employees get. That’s why you should make sure that you have insurance and pension in order.
- You might have to work harder to maintain a good work-life balance. When you don’t have set working hours, it can be difficult to switch off.
- You’re responsible for paying taxes and reporting your income, but it also means you can get tax deductions on all your business expenses.
Harvard Business Review has written an article about how to thrive in the gig economy.
Pro-tip: Choose the right rates
You should make a budget to figure out how much you’ll be paying for insurance, pension, equipment, office space, and other things you need to do your gig work. Make sure to include how much of your fee you’ll have to pay to the app or website where you find gigs. You should take that into account when you set your rates.
Frequently asked questions about gig economy
The gig economy is a term used for any kind of work where people sell one-off goods or short-term services, for example taking freelance gigs via Upwork or delivering food via Uber Eats.
The term gig economy encompasses many different jobs. Here are some common examples:
· Food delivery via DoorDash or Instacart
· Ridesharing via Uber and Lyft
· Renting out a home on AirBnB
· Doing freelance work via Fiverr
· Doing odd jobs via TaskRabbit
Gig comes from the music industry, where it’s used when artists book a one-off appearance—gets a gig—or music fans attends a gig. It’s now become used for any type of one-off or short term job.
There are some disadvantages to gig work, the main one is lack of stability: You might not know when you’ll get your next gig and how much money you’ll be making. However, unlike stable regular jobs, you’ll have a lot of freedom and flexibility—so you just have to work out if this trade-off is worth it for you.
Some other disadvantages of gig work is lack of perks such as sick pay, paid-time off and pension. It’s important to make sure you have both an insurance and a pension-plan that works for you. You also have to report your income and pay the correct amount of taxes, but you can get tax deductions on all your business expenses.
Gig workers usually find jobs via a website or a mobile app. Examples of gig economy platforms include Airbnb, Uber, Care.com, Fiverr and even Etsy. Whatever gig job you want to do, there’s bound to be a platform where you can find gigs.
