The debate over what constitutes a “gig worker” rages on, but that hasn’t stopped the gig economy from exploding.
According to a new study of gig economy trends by daVinci Payments, Inc., some 93 million workers participated in that sector in 2020, an increase of a third over 2019. Gig income was up by the same amount, to $1.6 trillion from $1.2 trillion.
The study defines “gig” as “temporary or part-time work contracted by independent workers for short-term engagements.” DaVinci drew its findings from an online survey to which 1,002 self-described gig participants responded.
The stellar numbers don’t exactly reflect the situation of individual gig workers. According to the study, average annual gig income was just $17,477, with 74% of gig workers making less than $15,000.
Apparently it’s not all about the money, though. Rodney Mason, chief marketing officer with daVinci Payments, says the study’s “big macro ah-ha” was the discovery that gig workers “aren’t just doing it to supplement income, but also because they need convenience in their lives. Gig helps them in ways that other types of occupations can’t.”
A major factor in the dramatic growth of gig work during 2020 was the coronavirus pandemic, which brought financial pain to many workers, forcing them to seek creative alternatives, or at the very least supplements, to full-time work. Still, says Mason, the gig economy was already growing in leaps and bounds in 2019, before the pandemic hit.
The original concept of gig work, as typified by drivers for Uber and Lyft, was an opportunity for already employed workers to make extra money on the side. Sixty-five percent of gig workers in supply chain and logistics roles have full-time jobs, versus 63% of general gig workers. But more than a third of respondents to the daVinci Payments study who are doing supply chain-related jobs said gig work was itself a full-time affair. Many are juggling three or four gig jobs to make up a full work week.
Gig workers tended to be more educated than the general population, the study found, with roughly half having some education beyond high school. Forty-three percent have total household income of $50,000 and over, although most make less than $15,000 a year from gig work alone.
“The more skilled identify with gig work as a way to give them the income they need as well as freedom,” Mason says. “They’re more technologically savvy, and they feel like they’re in control.”
Logistics and supply chain were among the earliest sectors to offer opportunities to the modern-day gig workforce, Uber and Lyft being the prime examples, and job satisfaction in that area appears to be relatively strong. According to the study, 85% of supply-chain gig workers like what they’re doing; that’s 10% more than the average gig worker.
Still, logistics-type gig jobs have recently been the source of intense controversy, especially when it comes to the rideshare business. Some workers argue that they should be treated as full-time employees, making them eligible for healthcare and other benefits. The companies claim that their drivers are independent contractors, and therefore not subject to full-time treatment.
The matter has been taken to court in multiple jurisdictions, with conflicting results. Britain’s Supreme Court recently ruled that a group of Uber drives should be entitled to a minimum wage and vacation time. The government in Spain introduced legislation to make food-delivery drivers employees of the digital platforms for which they work. In California, by contrast, the passage of Proposition 22 dictated that app-based rideshare drivers remain classified as independent contractors.
Further complicating the question is the fuzzy line between the traditional “contractor” — in essence, a freelancer — and a gig worker in the modern sense. In conducting its study, daVinci considered any type of part-time work to be gig work. But the gig label seems to apply more to those who are in control of their hours, and can come and go at will.
The prospects for gig work beyond the pandemic aren’t clear, although continued growth of that type of opportunity seems likely, given employers’ desire to minimize labor costs and the dispensing of benefits. In the supply chain and logistics arena, the daVinci study finds 31% of respondents expecting to gig more in the next year, and 18% expecting to gig less. Deciding factors include the overall state of the economy in coming months, and the availability of traditional full-time jobs. But gig workers also said they would be tempted to continue in that mode if they received same-day pay. Already 67% of supply chain and logistics gig workers have been compensated in that fashion.
Mason sees continued and growing gig opportunities in multiple industries, including warehouses, clerical, cleaning, customer service, restaurants and especially retail. At the same time, there will be continued debate in legislatures and the courts over the rights and status of gig workers. “You’re going to hear more about that,” he says, “but until there are different types of regulation, you’re going to see an acceleration of gig-type work.”
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