What is the Gig Economy?

In England and Wales, 4.4 million people are working for gig economy platforms at least once a week, according to recent research by University of Hertfordshire with fieldwork and data collection by BritainThinks. Their research shows that 3 in 20 (14.7%) working adults surveyed now work via gig economy platforms at least once a week, compared to around 1 in 20 (5.8%) in 2016 and just over 2 in 20 (11.8%) in 2019.

Almost half (48%) of gig workers in the UK also have a full-time job and by the end of 2022, 7.25 million people are expected to work in the gig economy. Gig workers contribute £20bn to the UK economy, which is the same as the aerospace industry. It is predicted that the gig economy could grow to reach a £63.25 billion contribution to the UK economy by 2026.

What is the gig economy?

For many years, musicians and comedians have used the term “gig” to describe the one-off performance appearances that they make. The Gig Economy gets its name from this; each piece of work undertaken by self-employed individuals being similar to an individual “gig” for entertainers. It is a free-market system where those contracting the work and the independent workers providing the work, engage in usually an on-demand, short-term work arrangement.

A working definition of the gig economy was created in consultation with the Department for Business, Energy and Industrial Strategy (BEIS) and the Institute for Employment Studies as, “The gig economy involves the exchange of labour for money between individuals or companies via digital platforms that actively facilitate matching between providers and customers, on a short-term and payment by task basis.”

Workers are usually paid an agreed rate on completion of the projects, tasks or “gigs” instead of being paid for the amount of time that they work, although some gigs may be on an hourly or daily rate basis.

For example, rather than being paid an hourly rate, a gig delivery driver may be paid a set amount per delivery made or for a set number of deliveries per day, or a photographer may be paid a set amount for an afternoon’s photography work at a wedding; in this case the hours to be worked would be stipulated in the contract. Each individual gig or assignment usually accounts for only a part of a gig worker’s total income.

The internet and apps are now key to the gig economy worker, whether they are full-time or part-time workers. Employers or consumers can request services or products and can be matched to a gig worker. The app or internet can help work out payments and charges, ensure that the worker has the right skills, do marketing for the worker, and advertise gig jobs for an individual or a company.

How would you get into the gig economy?

More and more people are turning to the gig economy as a way to make extra cash, or even to earn a living. You can work in the gig economy even if you have a full-time job, as the time needed is usually flexible and, thanks to the internet, a gig worker is able to find work anywhere in the world.

The majority of those working in the gig economy see the income as an extra source of income on top of their regular wage. It is estimated that in the UK, only 10% of gig economy earnings are earned by full-time gig workers.

Gig work varies greatly and includes everything from running errands to programming. Gig economy workers are not employees of their clients, but self-employed independent contract workers, often working for a variety of clients.

Generally, but not in all circumstances, digital platforms are used to match those seeking work with those looking for work to be completed.

Online platforms are those such as:

• Upwork – Upwork began over two decades ago as an international platform helping businesses find flexible workers and connecting talent with flexible work opportunities. It is free for workers to join Upwork. They complete a profile which is vetted and the worker’s identity is verified by Upwork. Once verified you can then search the client postings for work to apply for; you can also create your own project catalogue showcasing the work you can do. You can work on paid hourly or on fixed-price contracts. There is no fee to join; however, the platform charges the freelancers a percentage fee of their earnings.
• Fiverr – Similar to Upwork, Fiverr is the world’s largest marketplace for digital services, although a variety of other business services are advertised on the platform. Freelancers create a profile and portfolio of services offered for clients to place orders for.
• Bark – Another platform that operates in a similar way to Upwork, they state that they support every imaginable service, for both individuals and small businesses.
• PeoplePerHour – PeoplePerHour connects clients to expert freelancers in a variety of business categories who are available to hire by the hour or project. Freelancers complete an online application to join. Once approved, you’ll gain access to projects from their international client community.
• FreeIndex – A business lead platform for freelancers and small businesses to advertise their services and for clients to advertise their requirements.
• MVPMatch – For freelance engineers of all technologies, scrum masters, product designers, designers, and data experts. The platform pre-selects and matches registered freelancers with their clients.
• Etsy – A creatives platform to sell products of work and to accept commissions from clients for bespoke work.
• TaskRabbit – A same-day service platform that instantly connects skilled “Taskers” to help with odd-jobs and errands posted by clients. Examples of tasks include but are not limited to, Home Repairs, General Cleaning, Furniture Assembly, Office Administration, Delivery Service.
• Uber – A popular ride app that provides a freelance driver and car to clients. Drivers need to pass a background check and have a car that meets Uber’s standards. Uber offers drivers the option to set their own schedule, so you can work whatever times fit your lifestyle. Payment depends on when, where, and how long you drive, but the entire process is done through your phone connecting drivers with someone who needs a ride.
• Uber Eats and Deliveroo – Offer flexible work to cycle riders delivering food from restaurants to customers.
• Amazon Flex – With Amazon Flex, you deliver parcels with your own car at times that suit you – you can choose to deliver as little or as often as you like. All you need is a smartphone, a valid UK driver’s licence and to be 18 or older.
• Airbnb – Rather than hiring out your services, with Airbnb you hire out a room or entire property through the renting platform for a fee. Each rental is classified as a gig rental and the app connects hosts directly with those looking for a place to stay.

A YouGov survey identified the most popular gig platforms used in the UK as:

• 18% Uber.
• 12% Deliveroo.
• 12% PeoplePerHour.
• 10% Fiverr.
• 9% Upwork.
• 8% TaskRabbit.
• 8% Amazon Flex.

Some gig workers, however, advertise their services themselves rather than registering with a gig platform. This can be done through leafleting, via their own website, displaying cards in shop windows or by word of mouth and recommendations.

Gig economy jobs and industries

The gig economy spans virtually every industry, with businesses using gig workers in most sectors, including but not limited to:

• The public sector including education, health and care services.
• Local and central government.
• Charities.
• Manufacturing.
• Construction.
• Technology.
• Financial services.
• Hair and beauty services.
• Catering.
• Information services.
• Business consultancy services.
• Transportation.
• Leisure.
• Hospitality.
• SMEs.
• Private individuals.

People who work in the gig economy are often classified as:

• Freelancers.
• Consultants.
• Temps.
• Contractors.
• Sole traders.

Gig economy workers provide a range of talents and services to both business clients and to the general public.

Providing courier and delivery services is the most common type of gig economy activity; other activities include but are not limited to:

• IT – Consultants, web designers, technicians, trainers, CAD, data security, developers, network administration.
• Finance – Book keepers, accountants, financial consultants, data entry, invoicing.
• HR – Consultants, advisers, recruiters, policy writers, payroll, trainers, e-learning authors, resume and CV writers.
• Project management – Scrum masters.
• Writers – Bloggers, article writers, ghost writers, editors, grant writers, website content, proofreading, creative writing, business plan writers, report writers.
• Tutors – Subject specialists, home-schooling, personal trainers, business coach, life coach.
• Design and creatives – Logo and brand design, product design or development, artwork, game design, graphic design, photography, video and animation.
• Translators – General, legal, medical, technical.
• Entertainers – Music production, musicians, entertainers.
• Customer service – Call handlers, e-mailers.
• Legal services – Employment law, contracts, immigration law, financial and tax law, corporate law.
• Marketing – E-mail marketing, Instagram marketing, direct marketing, marketing campaigns, SEO and SEM strategies, lead generation, social media and PR services, market research.
• Researchers – Market research, data research, genealogy research.
• Administration – Entry level, routine or administrative tasks, virtual assistants, research functions.
• Caterers – Chefs, cooks, wating staff, bar staff, event caterers.
• Drivers – Removals, taxi, hauliers.
• Construction and maintenance – Gardeners, building, plumbers, bricklayers, electricians, gas workers, handyperson, flatpack construction.
• General skills – Errand running, cleaning, dog walking, crafting, rental inventories, surveys, leaflet distribution, security.

People who do gig work can be found in every category of employment and income status, with the vast majority of these people using the gig work to top up their income from other sources. According to research carried out for the Trades Union Congress (TUC), gig workers can be found in all age groups but are more likely to be in the youngest age groups.

• 31.5% aged 16–24.
• 28.7% aged 25–34.
• 16.4% aged 35–44.
• 13.4% aged 45–54.
• 5.7% aged 55–64.
• 4.3% aged 65–75.

Gig economy work is quite evenly spread throughout the UK, with the strongest concentration being in Greater London.

Why people choose to work in the gig economy

Some of the reasons why more workers are turning to this work model include:

• They want the flexibility to meet their financial targets as they see fit, or for additional income.
• A way of gaining experience and transitioning into new careers.
• Gig workers can access higher-paying work or more interesting work anywhere in the world.
• Ability to choose their work schedules with minimal supervision.
• Recessions and the COVID pandemic may have forced full-time employees to switch to gig work in desperation.

What impacts the gig economy?

In the aftermath of the 2008 financial crisis, many people were either unemployed or underemployed. As a result, the demand for temporary work grew exponentially as workers were looking for ways to replace or supplement their income.

Many people ended up holding several part-time or freelance jobs simultaneously, or combining a fixed contract job with a flexible job on the side. As more people became familiar with the gig economy, gig work became normalised on a larger scale.

During the COVID-19 pandemic, gig economy workers have become essential for providing a sense of normality and keeping services running that otherwise would not have survived the crisis. According to government statistics approximately 1.37 million workers were added to the UK gig economy from 2019 to the end of 2021 and estimates place another 1.18 million workers in the gig economy by the end of 2022.

The pandemic saw deliveries and online gig work increase by 7%. With food deliveries and the digitisation of work, and work-from-home, seeing a boom due to the pandemic, such a shift was to be expected.

In many ways, the gig economy reflects and facilitates the desire of millennial generation workers for greater flexibility in balancing their work-life demands, often changing jobs several times during their lifetimes.

The growing use and convenience of the internet and apps for gaining access to these forms of work and income, and the general instability of the UK economy following Brexit and COVID, appears to be increasing the availability of gig work and the use of gig workers by a variety of businesses and the general public. The forecasts are that jobs in the gig economy will continue to rise as both clients and workers like the flexibility it provides.

The benefits of the gig economy

For workers:

• Independence and flexibility – These are the two aspects that most people working in the gig economy highlight as the reason they choose to do gig work. The gig economy provides flexibility regarding when and how often you work, as well as giving you choice over your assignments and clients you work for. This can be ideal for anyone who needs to work around personal commitments or other jobs.
• An established advertising platform – Gig workers typically get most of their assignments through online platforms, which means a third party has already done the groundwork and gained an audience client base. Traditional contractors have to advertise their services and generate interest through word of mouth, whereas gig workers can plug straight into an app or website and reach potential clients, many of whom already use the platform as a source for workers.
• Opportunity to develop an interest in a career – People who enjoy writing, designing or software development in their spare time can hone their skills and see whether there is a market for their capabilities without having to give up their day jobs.
• Variety of work – Gig workers often wind up doing a much wider variety of tasks than employees that work full-time for one single company.
• Earn additional income – Workers can use their spare time to earn additional income without the long-term commitment of taking on a second job.

For clients:

• Cost savings – In a gig economy, organisations can reduce their costs with both time and money. They only pay for the work completed, as there are no additional costs such as recruitment costs, employer’s NIC, pension contributions, sick, holiday and parental leave pay. There is usually no requirement to provide workspace and other work equipment as the gig worker uses their own venue and equipment. All this makes it easier for SMEs to stay competitive.
• Flexibility – Clients can commission gig workers as and when required for a particular task or project without the commitment of taking the worker onto their payroll. There is greater ease filling gaps in expertise when the workload is insufficient to justify a full-time position.
• Access to specific skills – Sometimes, a client needs an expert in an area for one or two projects and not on a regular basis. Being able to hire gig workers as they need them means the client can look for exactly what they need at that moment.
• Huge talent pool – Because gig platforms register workers globally, clients have a wider pool of talent to choose from.
• 24/7 service – Because clients have the option to hire workers across the globe, they can choose to hire from other time zones to provide 24/7 services for their business and customers.

Disadvantages of the gig economy

For workers:

• Lack of employment rights – Workers in the gig economy don’t have fixed employment contracts, they are not guaranteed the minimum wage nor do they have the employment rights of, for example, sick leave, holiday pay, redundancy pay, pensions and parental leave as their employment status is self-employed.
• Inconsistent employment – Many businesses and online platforms can provide workers with a steady stream of assignments, but anyone operating in the gig economy must be prepared for project lulls. For many people, with no fixed income, the gig economy can be very stressful. If it is difficult to find work, the worker might constantly be searching for work instead of spending that time earning. Even if the worker has repeated work with a client, that work can cease without any notice if the client has no further requirements. It is harder for people with insecure work and income to get mortgages and loans, and therefore to plan for the future.
• Loneliness – Being an independent worker, depending on the type of job, can be very lonely. For example, someone doing pick-ups and deliveries across long distances and spending all those hours alone, or designers, developers or copywriters working on their laptop from home can spend a whole week working at home without real-life interactions, only messages with their client via the gig platform.
• Discipline – Workers in the gig economy need to be incredibly disciplined to keep to schedules and not be distracted. Most are working to deadlines but work completely unsupervised, so self-motivation needs to be high.
• Low rates of pay – Although gig workers have the option to accept or refuse work if the pay rate doesn’t suit, clients have a vast talent pool across the world to choose from and workers from many countries work for lower rates of pay than those in the UK, so the competition can be fierce, causing UK workers to lower their pay expectations to secure work.
• Difficulties returning to permanent employment – It can be challenging for gig workers to gain employment after they leave the gig economy as they may not have up-skilled and may have difficulties getting references.

For clients:

• Lack of loyalty – Gig workers may only be working with a client for a short time and may not be available for future projects as they go where the work is.
• Different kind of employee relationship – Gig workers are not employees and require a different kind of management. It is a client / service provider relationship.
• Availability and conflicting deadlines – Some gig workers take on too much work and have competing priorities with multiple clients / companies.
• Under-skilled workers – Due to the remote hiring processes involved, gig workers sometimes do skilled jobs with little or no training or prior experience.

Final thoughts

Gig economy work, whether you love it or hate it, is here to stay. For many it provides freedom to choose how they earn, when and where they work, and how much time they spend on their own interests.

For others who rely on it, the need to constantly search for work with no guaranteed income and no legal framework to protect them against exploitation and unfair treatment, is not so empowering. Anyone who chooses to work in the gig economy should weigh up the pro and cons against their own particular circumstances.