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Understanding Who Works In The Growing Gig Economy

February 20, 2019 Sarah Cavill

The gig economy is not a homogeneous group. Income and generational differences may impact how workers perceive and implement the gig economy and the career choices they make. Gender, geography and education also play a part in the development of the gig economy and job growth in certain sectors. As the gig economy grows, the demands and needs of the gig worker will change, presenting possible opportunities for traditional industries like insurance, mortgage and healthcare to connect with this sector of workers, creating partnerships and business relationships.

To truly understand the people who work in the gig economy, it is helpful to understand the digital or online platform economy that drives it. Labor platforms and capital platforms are the two primary digital tools that drive employment for gig economy workers. Labor platforms, like Uber or Handy, match the labor force with jobs. LinkedIn, TaskRabbit, Fiverr and similar contractor aggregate platforms also fall in the labor platform category, although they tend to serve different demographics. Capital platforms, like Airbnb, involve participants in the selling or renting of goods or services, in what are usually single transactions.

The Gig Economy And Who Participates

The reach of the gig economy is significant. According to Forbes, “More than one third (36 percent) of U.S. workers are in the gig economy, which works out to a very large number of approximately 57 million people.”

Growing Gig Economy

Geographically, the West employs more workers in the gig economy. Nevada and San Francisco have the highest rates of participation in the gig economy, particularly in the transportation sector of labor platforms. From Colorado westward, the gig economy is more dominant than the rest of the country. New York and Illinois are also popular for gig workers. Support for the gig economy tends to be centered around major cities.

Generational differences can change perceptions of the gig economy. Many Millennials enjoy working for themselves and are often able to earn similar incomes to full-time employees working 9-to-5. Meanwhile, Generation X may have landed in the gig economy because of changes to the workforce. Gen X workers often own homes or have children. These adult responsibilities can cause feelings of instability for Gen X gig workers at their stage of life. 63% of Gen X workers say they are struggling financially and are earning less than in their prior careers. Conversely, for Baby Boomers, who often have supplemental income from pensions and retirement funds, the gig economy can be a chance to earn pocket money and try something new.

Education level varies. While education level, even postgraduate, can be high among freelancers enjoying the gig economy, education tends to be much lower for temporary workers and other people seeking labor platform jobs. Uber and Lyft are piloting programs offering education benefits to their drivers.

Lower income workers are more reliant on gig economy income. As of 2016, workers who consider themselves unemployed, as opposed to self-employed, were more likely to participate in gig economy labor platforms. These workers were also more dependent on their gig incomes.

Turnover is high in the gig economy. A study by the JPMorgan Chase & Co Institute says, “One in six participants [of the gig economy] in any given month is new, and more than half of participants exit within 12 months.” High turnover has created an industry highly dependent on continuously attracting new recruits.

900,000 people are employed by Uber. Many Uber drivers enjoy the flexibility the gig offers. In fact, more than 50% of drivers drive for less than 10 hours a week, earning what amounts to supplemental income. Interestingly, 27% of Uber drivers are women. This is somewhat unusual, as women in the gig economy typically don’t rely on labor platform jobs for their full salary, and are more commonly found using capital platforms, for part-time or supplementary income.

The Rise Of The Gig Economy And The Potential For Future Partnerships

While there is a lot of satisfaction among gig economy workers, particularly for the flexibility, supplementary income and independence gig careers offer, there is also frustration about lack of benefits. Health insurance, retirement savings and other perks that usually come with 9-to-5 jobs tend to be elusive for gig workers. This deficit may prove to be an asset for marketers to audiences within gig industries, as there may be opportunities to nurture future partnerships with companies like Lyft or contractor aggregates like Task Rabbit. As the gig economy grows, the needs of its workers will as well.

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About the Author

Sarah Cavill

Sarah Cavill is a Marketing Communications Writer at Digital Media Solutions (DMS), the fastest-growing independent digital performance marketing company. DMS helps its clients accelerate growth by deploying diversified and data-driven customer acquisition solutions that deliver scalable, sustainable and measurable marketing results. DMS performance marketing solutions connect the right consumers with the right offers at the right time to achieve the marketing objectives of our clients. DMS is continually innovating to provide new and emerging media and technology solutions that minimize waste and maximize results across the most competitive industries. Since its inception, DMS has demonstrated incredible year-over-year growth which has earned recognition on the Inc. 5000 list in 2014, 2015, 2016, 2017 and 2018.

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