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Gig Economy Explained: Coronavirus, Services, and the Future

Gig Economy Explained: Coronavirus, Services, and the Future

For millions of people out there, the younger generations, in particular, gigs offer plenty of options — working at your own pace, creating your own schedule, and a solid influx of funds each week. So much so that it almost sounds like an ongoing vacation! 

As of now, more than one-third of the American working population partakes in the gig economy thanks to many companies providing ample opportunities to freelancers.

COVID-19 and Its Impact on the Gig Economy

By an unexpected turn of events (and by this we mean the novel coronavirus pandemic), the gig working model has dramatically increased in size. For instance, in Japan, there is a 513% increase in the number of gig workers since last year. 

But wait, there’s more!

Other countries around the globe are also following in Japan’s footsteps — according to the latest gig economy statistics, countries such as Spain and the UK have seen increases of 329% and 300%, respectively. 

Now, the reasons for this booming trend are quite obvious; people of various skill sets want to make some extra cash on the side to fight the ever-looming economic crisis lurking on the horizon. As an added plus, a lot of the work involved is done online. Meaning, they get to remain safely indoors.

The Distribution of Services

The gig economy branches out in lots of directions, seeing how numerous jobs can be done fully remotely and without the need for long-term contracts. In essence, this is what makes it so appealing for employers — a gig workforce is a lot cheaper to maintain as there is no need for costly office equipment, furniture, and supplies. 

What’s more, employers don’t have to break the bank on commute costs, snacks, healthcare, and the like.

Consequently, we can break down the gig economy sector into four major categories. These are:

Asset-Sharing Services

Most commonly, these come in the form of online platforms that promote the sharing of homes, equipment, vehicles, or other assets for profit. In addition, they offer customer services at a much lower cost since (usually) there are no extra fees or taxes involved. 

Notable brands in this sector include services like Airbnb, TURO, HomeAway, and others.

Transportation-Based Services

These platforms provide customers with transportation services of all kinds, including goods and food delivery, carpooling, ride-sharing, etc.

The gig economy is the perfect medium for these services, as they are mostly project-based (so to speak) and require no formal contract between user and provider but merely an app that sorts everything out.

Most noteworthy platforms of this kind include Uber, DoorDash, BlaBlaCar, Careem, to name a few.

Professional Services

Platforms that include these services look to match freelancers or gig workers with larger businesses to cooperate on projects of different sizes. 

Designers, writers, translators, coders and developers, economists, and many others find employment in this sector of the gig economy. 

As for the online platforms, sites such as UpWork, Guru, Freelancer, etc., are most commonly used by freelancers to find their prospective employers.

HGHM 

Handmade Goods, Household and Miscellaneous Services platforms, or HGHM for short, offer services for people looking to sell their homemade crafts or do various house-related jobs. 

The most popular of these is none other than Etsy, with Airtasker and Care.com closely following suit.

All of these services come together to form the thriving gig economy as we know it today, with the US doing the majority of the legwork — a whopping 44% in total. This should come as no great surprise seeing how the great majority of these companies (Etsy, Uber, Upwork, and Airbnb) originated in the US. 

Predictions for the Future

Needless to say, the future of the gig economy looks bright indeed. 

The year-over-year growth of this budding economy was not only solid but also constant (up until now). As previously mentioned, the ongoing COVID-19 pandemic gave it that “extra kick,” allowing it to reach an all-time high. 

Likewise, the current projections state that the gig economy will grow by a solid 17.4% come 2023, adding up to an incredible gross volume of $455 billion.

In addition, roughly 40% of global organizations revealed that they have concrete plans in place for hiring more gig workers within the next five years. 

Moreover, as the prices of certain assets (cars, apartments, homes, etc.) go up, estimates predict that the asset-sharing sector of the gig economy will also increase, by a whopping 133%, no less. Despite this, transportation-based services still take the cake as the strongest suit of the gig economy. 

Nevertheless, with the travel and accommodation landscape constantly changing, it is more than likely that the asset-sharing sector will eventually float on top.

Lastly, as the gig economy keeps growing, some projections point to the fact that over 60% of Americans will operate independently by the time we reach 2027. 

Bottom Line

With such staggering changes in the jobs sector, chances are we’ll see new legislation in the very near future that will help regulate the gig economy even further and provide an additional boost to this growing sector. Whatever the case, gig work is here to stay.

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