A Meta Analysis of the Industry and COVID-19’s Effect on its Players
Uber, Instacart, Fiverr, and more contribute to the grand Gig Economy. At the end of the day, the term “Gig Worker” is more a style of work rather than a description of the Gig Economy as an industry. Nicole Clark from Trellis Research defines a gig worker as an “individual who gets paid per project, per event, or per gig” (2020). This summarizes the bulk of the job style, but there is still a large range defining the job descriptions. A gig can include anything from a 5-minute paid survey to managing a multi-year construction project, or it could be something in between like a private chef preparing a meal and delivering it to your door. The term “gig worker” is nearly a classification within the industry in which the activity exists.
While it seems that companies like AirBnb have taken over the industry, according to the Bureau of Labor Statistics, only 7% of workers fall into the “contingent/alternative employment arrangements” category (according to the most recent data from 2017). However, experts agree that this category of work will continue to grow as consumers shift to the convenience of online.
As a gig worker, there are certain pros and cons. Advantages include the flexibility of creating your own schedule, the large variety of industries that are best suited for this type of arrangement, and the interesting variety of tasks you’ll do. Disadvantages include the inconsistency of work, the lack of benefits that salaried employees receive, and the self-discipline to motivate yourself to stick to your schedule.
Today, we look at how gig working may change after COVID-19 through an analysis of the current situation of this unique work arrangement and what that means for the future!
The Current Situation
Because the term “gig worker” refers to more of a work style rather than an industry, it is hard to truly estimate the number of people who are employed in this way. According to Small Biz Genius, the numbers seem to be somewhere around 23-30%, and this includes both full-time and part-time workers. This is indeed a large leap from the 7% from the Bureau of Labor Statistics! This contract is likely influenced by the fact there is no official government definition for gig workers. In addition, the 7% from the 2017 Bureau of Labor Statistics study was likely to exponentially increase with the introduction of new, big players using these types of working arrangements. The infographic below from IBIS World outlines the 5 most prevalent industries of the gig economy:
Do any of these surprise you? Let us know in the comments below!
COVID-19’s Effect on the Gig Economy
As we’ve mentioned, this work style is continuing to grow as new technologies and industry disruptors develop. Appjobs created this eye-opening chart below illustrating the rapid growth of this industry.
As reasonably expected, gigs in the home such as house sitting, babysitting, cleaning, and driving have plummeted with the onset of COVID-19. However, other online services like surveys, delivery, and freelance have taken off. By the end of the COVID-19 era, the lower outliers will likely turn up again, and the online services will likely only continue to grow. As companies learn more about customer preferences in the online shopping sphere, they can continue to learn about how to best serve their customers.
Gig Worker Sentiments
AppJobs also created this infographic below outlining the financial and labor effects of COVID-19. We can see that while gig jobs were a side hustle for some, it was a full-time job for many or a dependent source of income. Overall, 70% of gig workers don’t feel supported by their companies, although this number may be increased with COVID-19 as different companies disappointed their employees with their response to the pandemic.
However, this isn’t necessarily a downward spiral. Large players in the gig economy, like Instacart, recently hired 300,000 new employees for deliveries. At the end of the day, the success of these companies, and even this industry, will depend on how it can adapt to technology to deliver speed and convenience. It’s also important to understand geographic barriers - some services can be completed 100% online, while others require a physical component like delivery or installation. These types of factors will also likely play a role post-COVID as companies engineer more contact-free products and services.
New Safety Measures Post-Covid
Especially for companies like Lift or AirBnB, new safety measures are paramount to survival after COVID-19. There will likely be additional cleaning, protection, and contact-free restrictions created to increase safety. There’s also a cost factor that must be considered. As is, Instacart uses a bidding process for its workers; sometimes the bids are so small, workers don’t feel it is worth the gas it will take to complete the transaction. With higher costs to implement new safety measures, it may result in Instacart and other delivery services upping their prices. For workers, this means more time will be spent cleaning and preparing between workers for the arguably same wages.
Gig Workers & CARES
Under traditional unemployment, gig workers can’t file and receive relief checks. However, the CARES act includes gig workers in two of its provisions. The CARES act classifies gig workers as independent contractors who have different benefits than traditional employees. The Pandemic Unemployed Assistance Program was originally based on disaster relief programs and defines gig workers as an “individual who gets paid per project, per event, or per gig” (Clark, 2020). With this definition, it became much easier for gig workers to apply for benefits while COVID-19 prevented them from working. However, there are still scenarios that must describe your situation in order to be eligible. Check out the graphic below:
Snags of CARES
If any of these scenarios apply to you, then you might be a candidate for application. There are a few common snags to be aware of! For one, you must prove that you’re not also eligible for traditional unemployment. This means that if you are a gig worker alongside your full-time position, even if your full-time job doesn’t pay enough to cover your living expenses, you will not qualify. In this case, the best option is to file for traditional unemployment compensation, receive a letter of proof, and then refile for Pandemic Unemployment Assistance. Understandably, this process may take some time and isn’t ideal.
The Future of the Gig Economy
We’re curious to see where the future of the gig economy takes us post-COVID-19. As such a large part of the American economy, we’d love to see more research conducted on how large this percentage truly is, so the government can make more appropriate provisions in case of future disasters. There needs to be a clear definition of what a gig worker is and the role they play in the macroeconomy. As we’re seeing now with the horizon of COVID-19, there may be a shift in the actions companies do to protect their gig employees. There’s also a question of how the gig economy itself will change after COVID-19, specifically for those industries that significantly declined.
Well, there you have it! Our take on the gig economy and its future post-COVID. It’s surprising how such a mysterious percentage of the workforce is the face of so many companies that are industry disruptors. What do you think? We’d love to discuss further, comment below and share!
Fernandez, C. (2019, December 31). Top 5 Gig Economy Sectors Boosted by Holiday Activity. Retrieved June 10, 2020, from https://www.ibisworld.com/industry-insider/analyst-insights/top-5-gig-economy-sectors-boosted-by-holiday-activity.
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