Throughout human history, the nature of what constitutes work and how work is done has constantly evolved, but things have dramatically changed in recent years. Advances in technology, changing lifestyles, outsourcing, COVID, crime, and a variety of other factors have all contributed to the rise of what is now known as the “gig economy”. The emergence of the gig economy has presented a plethora of challenges and opportunities for workers, companies, and consumers, and in the future, the most successful companies involved in the gig economy will be those that understand how this new way of working can benefit their consumers and workers/contractors.

The basics of modern economics aren’t too complicated. Successful economies need high employment because employment creates GDP through savings, spending, investments, etc. Until about 40 years ago most employment in the United States was done through traditional outlets such as manufacturing, but by the 1980s that began evolving into retail and service, which in turn evolved into the gig economy in the last 15 years.

The simplest definition of gig workers, who are those employed in the gig economy, are self-employed contractors. Therefore, the gig economy is made up of independent workers from a diverse range of fields, who provide on-demand services or products to consumers. Gig workers are paid for their services hourly, by task, or on retainer, according to contracts they arrange with the consumer. Gig workers can work in a number of different sectors and can be drivers, home renters, artists, writers, etc.

The reality is that the most successful companies across many industries will be those that realize how much consumers love the gig economy, primarily because companies connect the worker/contractor directly to the consumer via the internet and app-based technology platforms. So let’s take a look at the evolution of the gig economy, some brands that have successfully utilized it, and what the future holds for workers, companies, and consumers.

The evolution of work

Gig work is not particularly new to the world, nor is it a concept that is very revolutionary. It’s impossible to say for sure when gig work truly started, but there’s a good chance people in the Paleolithic Era were doing favors for more food, furs, or other items. In more recent times, gig work has often been in the form of a part-time or “side job”, such as mowing lawns, babysitting, and delivering newspapers. Gig work became much more common, though, during the Great Depression, when working multiple, gig jobs became a standard form of survival.

After World War II, most people returned to their factory jobs, offices, or farm work, but the genie in the bottle had been released and the early form of the gig economy was taking shape. It wasn’t until the invention of the home computer, the internet, and smartphone in the last 15 to 20 years that the gig economy revolution really took hold. And as different online platforms connected consumers with gig workers, the COVID-19 epidemic happened, proving to be a boon for some stay-at-home workers, while a curse for delivery drivers and others. Ultimately, COVID and other recent events have proven just how important the gig economy is and how many opportunities it presents for consumers and workers.

The ups and downs of the gig economy

There’s no doubt that the gig economy has become a vital part of the larger world economy. It’s estimated that about 8% of all Americans have earned money doing online gig work at some point in their lives, and when combined with people who have sold items on platforms such as Craigslist and eBay, about 24% of Americans have earned money on online platforms. The ubiquitous nature of gig work has offered a number of advantages and disadvantages for workers, companies, and consumers that should be considered.

For workers, freedom is the first and foremost advantage. Many gig workers can work at home, or anywhere for that matter depending on the work. Gig workers can also often determine when they work, how long they work at a time, and depending on their online reputations, what their pay rate is.

As great as some of these advantages are for gig workers, consumers can also count a number of advantages of taking part in the gig economy. The gig economy has made it easier for consumers to find the workers they need in a low-stress, user-friendly process. The freelancer and gig platforms offer a wide range of workers, whose profiles are ranked, often with consumer feedback, allowing the consumers to make the right choice. Most platforms also offer escrow services so unethical freelancers can’t make off with the money before the job is done and unethical clients can’t get a service without paying.

The majority of the disadvantages in the gig economy fall at the feet of the workers. Gig work generally pays less than similar, full-time work and insurance and benefits are usually nonexistent. Along those lines, there’s also no promise of work in the gig economy. When COVID hit, freelance writers and editors found plenty of work from people who were suddenly changing professions and in need of getting their resumes, CVs, and cover letters updated. There was also work for those with academic backgrounds, as others hit by COVID layoffs decided to go back to school, but the delivery drivers soon found that the lack of promise of work could be devastating.

At first glance, it would appear that all of these disadvantages gig workers face are inherent advantages for gig platform companies, but this isn’t always the case. As we’ll see later, the platforms where workers make the most money tend to be the ones dominating their sectors, so the old adage, “you get what you pay for”, rings true in the gig economy as it does elsewhere.

By far, the biggest winners in the gig economy are the consumers. The gig economy has given the consumer more choices at a discount, and if one knows how to navigate the platforms then one doesn’t have to sacrifice quality either. Ultimately, there’s no downside for the consumer in the gig economy.

The future of the gig economy

As the gig economy continues to grow and evolve, how companies, in particular HR departments, see their employees, or perhaps “contractors” is a better term, will be important. Although the modern employment system is still geared primarily toward permanent, full-time employees, HR departments will have to adjust their definition of what an employee is in order to attract and retain the best talent. An aspect of retaining top talent will hinge on how well gig and part-time contractors are paid. As noted above, the top gig platforms don’t necessarily pay the least, which is apparent in some of the most successful gig economy companies.

The best-known gig economy platforms, based on consumer use, are the rideshare platforms Uber and Lyft. Founded in 2009, Uber is the older of the two, holds a 71% share of the market, and has recently entered into food delivery, capturing 27% of that market. Lyft began in 2012 and has since captured the remainder of the rideshare market share with 29%. The success of both brands is tied to the quality of the services they provide to the consumer and the pay of the drivers.

Other notable, successful gig platforms include the home rental services Airbnb and Vrbo; the contractor service, Angie’s List; and the homecare provider, Care.com. Perhaps the most influential of all the gig platform types are those that offer the services of freelance writers, programmers, and artists. Freelancer.com, Fiverr, and Guru.com have all carved out respectable places in the freelancer platform niche, but none have been as successful as Upwork. Upwork formed in 2017 when the freelance companies oDesk and Elance merged and today it has about 20 million users. Although Upwork has fewer users than some other similar platforms, its five million clients, of which about 770,000 are active, make it the highest-grossing and most valued freelancer site. The clients who drive Upwork’s success are a combination of major corporations who are looking for the flexibility gig workers offer and average consumers who need jobs done without long-term commitments.

Opportunities in the gig economy

The emergence of the gig economy provides plenty of new opportunities for companies to connect with their consumers and the public. A study by SAP Fieldglass and Oxford Economics shows that 38% of managers surveyed had already hired freelancers on different platforms and that the number is expected to increase. The numbers also show that by 2027 about 86.5 million people will be freelancing in the US alone, which is an incredible number that will be much higher globally.

Research on the gig economy is also creating new opportunities for companies that conduct studies on gig work as well as the consumers who participate in these studies. Hivemind.zone offers individuals the opportunity to get paid for market-research-related tasks, such as mystery shopping or taking part in a brand evaluation, with the goal of helping to develop a particular brand or product better.

Gigwalk is another example of a platform that allows businesses that conduct market research through the gig work sector. Four of the nation’s top five consulting firms use Gigwalk for market research that is gathered and collated by gig workers hired on the platform.

All of this means that in the future companies, workers, and consumers will be able to reap enormous benefits from the gig economy if they properly understand how it works. Companies that connect with their consumers and understand that quality doesn’t have to be sacrificed when contractors are hired will benefit, as will contractors who will continue to enjoy the freedom of gig work. Ultimately, though, the consumer is positioned to benefit the most from the gig economy thanks to a combination of convenience and choice.