The gig economy runs the entire spectrum of independent work, including everything from ride hailing and IKEA furniture handymen to high end designers and advisors offering consultations by the hour. It’s a big and far-reaching term, and while that may limit its effectiveness in describing any one group, it’s clearly growing. Reports from groups like Intuit and MBO Partners may split hairs on definitions, but they point to the same broad expansion.
Even though “gig worker” defines many, much of the attention has focused on the sky-high valuations and controversy surrounding the asset-based side of things. These are individuals utilizing a thing -- like a spare room or a car -- as a source of income. Whether it’s the poor returns for workers or questions around their employment classification, labor-based gig work doesn’t seem to be a new iteration of work as much as a new way to do rapidly-disappearing “old” work.
Ride hailing is in many ways a poster child. Workers feel exploited, underpaid (sometimes outright stiffed) and tend to treat the work as a stopgap, not a career. As an example, roughly a quarter of Uber’s drivers turn over on average every three months. Their primary employment competitor for drivers? Outside of Lyft, it’s McDonald’s.
In stark contrast are the individuals who are monetizing their skills (creative work, consulting, etc.), and this difference is noteworthy. Skilled independent workers can differentiate themselves from others, building a brand based on their expertise to carve out a niche. They can charge what they are worth and control the services they’re performing. They can work with clients and customers from anywhere (assuming the skill can be digitized), and can assume lower overhead.
After all, expertise doesn’t need to be cleaned like a room or get its oil changed like a car. While it’s true that these kinds of skills were accounting for independent incomes and careers in the past (freelancing is by no means a new concept), major shifts from offline to online opportunities have pushed digital skills-based work into the societal mainstream and the economic spotlight.
The viable future of the gig worker has more to do with this increase in skilled freelance opportunity and the shifting views of employment. More and more businesses are sourcing skilled talent through the freelance economy, focusing on flexibility and on-demand expertise to get things done.
It certainly helps there’s a financial incentive to tap these resources, too. Responding to that demand and recognizing the limitations of traditional employment, freelancing has swelled to a trillion dollar business in the U.S. An increasing number of skilled workers and entrepreneurs have used digital marketplaces (Fiverr being one of them) to connect, democratizing services for entrepreneurs while creating new revenue streams for freelancers. However, there is still plenty of room for growth.
These relatively new ways of connecting skilled individuals with businesses have already opened up the global market for entrepreneurs to find freelancers from anywhere, while also driving awareness and demand for those skilled individuals. But like most innovations, the technological and financial opportunity has outpaced the governing. It’s time to look for a long term solution that will provide safety while maintaining opportunity for this growing segment of skilled, independent workers.
Some progress has been made, like the Freelance Isn’t Free Act in New York City, which helps to address one of the major problems of offline freelancing -- getting stiffed. This legislation went into effect recently, and similar legislation is on the way. More than anything else, this kind of legislation signals that a long-fragmented group (freelancers) is not only growing in size, but in stature. Other recent movement has come from Senator Mark Warner (D-Va) who recently introduced a federal bill around portable benefits for gig workers. While early in the process, the interest from Warner and others in the federal government shows they want to address the problem in a substantive way.
That progress doesn’t include everyone, though. With the opportunity skilled gig work offers for many to build a career that’s not tethered to a location or a company, one would expect the executive branch to support its growth as a jobs creator. But as of June 7, the Labor Department rolled back Obama-era guidelines for joint and gig workers, adding more confusion and opportunities for exploitation.
With 66 percent of millennials wanting to start their own business, it’s clear that addressing the way entrepreneurs and freelancers build their businesses and prepare for their well-being can have huge long term upside. Skilled gig work can be a strong economic engine for many in the U.S., both as new business growth individually and as a healthy supply of talent in the entrepreneurial ecosystem.
The steps to growing the skilled gig economy have already started, with a strong market demand for talent, as well as interest and action from federal and local stakeholders. By creating a framework for long term viability, skilled gig work can have an even more profound impact on individuals and the larger U.S. economy.