What to Know About Gig Work and How It’s Changing

The Gig Economy Is Transforming the Workplace

Young Black Woman Driving Car for Rideshare
••• adamkaz / Getty Images

While the demand for gig work is on the rise since the pandemic began, the need for workers in some sectors has diminished while other industries have been flourishing.

The average number of daily gigs—any type of work that’s done through an app or digital platform—is up 25% since March, according to GigSmart, a two-sided gig economy platform focused on connecting individuals to work. Services such as moving drivers, warehouse laborers, packers, and loaders have risen in popularity. However, demand for hostesses, food prep workers, bartenders, and retail merchandisers has fallen off, said Kelly Strain of GigSmart in an email to The Balance.

Gig work may include driving for Uber, selling products on Etsy, or delivering food for DoorDash. Also known as the sharing economy or access economy, the gig economy’s landscape is full of lucrative opportunities, especially for those willing to work in more high-risk roles.

Key Takeaways

  • Some sectors are flourishing more than ever while needs in other industries have died down
  • The average number of gigs completed per day is up 25% since March
  • Higher-paying gig work in 2020 is also directly linked to increased chances of exposure to COVID-19.
  • The CARES Act, which includes Pandemic Unemployment Assistance (PUA), allows qualifying gig workers to collect unemployment benefits, depending on eligibility.

Are There Lots of Jobs?

“With all the economic uncertainty in this present time, there’s still plenty of demand from the usual gig economy suspects like drivers, shoppers, and delivery people,” Spencer Fry, the founder of Podia, a platform that allows people to sell creative projects online, told The Balance in an email.

Fry explained that there has been a shift in the mindset in which people approach the gig economy. When the pandemic made its debut, workers got a reminder of just how fragile our economy can be. In turn, they started to seek out more robust forms of gig work rather than jobs that only allowed them to make a few extra bucks. 

On Podia, for example, there was a flood of new users who decided that instead of driving or shopping for someone else, they’d prefer to capitalize on their own skills and sell webinars, downloadable content, and educational courses. Many of them ended up building robust forms of recurring income. According to Fry, one out of every three Podia users earns $1,000 or more per month. Other similar platforms like Substack and Dumpling have experienced the same shift of people who want to leverage gig work to create sustainable businesses.

What Is the Pay Like?

“People who think more long-term and seek out an audience for their creative work have an opportunity to make a lot more than they would with some of the traditional gig platforms,” explained Fry.

These higher earnings arise because gig workers have the chance to upsell or move into additional services. They can build their own client base and don’t have to rely on a larger company to feed them jobs.

GigSmart’s COVID-19 report revealed that not only is demand for gig work up 25% per day, but average pay has increased from $17.22 per hour to $21.97. The skills that have experienced the largest bumps in pay include furniture moving, security, handyman services, carpentry, and warehouse labor.

In addition to base pay increases, gig workers have seen higher tips. This appears to largely be due to customers' understanding that things aren't great for many of these workers right now as they are facing serious health risks when performing certain tasks like making deliveries. Grubhub and Seamless reported that tips to drivers were up by around 15% in May, while Instacart said that tips for their shoppers had increased by a massive 99%.

Has the Work Become More Dangerous or Difficult?

“Gig workers are much more exposed to health-related dangers than those in other industries, mainly due to the fact that their work often involves coming into contact with a large number of people every day,” explained Anna Barker, founder of LogicalDollar and employer of a number of gig workers, in an email to The Balance.

Whether it's repeated visits to the supermarket to collect customers' groceries, visiting a number of restaurants to pick up take out, or dropping off deliveries to several customers per day, these all increase the risk of gig workers coming into contact with COVID-19.

There are some risk mitigation measures in place. These include contactless deliveries and companies like Uber requiring both drivers and passengers to wear masks when in the car. That said, none of these are 100% failsafe, especially when you consider reports of gig workers being unable to get the necessary PPE.

Are Gig Workers Eligible for Unemployment and Other Benefits?

During normal times, gig workers are not eligible for benefits. However, if they grow their own business on a platform like Etsy or Podia, they can incorporate themselves and enjoy eligibility for state-based small business programs, disability insurance, and other benefits.

Coronavirus and the CARES Act, which includes Pandemic Unemployment Assistance (PUA), has changed things. This federal program allows qualifying gig workers to collect unemployment benefits. To be eligible, you must be a gig worker who has lost your job(s) as a result of the pandemic. You’ll also be required to prove what you were earning before you lost them.

While PUA is temporary, it could lead to a new framework in which gig workers may eventually receive unemployment benefits under normal circumstances. New York’s Court of Appeals ruling for Postmates may also open the doors to making these types of benefits the norm.

In the ruling, the court stated that couriers for Postmates, a food delivery app, are viewed as employees rather than independent contractors and can therefore qualify for state unemployment benefits.

Paid sick leave may also become common for gig workers thanks to recent changes like the city of Seattle granting it for those who complete gigs through companies like Uber and Lyft. The law requires that sick workers receive their “average daily compensation” based on the days they worked since October 2019.

The Bottom Line

If you’re tired of the 8 to 5 life and ready for a change, gig work may be a good option. It can give you the flexibility to take on the jobs you want, when you want. Since it’s changing rapidly, gig work may also bring you the benefits and other perks that you’re used to in your full-time position. It’s definitely something you should put on your radar if you’re longing for a different, non-traditional way to earn a living.