According to gig economists interviewed in the Wall Street Journal, we were all wrong.
Blinded by the shine and rapid rise of Uber and Lyft, the general public and even the experts overestimated the impact of gig-work companies and the numbers they were doing.
“The gig economy is actually slowing down,” the experts now say. “Not that many people are actually doing gig work,” they lament.
I disagree. If you check the numbers, there are anywhere from 16.5 million to 57 million people working in the gig economy today. They’re Uber drivers, babysitters, dog walkers, and more. The sheer number of gig workers and freelancers means this group is a significant contributor to the health of the economy, generating more than $700 billion in the US alone. That doesn’t seem insignificant to me.
Furthermore, it’s important to understand the gig economy is not a monolith. While there might be slowed growth among the major players due to various issues — ranging from decreased popularity to PR disasters and backlash — gig work and freelancing are still trending up. According to research by MBO Partners, the number of freelancers earning six figures has increased 70 percent over the last seven years. As the economy continues to grow and change, we’ll see gig work popping up in every industry and most any position.
More people are joining the gig economy these days because the “regular” economy has made it impossible to live without a supplementary income. Cost of living has risen exponentially faster than the average salary. A house that cost $200,000 in 2000 now costs more than $3o0,000, while the average salary in the US has barely moved. We’re more educated than ever, but we’re also saddled with more student debt than ever. It’s harder to reach the traditional landmarks of success. People are flocking to the gig economy just to keep themselves and their families afloat.
When the regular system fails to provide, people have to seek alternative means. No one should have to work 40 hours a week at a standard 9-5 and then turn around and work more hours doing gig and freelance tasks just to make ends meet. The rise of the gig economy is a reflection of how the free market has failed workers, but I’m not going to get into a socio-philosophical critique of capitalism today.
I do, however, find it interesting that the same gig economists who four short years ago couldn’t wait to explain how the gig economy was going to change the world — while being in the pocket of some of the biggest gig employers — now can’t wait to tell us how the gig economy is, in fact, failing.
While Uber and Lyft may not be growing as fast as they were before, this fact is not symptomatic of the gig economy at large. It is a reflection of the performance of only those companies. The reality is car washers, delivery drivers, and handyworkers have always been around. People have been doing gig work forever; your favorite on-demand labor app simply aggregated them into one place.
Let’s not analyze the gig economy like the macro one. That’s why the gig economy was started in the first place.
Arran James Stewart is the co-owner of blockchain recruitment platform Job.com.