In a nutshell: The nature of work is changing as an increasing number of people take on freelance-type assignments.
One of the world’s fastest-growing transportation services doesn’t own any cars and one of the most well-known travel companies doesn’t own a single hotel.
The gig economy (sometimes also called the sharing economy, peer economy and collaborative consumption) is built on the idea of peer-to-peer sharing of equipment, cars and even homes, all with the help of technology.
The gig economy includes technology companies connecting people who want to share, trade or swap goods and services. Technology has merely given people a convenient and easy-to-use platform (websites and apps) to conduct e-commerce.
It is expected to grow, especially as mobile usage increases and startups continue to become the aim to be the next game-changing gig business in their industry.
Gig Economy Pioneers
Companies such as Uber, Lyft, Airbnb, Couchsurfing, Zipcar, Kickstarter and Lending Club pioneered the gig economy before the term was even invented. They are considered disruptors in the market because they have created a completely new way of doing business, shaking up conventional models.
Websites and mobile apps allow people to create, collaborate, produce and distribute goods and services directly to other people. You can call for a ride, fund an invention or project, borrow or lend money and rent a car or house through multiple platforms in the gig economy.
Growing Economy, Growing Interest
In 2016, about one in 10 Americans earned money by providing a service, job or task through a website or mobile app, one in five sold something online and 1% rented out their property through a home-sharing site, according to a 2016 Pew Research Center survey.
Once you add up everyone who earned money via online platforms, that’s 24 percent of American adults who profited over the last year, according to a Pew Research Center report, “Shared, Collaborative and On Demand: The New Digital Economy.”
Considering the ecosystem relies on people to participate and technology companies to connect them to each other, the gig economy is still in its infancy.
According to the nearly 5,000 respondents to the Pew Research Center survey:
- 15% have used ride-sharing apps like Uber or Lyft
- 11% have used a home-sharing app like Airbnb or VRBO
- 4% hired someone online for tasks or errands
Top users appear to be college graduates, those with a household income of $100,000 or more and people under the age of 45.
Pew Research shows there is room for growth as people become more aware of the gig economy and as the next generation grows up more comfortable with using mobile devices to buy, sell and trade. AN estimated 70% of the world’s population (6.1 billion people) is expected to have a smartphone by 2020, a sharp increase from 2.6 billion in 2014, according to Digital Trends, an online technology magazine. This can only mean more gig economy workers and users — and more disruption.
Editor’s note: This is the first in a two-part series about the gig economy The second article, found here, focuses on how the gig economy is growing and what critics are saying.