Colloquially, the phrase “gig economy” refers to people earning income from positions enabled by internet-era platforms, such as Uber drivers and Airbnb hosts. While the size of the gig economy can be difficult to measure, best estimates from a 2023 study suggest there were roughly 4.9 million US platform gig economy workers in 2021.
The gig economy is often considered part of America’s broader independent workforce. As of 2022, roughly 58 million Americans (36% of the workforce) identified as independent workers, up from 27% in 2016.
Uber is among the largest gig economy platforms in the US, with a valuation of roughly $150B as of 2024. Airbnb and Doordash are valued at more than $75B and more than $65B, respectively, as of the same year.
How It Works
Just like any labor market, the gig economy is based on supply and demand. The gig workers offer the “supply” of labor, and the people who require their services provide the “demand.”
In the gig economy, tech platforms such as the Uber app connect the suppliers (people with cars who work as Uber drivers) with those who need their services (people who need rides). These platforms effectively act as market connectors with near real-time gauges on supply and demand.
They also typically receive a cut of each transaction—so if someone paid $50 for a ride to the airport, a portion of that $50 would go to the driver, and another portion would go to Uber for facilitating the transaction. Take rates for gig economy platforms vary based on region and other factors—Uber, for instance, typically has a roughly 30% take rate.
Gig workers typically still have to report their income on their tax returns. In the US, the average salary for full-time gig workers is roughly $60K a year, though high-earners can make over six figures while close to 15% make less than the federal minimum hour wage.
Cultural Forces
Former New Yorker editor Tina Brown coined the term “gig economy” in 2009, when many were looking to make extra cash during the Great Recession.
The total number of people who collected money from gig work more than tripled between 2017 and 2021, rising from 1.4 million in 2017 to 4.9 million in 2021. Both cultural and economic forces are driving the growth.
Witnessing layoffs and economic instability during the Great Recession and the pandemic’s economic downturn has made some people in younger generations disillusioned with full-time corporate work—making gig work more appealing to them.
Case in point: The freelancer marketplace Upwork recently surveyed 1,070 US Gen Z workers who were either full-time, part-time, or freelance workers. The results found that 53% of those surveyed were freelancing for “at least 40 hours per week across a portfolio of different types of work.”
Pros and Cons
For workers, such jobs offer perks like flexible hours and a relatively low barrier to entry—however, in the US, gig workers likely won’t receive health insurance via their employer. Other benefits typical of a full-time position, like dental coverage, employer-sponsored retirement accounts, and more, are typically not available.
However, recent lawsuits regarding how gig workers should be classified—as independent contractors or full-time employees—indicate that some gig workers could get these perks in the future (learn more here).
For companies, independent workers offer quick and relatively inexpensive hires to meet customer demand. Full-time employees can cost up to 1.4 times as much as an independent worker, when factoring in benefits.
The gig economy, known for roles like Uber drivers and Airbnb hosts, has rapidly transformed the way millions of Americans work. Rooted in flexibility and on-demand, project-based jobs, it provides opportunities for both side hustles and full-time income streams, appealing especially to younger generations seeking greater autonomy over traditional office roles. While gig work offers freedoms like flexible hours and project choice, it often lacks benefits like healthcare and retirement plans. Today, we’ll explore how this expanding labor market functions, why it’s growing so quickly, and what it means for the future of work.
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If you want to know how many people are currently working some sort of “gig economy” job (spoiler alert, it’s a lot), or just learn more about the current state of the gig economy as a whole, this podcast episode is for you. The hosts sit down with NerdWallet Senior News Editor Rick VanderKnyff, a gig economy expert who explains why the sector has continued to grow in recent years. Listen here.
Although this article was written pre-pandemic, the gig workers interviewed in it still feel representative of the sector’s modern ethos. In the piece, the writer interviews a handful of gig workers about why, exactly, they’ve chosen to make a living off of Airbnbs or TaskRabbit gigs rather than doing something else. To find out more about the cultural forces driving the gig economy’s growth, read this piece.
Many gig economy jobs are easy to sign up for, with a low barrier to entry that doesn’t usually require an extensive interview process. But that doesn’t mean being a gig worker is an easy career. This article provides a framework for how to succeed in the gig economy, such as getting routines in place to streamline workflows, avoiding burnout, and creating a solid network. Read more here.
Gig work has entered the realm of healthcare, and nurses can now drop into shifts at medical facilities with the same ease as a ride-share driver accepting a rider. This article explores “what happens when nurses are hired like Ubers.”
The 1819 novel “Ivanhoe” popularized the word “freelancing,” when the author wrote about “free-lances:” mercenary soldiers who were “free” to use their weapons (called, yes, “lances”) in service of whoever paid them the most. This video details that story and other gig economy basics. To help you learn more about freelancers and independent contractors, watch this video.
A Jeep Liberty engine. A framed Taylor Swift autograph. A candle that says "See You in Court." These are just a few of the curious items passengers left behind in Ubers this year, according to Uber itself. For the full 2024 Uber lost and found trend report, click here.
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