What is the Gig Economy and should you be in it?

May 5, 2020

 

It’s changing the employer-employee relationship around the world and the way many people choose to work for living, but is it a step forward for all?

Freelancers, temporary contract workers, consultants, independent contractors – none of these terms are new, but the nature of contingent work arrangements have come a long way in the last 20 years, and there is everything except consensus about whether it spells progress or peril for those entering the job market. Whichever side the coin lands on, new technology has changed the way people work, presenting massive opportunities for those who are ready and willing answer to call.

At BAHDigital we think this is a subject that is well worth taking the time to understand to see how you can benefit.

So, what is Gig Economy?

A gig economy is a system where temporary jobs are commonplace and organisations or individuals contract independent workers for short-term engagements. The term “gig” is slang for “a job with a limited, specific timeframe” and traditionally refers to the work of musicians.

It feels like in only a few years, what was viewed as nothing more than a side hustle has become a trillion-dollar industry with millions of participants, and it’s one of many symptoms of a global technological transition that has transformed the occupational landscape. It can sometimes be difficult to classify which jobs are included in the gig economy and which ones are not, so let’s give it go.

In the most modern and up to date sense of the word, the gig economy involves types of work that have appeared with the explosion of digital, mobile technology. The hyper-connected, tech savvy generation that have come into adulthood since societies have become 4G+ connected makes up the main body of winners when it comes to the gig work of 21st Century.

Social networks, online shopping, cloud-based work servers, worldwide high speed internet, and increasingly powerful mobile computers have increased communication to unparalleled levels. With that connectivity have come new ways for people and businesses to interact online. So whether exchanging products and services, or exploiting new ways to make and spend money, participants in the gig economy are those who exploit digital technology to get work.

The gig economy can be broken down by looking at three things: 1) types of industry actors, 2) Types of gig worker, 3) Types of gig

Gig Economy Actors

•       independent workers who are paid per project (gig) not per hour;

•       the consumers who purchase a one-time, specified service (like an Uber Eats food delivery or Dart trip to the airport);

•       the organisation who facilitates the connection between the buyer and the seller through means like app-based technology platforms.

Gig Economy Workers

Those who participate in the gig economy for employment enjoy the liberty of deciding the length and frequency of the gigs they are apt to perform, and this is generally how they are classified.

•       Full-time gig workers do 15 or more weekly hours and often see it as their permanent career;

•       Part-timers work less than 15 hours per week and regard their gig as a supplementary income to alternative revenue streams;

•       Occasional gig workers – you guessed it – work sporadically at least once a month.

Types of Gig Economy Work

•       Selling products and/or services on platforms like on Ebay;

•       Being a driver for companies like Dart, Uber, Lyft, Grab, or GoJek;

•       Registering for freelance work on sites like UpWork, Fiverr, Workana

•       Becoming renter on accommodation sites like Airbnb

•       Independently seeking solitary tasks or projects to perform

Gig Economy in Brunei

You needn’t look further than our local ride-sharing app, Dart, to see an example of the gig economy at play.

A quick search into Dart’s media footprint reveals that full-time drivers performing the minimum standards of service provision can earn easily $1,000 a month. At the high end of the same spectrum, many drivers clear $2,000 in the same timeframe.

Figures like these may not yet be deterring from people from the university degree to conventional nine to five path, but they are definitely nothing to smirk at. Independent workers enjoy the freedom and flexibility to treat their gigs as their primary income source, or just think of it as their side job. An added benefit of this industry of course, is that the gig economy presents decent opportunities for the both the skilled and unskilled worker, and this is not where the freedom of choice ends.

Gig-driven technologies like Dart also give consumers a much more modern, convenient experience. For example, the Dart APP is designed with many intuitive User Experience features that allow customers see the price beforehand, to share their trips with loved ones for safety, to review their driver’s performance, and to pay for the service in a seamless, cashless transaction. The inverse of those features also benefits the driver. Despite being a disruptive force for traditional cab drivers, for those who are open to change, this is wholly positive.

It also gives consumers a much more modern, convenient public transport experience. The application is designed with many intuitive User Experience features that allow customers see the price before hand, to share their trips with loved ones for safety, to review their driver’s performance, and to pay for the service in a seamless, cashless transaction. The inverse of those features also benefit the driver. Despite being a disruptive force for traditional cab drivers, for those who are open to change (read millennials), this is wholly positive.

Gig Economy Abroad

The US gig economy is one of the most advanced, and also one of the most well-researched, so it’s worthwhile to take a look at some of the statistics.

•       In the USA alone, 36% of workers participate in the gig economy either through their primary or secondary jobs. (Gallup).

•       Freelance platform Upward estimates that by 2027, there will be 86.5 million freelancers in the US economy.

•       80% of gig employees whose primary income source is their gig pay, say they would struggle to cover a $1,000 expense. (Edison Research)

•       38% of gig workers are more likely to be between the ages 18-34, 25% between 35-54, 11% above age 55 (Edison Research)

•       If these stats aren’t enough, try this one on for size: in 2018 the gig economy accounted for the more than US$1.4 trillion of US income. (PYMNTS)

Closer to Home

•      In Malaysia the gig economy grew 31% in 2017 (EPF Malaysia)

•      26% of Malaysia’s workforce is freelance (Beroe Inc.)

•      56.9% of Vietnam’s workforce is self-employed (Beroe Inc.)

•      50.9% of Indonesia’s workforce is self-employed (Beroe Inc.)

•      Philippines has the 6th fastest growing gig economy in world, with a 35% growth in freelancer earnings in 2017/18 (Asean Post)

Pros and Cons, or Opportunities?

Any new industry will come with initial challenges as detractors, and the gig economy is no different. Some will argue that this form of employment is not necessarily in the best interest of the worker or their financial security. That this form of employment makes it difficult to bring in steady income or get qualified for a mortgage or a loan. But, looking at it another way, these issues could also leave room for more innovation and ingenuity on the part of entrepreneurs and participants to create trade-offs that bring about the best compromise for everyone involved.

Gig Economy Jobs include:

Designer

Whether it’s a family restaurant needing marketing collaterals, web designs and a logo for their launch, or someone needing 3D renders of an add-on to their home, being able to operate graphics software is a valuable tool that is always in high demand.

Driver

Probably one of the most common freelance gigs, all you need to get into the driving game is a valid license (except for busses and trucks which have special licenses). Common options are being a delivery driver, personal driver, or passenger driver.

Photographer / Videographer

Corporate events, weddings, birthdays, team-building exercises, there is never a shortage of occasions that people would like professionally documented. If you can get your hands on a decent camera, lights, and editing software you’re pretty much set.

Consulting (Accountant / Lawyer / Marketer)

It’s perfectly normal nowadays to do any of these higher level jobs within the gig economy. Many small companies need to have their contracts drawn up, marketing strategy devised and books balanced, but don’t want or need a full-time person. You can build up a list of one-off or seasonal clients and make pretty decent pay if you take this route. But it goes without saying, you should at least hold a bachelor’s degree.

Tradesperson

Are you a handyman or woman? Well lucky for you, we live in a world where things break. There are plenty of project-based gigs for people who are good with their hands and can set up wiring, lay pipes, change a timing belt, or do some heavy lifting. To get involved, you’ll need tools and then to advertise your services.

Freelance (Programmer / Cybersecurity Stress Tester )

IT is one of those things that everyone uses but nobody really understands. There are plenty of people and organisations who need help in this regard on a non-permanent basis. So whether you possess the ability to write some intricate code, or know how to hack a computer network, if you talk to the right people you are sure to find work.

Reflecting on the gig economy as a whole, there are always pros and cons. Like many new industries that arise, there are certain challenges to consider… lack of stable monthly income, difficulty getting mortgages or loans, etc. But perhaps this too leaves room for the entrepreneurs to innovate and find business opportunities to meet these challenges.