Over the last decade, there has been a rise in the gig economy- a disruptive deviation of the usual glimpse of work. The new generations have a different approach to earning – and their focus is on independence and self-expression. Need a job? Hop on the Uber app to apply, and you can have one in 3 days or less – no interview, no boss, no office drama.
Because technology is more accessible than ever, people are maximizing virtual opportunities by embracing freelancing and ‘independent’ work. For years there have been countless speculations that independent work can be the future of work, and COVID-19 may have proved that entire theory in 3 of the longest months in history. The flexibility, freedom, and choice of working how and when you want are enticing to younger and older generations alike. According to the 2019 Freelancers in America report released by Freelancers Union and Upwork, it is estimated that 57 million Americans freelance, which constitutes 34% of the total American population. This year 53 percent of Gen Z workers freelanced—the highest independent workforce participation of any age bracket since FIA’s launch in 2014.
There’s another side to the freelance “boom,” though: According to the Bureau of Labor Statistics, the gig-economy makes up only 3.8 percent of the American labor force.
Of course, they conducted their last study in 2018, and it was the first one in 13 years, but at least they’ve started tracking alternative work.
Uber is a pin drop on the Google map of life.
Founded in 2009 and known initially as “Ubercare,” Uber came up quickly as a significant national, then global stakeholders and leader in gig-economy firms.
According to the information available on Uber, they are available in over 600 cities spread across 65 countries. In the US alone, it’s estimated that Uber has over 3.9 million drivers as of the most recent 2020 study by Business of Apps.
Since its creation, Uber has made a remarkable impact on the economy. From community spending, job creation, drivers, and both Uber users have a significant effect on the economy. Uber’s revenue in 2018 came to a whopping $11.3 billion – a 43% increase in 2017, while gross bookings were up 45%, to $50 billion.
Uber has two categories of workers- The “independent” workers, otherwise known as contract workers, and the full-time Uber drivers (or employees). The independent drivers form a larger percentage of Uber’s employees, while only a small portion represents those who work full-time. It’s estimated that Uber driver average compensation totals a net earning of $11.77 per hour, after deducting Uber fees and driver vehicle expenses from passenger fares.
So, is working for almost $12 hour more tolerable when you’re free to do it when and where you want? Even if you can get more to work in an office in an entry level job?
Generation X and Y seem to think so.
For most people who work for Uber though, driving is only a side job or supplementing their existing source of income. Many Uber drivers have full-time jobs to provide benefits that Uber doesn’t offer, like unemployment insurance, gas, medical insurance, and social security payments.
But…low wages correspond to lack of enthusiasm and not wanting to last on the job. There have been reports that the average Uber driver lasts for three months and drives below half time, or just 17 hours a week.
Does anyone know what to expect from the gig economy, or what?
Two very different sets of reports presented (typical, right?) One says that Freelancers make up a lot more workers than the Bureau of Labor Statistics recognizes, and one that says freelancers are a shrinking industry. The Bureau of Labor Statistics probably an interest in demonstrating traditional employer firms are king: they capture more revenue from taxes, social security payouts, and property taxes. The freelance
During the Coronavirus shut down, people looked for creative ways to support themselves and their families through remote work. (Remind you of anything?) That’s right – we’re following in our grandparents’ footsteps. In the Great Depression, people found creative ways to get by, too.
Will BLS and their previous predictions of a drop in remote work be correct? Or will we see more participants in the gig economy than ever post COVID-19?
We think so, and here’s why:
People recognize the need to have independence and flexibility in their work and their skills. It’s not just the environment that you work in that matters, but the ability to build your skills and go somewhere with them. Independent practice offers the opportunity to move through experiences quickly – like jumping off a cliff and building the plan on the way down. As people find less traditional employment and employers are cautious about adding jobs back immediately over the next few months, we may see a rise in the gig economy while they continue to find other ways to feed their families.
We believe the future of work should be an all-inclusive one, one that tends to balance the app-based jobs and traditional employment careers to create a harmonious and thriving economy. If our goal is to have a booming economy, our focus should be on improving the quality of life of full-time workers and integrating online gig economy jobs for maximum benefits.
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