Introduction and Overview
What is this "gig economy" I keep hearing about? Is it just Uber and Upwork, or is it all freelance jobs? What about the temp and contract workers out there? Even if hired offline, are they now giggers? The answer is "Yes!" to all the above. Yet there is still some understandable confusion about what the gig economy is.
This is because the gig economy is very diverse: it can include temporary workers, contract workers, consultants, and freelance CEOs, as well as freelance workers, entrepreneurs, and solopreneurs.
The gig economy is an amazing force that normalizes all types of project and temporary work and changes the concept of the workplace for everyone in and out of it.
It is no wonder that we all feel the perpetual white water of change all around us. There is no standing still in today's work environment. No matter how fast we paddle, the current of change will keep rushing past. Nothing is speeding up that change more than the technology in your phone. The year 2017 marked the 10th anniversary of Apple's iPhone. It's led to the smartphone revolution fueling the remarkable change of the workplace as we know it. I am no exception to the opportunity (and the anxiety!) that this change brings. So I wasn't entirely surprised when I started seeing an interesting trend start to swell all around the blog I write for small business owners: the meteoric rise of the freelance economy.
Today's workers are "digitally enabled" by having a computer in their pocket. When you consider that the first iPhone was released in 2007 with zero apps, the amount of growth in on-demand products and services since then is nothing short of staggering.
The ChunkOfChange.com blog is my labor of love; my day job is running a small creative agency in Long Beach, California, called ohso! design. When my business partner and I first started our e-commerce and graphic design company in 2004, we had a huge secret! Shhhhh! We could not disclose to potential clients that we had created an in-home studio, and like many, we set up a virtual "storefront." We masqueraded as an actual brick-and-mortar studio at a physical location and pretended that our scrappy team all actually went there to work every day. As freelance specialists worked on projects with us, they got ohso! design business cards and sometimes even (the drug dealer favorite) disposable cell phones with numbers that were their "business line." In reality, everyone preferred to work from home or the local coffee shop, and no one was the wiser as we churned out quality projects, ranging from slammin' websites to advertising campaigns to marketing strategy.
Why the deception? Because, as hard as it is to remember today, you really could not be taken seriously as a team if you didn't have people on a leash. As a leader, my ability to keep a project on track and produce stellar results was mistakenly equated with micromanaging the team from close quarters. If I had disclosed my hands-off approach to letting people do what they were awesome at, we wouldn't have won the projects that grew our budding company.
Even finding our freelance partners was an exercise in word-of-mouth and, sometimes, taking a chance on someone met through an online community.
A fundamental societal change — the removal of the shame in working flexibly, from anywhere, part time or full time, temp or permanently on demand — is what I believe is the fire stoking the engine of independent work.
Let's take a further look together at the gig economy crystal ball and be amazed at where we've come in such a short timeline through a groundbreaking study that you'll see me refer to throughout this book.
The bulk of my statistics come from McKinsey Global Institute's 148-page report "Independent Work: Choice, Necessity, and the Gig Economy." MGI surveyed roughly 8,000 respondents across Europe and the United States, asking about their income in the past 12 months — encompassing primary work and any other income-generating activities — and about their professional satisfaction and aspirations for work in the future.
MGI found that 20% to 30% of the working-age population in the US and the EU-15 (or up to 162 million individuals) engage in independent work and that 10% to 15% of the working-age population relies on independent work for their primary income. The study broke them down into four categories:
Primary Income Supplemental Income
Preferred Free Agents Casual Earners
Choice 30% 40%
Out of Reluctants Financially Strapped
Necessity 14% 16%
The numbers are growing, year over year. MGI sees "significant growth potential in the years ahead, based on the stated aspirations of individuals and growing demand for services from consumers and organizations alike."
MGI also found that, "while many independent workers want traditional jobs, roughly one in six people in traditional jobs would like to become a primary independent earner. In fact, for every primary independent worker who would prefer a traditional job, more than two traditional workers hope to shift in the opposite direction."
Survey results indicate that "the independent workforce could grow from around 27% of the US working-age population today to as much as 30% to 50% in the future."
Contrary to popular belief, independent work is not dominated by millennials; in fact, they represent less than one-quarter of independent workers. In the United States, the average age of digitally enabled independent workers is roughly 40. In actuality, "the independent workforce by and large resembles the traditional workforce. Independent earners come in all ages, education levels, incomes, and occupations."
Overall, the outlook for the gig economy is good. According to the study "Freelancing in America: 2016" conducted by the Freelancers Union and Upwork, "freelancers say perceptions of freelancing are becoming more positive (63%) and respected as a career path (60%). Nearly half of full-time freelancers (46%) raised their rates in the past year, and more than half (54%) plan to raise them next year."
Of course there are challenges, too: lack of stability (i.e. unpredictable income), negotiation for fair wages, and access to health insurance and other benefits. Even so, it seems that the pros outweigh the cons.
According to the Freelancers Union study, "the majority of freelancers say that a diversified portfolio of clients is more stable than having one employer." Other benefits include feeling more respected, engaged, and empowered, as well as having freedom and flexibility.
In this book, we'll take a curated view of the gig economy and what it means for you specifically.
Here's a quick breakdown of content.
CHAPTER 1- Introduction & Overview
CHAPTER 2- All About Peer-to-Peer Platforms: What apps and sites are out there and how do they work?
CHAPTER 3- Becoming a Freelance Elite: How to use Unique Value Proposition and your "-EST" to stand out from the crowd.
CHAPTER 4- Slave to the App: The pros and cons of freelancing apps and online platforms and how to live with and without them.
CHAPTER 5- The Things You're Not Going to Think About
CHAPTER 6- Why Choose You?: The ins and outs of adding value to your work and how to reach the elusive "next level."
CHAPTER 7- The Tipping Point: How to go from party of one to small business owner in the gig economy.
CHAPTER 8- Reviews, Rejection, and Redemption: The importance of online reviews and why you must embrace them.
CHAPTER 9- Ethics in the Gig Economy: How to develop a code of ethics and what it means to work ethically.
CHAPTER 10- Love Living in the Future: Conclusion
Unique Value Proposition personal branding worksheet Linking Benefits personal branding worksheet
Throughout this book, in addition to all the killer stats, you'll see special "Spotlight" sections from real people living the gig life. You'll also hear many of the struggles endured, firsthand, by my token freelancer, Emma, in her words. Further, look for "Do This, Not That" tips toward the end of most chapters. Finally, many external resources referenced are gathered for you, dear reader, at chunkofchange.com/gigisup.
I look forward to being your trusty guide and getting us all paddling in the shifting white water ahead. As constant change is our only known, let's keep in touch as we go along this journey!CHAPTER 2
MAKING THE MOST OF
In November 2016 I spoke at Airbnb's global conference to fellow Airbnb Superhosts on how to make their home listing stand out. Airbnb unveiled a new product, Trips, and I proceeded to become an "experience host."
I take interested folks paddleboarding in the Pacific waters by my home while consulting about their marketing.
Los Angeles is Airbnb's largest "experience" market, and anyone can become one of these hosts to in-town visitors, mainly based on their skill and giving access to their passions. What kick-ass experience would you share with friendly people that came to you? That's right, you can now get paid for a passion as a fun side gig, regardless of what your career is.
According to Forbes, there were 53 million freelancers in America in 2016.
Thus, whether they're earning a living wage or bringing in extra money on the side, one of every two workers will be a "freelancer" in some capacity.
The Financial Times gives a similar diagnosis: "In today's gig economy ... technology has cast a wider net, drawing in people who would not otherwise be gigging at all. Think of the retired person who occasionally lets out a spare room on Airbnb, or the office worker who picks up an extra passenger on the morning commute by using a ride-hailing app ... The line between gigs and work is getting increasingly blurred."
And the numbers are growing ever larger. MGI states that "research from Intuit projects that on-demand work will post more than 18 percent annual growth in the coming years, increasing the number of workers participating in on-demand platforms from 3.2 million to 7.6 million."
The goal of this book is to help those of us firmly planted in freelance-land and also those new to the gig economy navigate this new economy from top to bottom. There's no better place to start than a look at the ever-growing digital platforms making it a reality.
It seems that many of us giggers are still in the dark about our online options. "MGI's own survey indicates that 30 percent of working-age Americans are not aware that they can use digital platforms to earn money. It seems likely that many people who could benefit from additional options for earning income and would choose to pursue this option simply do not yet know this avenue is open to them."
So, to start, here's a (non-exhaustive) laundry list of popular active platforms that allow you to connect with goods and services provided by other human beings.
There are a lot of options — too many to ignore, in fact. The trend of low-overhead, app-based startups appearing out of nowhere to lay siege to traditional businesses has become so widespread that it now has its own term: "Uber syndrome."
In fact, MGI points out that career networking site "LinkedIn has seen the number of independent workers on its platform grow more than 40 percent in the past five years, a trend that spurred the creation of a dedicated platform for these workers, ProFinder."
These sites and apps have become a gateway to the freelance world, rapidly turning consumers into contractors. Of course, this gradual shift toward the gig economy has been happening for decades. In the rather bleak outlook that Stephen Hill describes in Raw Deal: How the "Uber Economy" and Runaway Capitalism Are Screwing the American Worker, the increasing reliance of industry on 1099 workers (as a way to avoid paying for an employee safety net) has long been forcing people into unconventional roles. The digital platforms that utilize independent contractors on a wide scale are only accelerating that phenomenon.
Rather than lamenting that contracting is "the end of a good living," it's my plan to show you how digital marketplaces can make up a comfortable living, create an added cushion, offer a "next step," enable a flexible lifestyle (well-suited to multi-generational caretaking), or provide anything in between.
Consider how jobs used to work. Back in the day, looking for work meant calling up your employed friend Mike who'd heard there were openings down in the mail room. You'd work there for a handful of years before being noticed by Bob in Finance, who would promote you to office aide. Eventually, Manager Bill would notice how organized things had become in Finance and ask you to be his assistant, then later a community liaison, and before you'd know it, you'd be managing your own department.
Fast-forward to 2018. You call up your employed friend Mike, but he's now handling the work of Bob and Bill because the company downsized most of the Finance Department during the recession and never brought those jobs back. Mike's pretty sure they're not hiring, but he gives you the website application, which resembles a mid-'90s GeoCities page. Determined, you copy-paste your resume into the form to apply, only to discover that the submit button is unresponsive and their phones are answered by robots. It takes some digging to discover that there is still a mail room, but its staff is subcontracted through an unrelated company in the Philippines. "Sorry, man. Have you tried LinkedIn?" Mike shrugs.
Needless to say, job hunting today is complicated. Most would agree that the hardest part of finding work in the new economy is just getting a foot in the door. Now, with so much digital infrastructure separating an employer and its applicants, you have no idea whether you're competing with ten people or ten thousand.
When you need money now, that level of uncertainty can easily turn into desperation, making it even harder to display that critical air of normalcy when you do manage to make the interview. What if there were a way to make money while job hunting and get that lucky foot in the door? Well, that's the modern fantasy that peer-to-peer platforms are trying to fulfill.
People have always taken odd jobs when times got tough, be it watching a neighbor's kids or driving a friend's mom to the doctor. In that regard, the emergence of digital marketplaces (like TaskRabbit) isn't so much a revolution of the sharing economy as it is us rediscovering our local handyman. Even so, the Yellow Pages could never give the local handyman instant access to millions of people with a squeaky door — the way Thumbtack can.
A nanny looking for a new position may still find leads by talking to families on the playground, but she could also make herself available to "more than 20 million members in 18 countries" by posting a profile on Care.com.