The Gig Economy Part II: How the Gig Economy is Changing Labor Markets

You’ve seen them in the cities  — food delivery people on bikes — everywhere. Maybe you’ve wondered, “How can so many people afford food delivery?” But, did you also know that from the comfort of your couch and tablet you can get someone to set up your chandelier for a fixed price? Or that you can hire a magician to entertain at your son’s 5th birthday party? You can even view their ratings and experience!

So what’s the deal? Is this economic model even sustainable?

This post is the second in a series on the gig economy. The gig economy is a monster of a topic; it represents a cultural and economic shift that’s changing the way Americans are living their everyday lives. If you have not read the first blog in the series, we highly recommend you do that here.

Quick summary of part 1: we explored the origins of the gig economy, and found that the rise of the internet and broke college graduates in the late 2000s combined with the economic recession of 2009 fused to create a new workforce that was willing to work remotely, cheaply, and effectively — cutting out the “middle-man” (companies)  between consumers and skilled workers.

Let’s fast-forward to the early years of the 2010s: skinny jeans, Ke$ha, Ambercrombie and Fitch hoodies, the iPhone 4, and lots and lots of plaid.

The tech industry quickly caught onto the action of the gig economy. Startups around the country began growing, and with more and more people using their smartphones, having an app became the name-of-the-game. Below are charts showing the number of apps on the Google Play Store (left) and the App Store (right). (Graphs courtesy of statistica.com)

Apps had previously been mostly phone tools: personal calendars, camera effects, games, etc. As smartphones began to envelop the daily life of Americans, it became standard protocol for companies to have an app for consumers to get their products or services. Banking apps, shopping apps, and service apps became more and more common.

Let’s talk about on-site, gig jobs. On-site jobs are jobs in which the consumer and service-provider are in some sort of physical contact, including being in the same location. These jobs can include construction, medical staffing, “temp work,” IT consultation, transportation, and foodservice.

A lot of on-site jobs are temporary by nature. People eat three times a day. Construction jobs end when a project is completed. A transportation service is complete when the customer gets to where they want to be. You get the point.

Another huge factor to be considered is the weather. For example construction companies in areas with harsh climates tend to close operations during the cold season, leaving many workers out of a job for a large portion of the year. Thus, construction workers tend to have a second job during the winter, in carpentry, hazmat, material-moving, etc.

Between these two factors, holding a steady, 9-to-5 gig job that’s on-site is nearly impossible. Much of your work revolves around the schedules of other people; it’s uncommon for a plumber to get a call at 2 pm on a Tuesday because the toilet’s clogged. So these kinds of workers are destined to work odd and intermittent hours.

So what do construction workers do when winter comes? Should they just line up at the local Home Depot in the morning, waiting for a job? Should they learn another skill?

They could become a handy-man on Takl, a site that connects consumers with skilled professionals to come and do work ranging from deliveries, junk removal, janitorial work, pet-care, and much more! The service comes with a fixed price, so there’s no haggling or awkward moments when it comes time to pay up.

This cool web service, and others (TaskRabbitHandy,Thumbtack), provide an easy way for workers of all sorts of trades to find quick, temporary, and haggle-free jobs. It’s actually quite amazing what you can find when you go into some of these sites (Graduate-level Math tutor, Magician, Window-shutter painter). If you’re looking for the most niche, most quirky jobs, I recommend checking out Thumbtack, it’s honestly pretty fun.

These sites, and many others like them, emerged around the year 2010, and many are headquartered in the Silicon Valley. Taskrabbit began in 2010 in Boston, and has since moved to San Francisco; Thumbtack was founded in 2009 in San Francisco, and Handy was founded in 2012 in the UK. There are many, MANY, more with similar origins.

It’s no surprise that these companies are doing well, and in fact, nobody is really complaining. Part of that is because the U.S. is currently going through a labor shortage, with some 6.7 million job openings. As the economy rebounded from the recession in the 2010s, more and more jobs were created. Conversely, as more and more options of work became available, fewer and fewer Americans were willing to work low-wage, manual-labor jobs. Quite a predicament right?

This scenario created the perfect storm for the growth of these tech companies because people could make a livable wage doing several odd jobs on an odd schedule. Technology bridged the gap. In fact, some people are more than just living: they’re living large!

By picking jobs well, charging the right amount, and having the proper experience, one can make a hefty profit on these new service platforms. One San Francisco man managed to make over $14,000 a month doing handiwork with JackRabbit. When asked how much he charges, here was his response:

“I charge $150 an hour. I used to do minor home repair and handyman things, but since my rate went up, mostly I do more of the specialized tasks that take a higher skill: Electrical plumbing, TV mounts, and things like that. Some of the other categories like deliveries and IKEA furniture assembly, most of the people who do those charge cheaper rates, so I don’t really get picked for that anymore.”

Brian Keith Schrier started off doing the handy work he knew all-too-well; the kind where he charged $20-25 an hour to do simple work. He learned new skills and was able to increase what he charged because of it. Here’s the full MarketWatch story, it’s pretty amazing.

Browsing those websites and seeing just how much you can make in a day doing odd jobs is pretty cool; makes you want to start an account and see what you can do! And you know what? Nothing’s stopping you. Go do it!

We didn’t even cover some of the most interesting on-site service markets that have come up, like food delivery and transportation! The sheer number of Uber-eats and DoorDash bikers I see every day in New York City is amazing. And the way that Uber and Lyft are shaking up the taxi industry is incredible! I highly recommend you research it sometime.