Your thoughts on the gig economy

[disneysteve]

This topic has popped up here and there in other discussions so I thought a dedicated thread about it would be interesting. I know some of you have some strong feelings about it, one way or the other.

We hear a lot about the gig economy, things like Uber/Lyft, AirBnB, Etsy, and others give people the opportunity to work on their own schedule, taking jobs when they want them or need a few extra dollars. I saw an estimate in Forbes that 43% of the US workforce is expected to be gig workers in 2020.

I have a few friends who have driven for Uber. I have one friend who teaches English to Chinese students online with PalFish. Even selling on eBay counts, so I'm a gig worker myself at times though on a super small scale at this point in my life.

Obviously, there are cons to being a gig worker especially if that's your only source of income. No benefits is the biggie. But a lot of gig workers have other jobs too and do the gig thing on the side to supplement their income. I've been selling on ebay since 1997. At my peak, I was doing $2,000+/month in sales. It wasn't enough to support us but it helped a lot especially when I was between jobs.

Are any of you gig workers? What has your experience been?

[riverwed070707]

I have a FT job but supplement with "gigs". I have several. Landlording if you can count it as a gig - sometimes I spend 2 hours a month and sometimes 30 but safe to say its very, very part time - nets about $30k/yr. I am a W2 employee as corporate event planner, but do social events on the side under a sole proprietorship. I'm very selective in the side events I take on - 1-2 weddings per year and a handful of anniversary parties, birthdays, graduations, etc. I don't advertise - it's all word of mouth referral - and it brings in approx. an additional $5-15k/yr. I do consulting on marketing and social media for small businesses (primarily yoga teachers) and help them establish and get their automated processes up and running. Brings in prob $900/year ($200-300/mo) depending on how long I stay on board. And my latest I've taken on is as a greeter for new residents of the community. I get paid per packet I deliver each month. I put in about 10 hours a month and it currently brings in $200/month - not great but it has room for growth if I take the time to sell more businesses ad space in the packet it could honestly be a solid income supplement plus its kind of fun!

[kork13]

I guess I've never fully understood the idea of the "gig economy" or what necessarily might be called a "gig" job. What's the difference between a "gig" and a part-time job, or side-hustle? Seems to me like it's all the same just referred to differently in modern parlance. .....because.... millennials vs. boomers? I dunno.

Personally, I like the stability of a proper job, or personal business. Or something that produces a fairly regular income, like our rental house. I'm too much of a planner to accept the unpredictability of only earning income based on other people hiring me to provide a one-off service.

[amarowsky]

I think a decent way to differentiate “Gig economy job” vs. “part time job”, would be “Gig Economy Job” = Straight up contractor (1099) + you really don’t have to “apply” you just sign up and meet the requirements and then work “on Demand”. Usually from a scalable app (Uber/Lyft, door dash, grub hub, grocery shopping, other transportation, dog walking apps, fiver, some freelance web sites, etc...)

Part Time = Probably* (not always) get a normal w-2. You had to apply more directly. And likely have to adhere to someone’s schedule (can not immediately choose when&where you work shift “starts”. (I.e. - part time retail, some types of real estate needs for examples (closing agent, notary, etc), some service jobs, part time acting work, or any not full 40+ hour a week jobs where you have some sort of schedule and had to be physically hired).

Merely my (2) stabs @ how to properly classify these jobs.

[disneysteve]

amarowsky beat me to it. I agree. A PT job is typically a set arrangement with an employer to work a certain number of hours on some predetermined schedule and possibly at a specific location. When I did Urgent Care part time, for example, I was contracted for 20 hours/week and I got my schedule several weeks in advance. I couldn't just wake up in the morning and say, "I think I'll work at Urgent Care today". I also couldn't wake up and say, "It's a beautiful day. I think I'll go to the zoo instead of working today".

As a gig worker, however, I could wake up and say, "Gee, it's going to rain all day. I don't feel like driving my Uber around in this weather. I'll skip today".

Now a "side hustle" is much more akin to a gig job if you are in control of when and where you work. Then it's just a difference of nomenclature.

I actually wouldn't classify some of the things riverwed listed as being "gig economy" jobs. Those are typically one and done sort of things. Being a wedding planner is a commitment of time and energy that I imagine goes on for months or more at a time. Yes, you may decide when to accept a job, but once you do, you have to give it the time and effort it requires over an extended period. In contrast, if I hired myself out to videotape a wedding, I'm signing up to work one specific day for a few hours, plus the post production stuff which I can largely do on my own schedule within whatever delivery deadline I've determined.

I never really thought about it but the medical surveys I used to do qualified as a gig job. I signed up for the survey panel for a couple dozen companies. They would send me invites every day and I would decide which ones I wanted to do. If I was having a really busy week, I might only do a couple or none at all. If things were slower, I might do a few each day. At my peak a few years ago, I earned over $1,000/month doing that. Once my job situation changed and I didn't really need that money anymore, I just stopped. I didn't have to quit. I didn't have to tell anyone. I just stopped responding to the invitations because I was completely independent in the process.

[amarowsky]

That being said! I have started to try out Uber/Lyft. They have been an interesting & simple way to make some side dough!

Actually I lucked out the other day, and drove the owner/CEO of Hungry Howies Pizza to the airport. She was super sweet, and we had a lot in common (I didn’t know who she was until half way through the ride). She wound up tipping me $100 and told me, “I should open my own business. It’s worth the risk and you have the right personality”. Which I took to heart, especially because I had just resigned from my corporate job not even a week earlier.

Takeaway from Uber/Lyft :
Average Revenue = $19/hour including typical tips - driving in the Midwest Area of MI (about halfway between Detroit & Ann Arbor). On weekday mornings Only 8am - 11am. Another metric that has been pretty accurate, is between driving to fares, dropping them off somewhere else, and eventually getting back home. I’ve noticed the income is close to about $0.50 - $0.90 per mile (tip depending).
*note - in my area, I think Uber pays a straight $0.60 per mile to drivers. But I adjusted it slightly, because you will not spend 100% of the time driving fares, and sometimes you earn much much more from driving during Surge prices or if you get a great tip.

Highest Revenue = Some times I’ll get stuck in peak fares for a few hours. Maybe about 30% of the time the pay is higher than the $19 avg. Ive had a few days where I have driven for 2.5 - 3 hours, and made $75-90. ($30 an hour would be a good estimate for higher side).

Lowest Revenue = Of all the low times, I don’t think I have made less than $14.75 an hour ever. I’d say the low avg = $15 an hour. And they’re not that common.

Average Gas Cost = Probably equals about $2.00 -3 and hour in my 13 Malibu. Or Close to 10-15% of cost - w/ some variability.

Overall = For what I have been using it for (approx $300-500 bi-weekly spending money @ 15 hours a week ish) it has been Great! Takes the Sting out of “no income” and “recently w/out a job” while getting me active, talking to people (when they want to), and helping folks out while making a few bucks. It’s a numbers game,just like being a server. Tips WILL make the day profitable no matter what, but if they don’t come in right away (sometimes don’t get the tips for a week, when someone logs back into the app) Surge fares in the area will allow you to make up a lot of ground. Or the companies perks/incentives (drive ~30 trips in a week & you’re guaranteed @ least 10 dollar’s per fare or better - example of a common one).

*Taxes = Haven’t had to file the 1099 yet, but as a contractor you will be able to write off all of your mileage. I think the IRS going rate is like $0.55 per mile ? Which should basically offset your fuel costs + reach a small tax advantage (unless you have a ton of repairs).

*Perks = You don’t have to drive w/ Uber Very long, to be eligible for free tuition @ university of Phoenix towards a bachelors. (Online degree, but you should be able to achieve this by driving Uber part time for only a few months or full time for much less than that). This was a huge perk for those looking to earn something, while trying to invest in their career market ability.

*Tip - If you live near an airport. You can pretty much add in 20% safely to my numbers above. I just recently try’d out an “airport run” and it did pay quite well, but can throw you into the boonies (i imagine) once in a while. I always use to Uber from the airport when I was corporate, and would tip well. So the potential is out there. I omitted it from mine, because I know not everyone lives within 20 minutes of a Major airport. (Probably closer to 50% increase if you’re in a big tourist town).




Grub hub / door dash / see less / Uber eats = Next one I’m going to try out. Maybe in March, unless I get swooped up by a company before then. From what my friends wife told me. You typically can work “just lunch - 2-3 hours” and almost always can pull in a $50 order. (We have a LOT of businesses in Michigan that order in food..”too cold sometimes”. So you can luck our w/ one $100 order and get a $10-20 tip, knocked out in 30 minutes. But she said you can also get the small onesie twozies orders, that are only $5 bucks for a small run to a Wendys. Again, its a numbers game. You take the good w/ the bad and it should all come out in the wash.

I’ll report back my findings when I pilot this soon. Hopefully the feedback I relayed about (GrubHub) is accurate to my up-coming experience.

[~bs]

gig = low commitment
part time job = some committment
side business = some committment
full time job = most committment

I see nothing wrong with it to make a few bucks on the side. The real issue is when people can't find something more stable and with benefits, and they rely on it full time.

For me personally, I have a side business that I do enjoy, but recently have been less active. The job I took last year is more demanding , but pays well. Just my performance bonuses are more than I spend in a year, not counting my salary which is also really good. So it doesn't make sense to spend extra time on a business when the amount I'll be taxed on that income is probably close to 60%.

[~bs]

That being said! I have started to try out Uber/Lyft. They have been an interesting & simple way to make some side dough!

Actually I lucked out the other day, and drove the owner/CEO of Hungry Howies Pizza to the airport. She was super sweet, and we had a lot in common (I didn’t know who she was until half way through the ride). She wound up tipping me $100 and told me, “I should open my own business. It’s worth the risk and you have the right personality”. Which I took to heart, especially because I had just resigned from my corporate job not even a week earlier.

Takeaway from Uber/Lyft :
Average Revenue = $19/hour including typical tips - driving in the Midwest Area of MI (about halfway between Detroit & Ann Arbor). On weekday mornings Only 8am - 11am. Another metric that has been pretty accurate, is between driving to fares, dropping them off somewhere else, and eventually getting back home. I’ve noticed the income is close to about $0.50 - $0.90 per mile (tip depending).
*note - in my area, I think Uber pays a straight $0.60 per mile to drivers. But I adjusted it slightly, because you will not spend 100% of the time driving fares, and sometimes you earn much much more from driving during Surge prices or if you get a great tip.

Highest Revenue = Some times I’ll get stuck in peak fares for a few hours. Maybe about 30% of the time the pay is higher than the $19 avg. Ive had a few days where I have driven for 2.5 - 3 hours, and made $75-90. ($30 an hour would be a good estimate for higher side).

Lowest Revenue = Of all the low times, I don’t think I have made less than $14.75 an hour ever. I’d say the low avg = $15 an hour. And they’re not that common.

Average Gas Cost = Probably equals about $2.00 -3 and hour in my 13 Malibu. Or Close to 10-15% of cost - w/ some variability.

Overall = For what I have been using it for (approx $300-500 bi-weekly spending money @ 15 hours a week ish) it has been Great! Takes the Sting out of “no income” and “recently w/out a job” while getting me active, talking to people (when they want to), and helping folks out while making a few bucks. It’s a numbers game,just like being a server. Tips WILL make the day profitable no matter what, but if they don’t come in right away (sometimes don’t get the tips for a week, when someone logs back into the app) Surge fares in the area will allow you to make up a lot of ground. Or the companies perks/incentives (drive ~30 trips in a week & you’re guaranteed @ least 10 dollar’s per fare or better - example of a common one).

*Taxes = Haven’t had to file the 1099 yet, but as a contractor you will be able to write off all of your mileage. I think the IRS going rate is like $0.55 per mile ? Which should basically offset your fuel costs + reach a small tax advantage (unless you have a ton of repairs).

*Perks = You don’t have to drive w/ Uber Very long, to be eligible for free tuition @ university of Phoenix towards a bachelors. (Online degree, but you should be able to achieve this by driving Uber part time for only a few months or full time for much less than that). This was a huge perk for those looking to earn something, while trying to invest in their career market ability.

*Tip - If you live near an airport. You can pretty much add in 20% safely to my numbers above. I just recently try’d out an “airport run” and it did pay quite well, but can throw you into the boonies (i imagine) once in a while. I always use to Uber from the airport when I was corporate, and would tip well. So the potential is out there. I omitted it from mine, because I know not everyone lives within 20 minutes of a Major airport. (Probably closer to 50% increase if you’re in a big tourist town).




Grub hub / door dash / see less / Uber eats = Next one I’m going to try out. Maybe in March, unless I get swooped up by a company before then. From what my friends wife told me. You typically can work “just lunch - 2-3 hours” and almost always can pull in a $50 order. (We have a LOT of businesses in Michigan that order in food..”too cold sometimes”. So you can luck our w/ one $100 order and get a $10-20 tip, knocked out in 30 minutes. But she said you can also get the small onesie twozies orders, that are only $5 bucks for a small run to a Wendys. Again, its a numbers game. You take the good w/ the bad and it should all come out in the wash.

I’ll report back my findings when I pilot this soon. Hopefully the feedback I relayed about (GrubHub) is accurate to my up-coming experience.

not sure if you filed taxes yet, but that might be an eye opener. Gig employment probably means schedule c business. You're looking at having to pay state sales tax (depends on your state). 15.3% or so medicare/social security tax, federal tax, and state taxes. I'm not saying it's not worth doing, especially if your income tax bracket is low.... But if you already make middle class income, expect to take a shellacking come tax time.

Off the top of my head, in my state, say I made $50k regular income and chose to make another $10k gig income. I'd get taxed 4.7% sales tax, then 22% federal tax, then 15.3% med/social security tax, then 7% state income tax on the gig income. Literally almost half of the income would get taxed away. When people look at average tax rates from a regular job, they don't realize how insidious all the layers of taxation can be, especially since your employer pays half of the medicare/social security tax and income not subject to sales tax. But someone making extra money with a part time "gig" or business should realize it.

[bjl584]

i think it serves as a good opportunity to make extra money.
I wouldn't want to rely on it as my sole source of income. Maybe in a pinch, but not as part of a long term plan.

[Smallsteps]

i think it serves as a good opportunity to make extra money.
I wouldn't want to rely on it as my sole source of income. Maybe in a pinch, but not as part of a long term plan.

This is how I feel as well.
I have seen and heard all sorts of different $ amounts when looking at a few of these options. Most people that I personally have known did not make the amounts that was "suggested" in the guesstimates.
Many will make it sound more lucrative then what it comes down it may be the demand for ( insert gig here) of a certain area varies greatly. Location location location is a big part of how much can be made on many of these services.
I have seen so many naive people start after some story of someone making a great connection to person while driving or some huge tip but often get disillusioned that the amazing opportunity or whatever did not materialize instantly.

I have no problem with anyone who puts in the effort or even tons of hours ( gigs are not following work hour labor laws, a regular job would) maybe doing a few different gigs at a time.
The reality for some is they want this "gig" really want to make their own schedule and level of effort and will result in many different results. Honestly those i have known of that tried and failed at it, expected great results without much effort.
I think after reading many articles or reviews, we are seeing people for various reasons that are trying to make this a main income and it is not working out.


I often wonder how many gig workers will end up with tax issues. My guess is many are simply not reporting or thinking of all the layers of tax that -bs lays out below.
In fact a few people I have seen may have started with ( for example) dog walker app then basically made the connections to a few clients then cut out the (middleman) app and kept walking dog under the table for cash.
Perhaps that is why some states are looking at the classification of jobs so the companies would be responsible to pay layers of taxes for these folks.
Many of the taxes are my guess simply NOT being paid.


[quote] Off the top of my head, in my state, say I made $50k regular income and chose to make another $10k gig income. I'd get taxed 4.7% sales tax, then 22% federal tax, then 15.3% med/social security tax, then 7% state income tax on the gig income. Literally almost half of the income would get taxed away. When people look at average tax rates from a regular job, they don't realize how insidious all the layers of taxation can be, especially since your employer pays half of the medicare/social security tax and income not subject to sales tax. But someone making extra money with a part time "gig" or business should realize it. [ quote]

[disneysteve]

The reality for some is they want this "gig" really want to make their own schedule and level of effort and will result in many different results.

Exactly. One of the biggest advantages of gig work is that you can do it when you want to, whenever you want to, for as much or as little as you want to. Have a day off from work? Turn on your Uber and Lyft apps. Kid has a sleepover tonight. Fire up Uber Eats and deliver some dinners.

[TexasHusker]

My vacation rental thing began as a side job. But when I ran the math I figured out I could make a good living off of it with more property.

We have more opportunity in this country than any time in history. It’s an amazing and unique time.

[Smallsteps]

Exactly. One of the biggest advantages of gig work is that you can do it when you want to, whenever you want to, for as much or as little as you want to. Have a day off from work? Turn on your Uber and Lyft apps. Kid has a sleepover tonight. Fire up Uber Eats and deliver some dinners.

In that context it sounds great and I believe that was the purpose when founders thought the gig up.

However What has happened is often different. Many I have met sometimes are NOT working normal w-2 jobs for various reasons and trying to make a living with these gigs.
Then government wants to get involved ( missing out on their cut) and regulate often with unintended results like a law in California that limits work people can get from freelancers before having to reclassify as a regular employee and pay any taxes/ fees involved. Law was aimed at Uber/ Lyft but hit part time journalists and other freelancers that many companies simply decided not to buy work from those in California.

I do not believe these were meant as a job replacement only a supplement income. Just like SS was meant as a supplement retirement but for many ends up as their MAIN retirement.
Perhaps some people could not find a standard w-2 job or KEEP one they liked or were not hired ( too many possible reasons to list) or could only qualify for low wage positions and think from a couple of stories of great tip possibilities, they can do better with a gig.
Perhaps they have other commitments.... I saw a video about a woman delivering food for two different apps and even driving Lyft while taking a disabled child with them.

[ua_guy]

It's contract work; being paid on a 1099 isn't new and has existed for a long time. People in upper incomes can make this work really well if they have a skill that allows them to bill hundreds of dollars per hour for their services. The seemingly exorbitant rate covers wage, taxes, healthcare, retirement, time off, and uncertainty of when the next gig might land. People who manage this well can make a great living and have a balanced life.

The gig economy is the shift of regular wage employees from W2 to 1099. Pay them the same crappy wage, reduce liability. The value-added upsell is they work when they want, no commitment. A lot of the gig economy is NOT retirees walking dogs or delivering food for something to do in their spare time. It's people who are working all sorts of hours and taking risks to make a buck more than they would have at Taco Bell. It's people supplementing W2 incomes that don't support a living wage, working extra hours. It's low-hanging fruit for a lot of companies to skirt labor laws and liability by calling their staff contractors instead of employees. It's the undoing of unions and workers rights, but hey, take Tuesday off, nobody cares, there's another guy with a busted Dodge Caravan and a hungry kid at home who will drive you to the airport.

It has its place but the direction it's going is obvious.

[disneysteve]

The gig economy is the shift of regular wage employees from W2 to 1099. Pay them the same crappy wage, reduce liability. The value-added upsell is they work when they want, no commitment. A lot of the gig economy is NOT retirees walking dogs or delivering food for something to do in their spare time. It's people who are working all sorts of hours and taking risks to make a buck more than they would have at Taco Bell. It's people supplementing W2 incomes that don't support a living wage, working extra hours.

There's certainly some truth to that, but many of the gig economy jobs didn't exist, or at least not to this extent and in this form, 10 or 20 years ago. Technology has enabled most of this. If I wanted to drive professionally before, I had to get into the taxi or limo business. It wasn't something I could just do on my own quickly and easily on my own schedule.

It has probably replaced some things like restaurants hiring their own delivery drivers and instead using GrubHub or UberEats. Though at the same time, a lot of restaurants now offer delivery that never did before, so it's expanded services rather than shifting them in those cases. At least around here, the places that always did their own delivery still do. It's places that never did that now offer GrubHub.