Gig Economy: Pros and Cons of Gig Work

Gone are the days when your only source of income came from a job. Now you have the freedom and flexibility to use your skills to make money on your downtime or create a new full-time gig. The gig economy is increasing at a rapid pace. In fact, according to Upwork, nearly 56.7 million Americans freelanced in 2018. So, if you’re contemplating starting a side gig of your own, here’s what you need to know about working in gig economy.

Pros of Working in the Gig Economy

The gig economy offers an abundance of opportunities to earn extra cash or a full-time living. It can open the door to your creativity or provide a way to achieve your financial goals. Here are some other pros of working in the gig economy.

Flexibility

Working in the gig economy provides freedom and flexibility that other income opportunities may not. Those who choose to pursue gig economy employment and make a career out of freelancing have the luxury to determine their own hours, work location, clients and sometimes even rates. They’re able to shape their entire professional career around their personal preferences which enables them to pursue some of the aspects of their lives that may not provide fiscal reward. From mothers who want more time with their children to individuals who want to travel the world and maintain enough income to foot the bill, freelancing enables many professionals to pursue their passions and accommodate their preferred lifestyle.

Working in the gig economy allows you to become your own boss and live by your own rules. With the advancements to technology, you can connect to clients around your city or even the world. No longer do you have to punch in and out. With this type of employment, you can simply complete a task on your own time or log into an app to market your skills to clients. You’re in complete control of your time clock and the tasks you wish to complete.

Harry Campbell, founder of The Rideshare Guy and author of The Rideshare Guide , says, “The flexibility is by far the best part about working in the gig economy since you can literally work as much or as little as you want. I’ve worked all sorts of jobs over the years but it wasn’t until I started driving with Uber and Lyft that I realized just how flexible the gig can be.”

Alternative Career Choice

When Washington D.C resident Charlie Heck lost her government job, she turned to the gig economy for supplemental income. Instead of heading back to work, she started petsitting and walking dogs for high-end clients in Washington D.C. during her downtime. She established clients for her multimedia freelancing gig, which lead to a full-blown small business. She adds, “It was quite a balancing act in the beginning but through the trust I established with my pet clients, a few eventually became multimedia clients and connections as well.”

Like Heck, many professionals are choosing to transform their part-time gigs into full-time sources of income. According to MBO Partners State of Independence In America 2018, 3.3 million independent workers made over six figures. Depending on your skill set and the side gig you choose to pursue, working independently can offer significant monetary rewards.

For example, some of the highest paying gigs include artificial intelligence and deep learning, blockchain architecture and robotics, which all make over $70 an hour.

Variety of Work

Working in the gig economy gives professionals the opportunity to work on a broad spectrum of projects and clientele. Instead of working with one boss on a regular basis, your projects require you to juggle multiple clients and deadlines and often encourage your creativity. This gives gig workers the ability to enhance their skills and continue to stay current with the industry they work in.

If you enjoy tasks and projects that’ll challenge your creativity and problem-solving skills, the gig economy may be the best place to exercise your talents.

Working in the gig economy also gives you the ability to build your portfolio and resume. It allows you to connect with people you may not have otherwise connected with in your professional community. It opens the door to endless possibilities you may not have been aware were available.

Inexpensive Option for Businesses to Hire Talent

Many companies are seeking freelancers as an inexpensive alternative to full-time employees. This gives gig workers the opportunity to work with a variety of big companies without the commitment of a 9 – 5 position. Freelancers give companies fresh creativity and the ability to pay these gig workers what they’re worth.

Cons of Working in the Gig Economy

Even though working in the gig economy offers a lot of freedom and flexibility, it comes with a lot of hard work and responsibility. Here are some of the cons of working in the gig economy.

Lack of Benefits

Employer benefits are one of the reasons many professionals seek job security with a full-time position within organizations. Most companies provide health care, life insurance, company-sponsored retirement planning options and paid time off. When you work full-time in the gig economy, you’ll need to be creative when it comes to funding a health care plan or your savings for retirement.

Many freelance workers don’t get paid when they’re not working. So, if you plan to take a vacation, you’ll need to budget for the allotted time off. You will also have to pay your own taxes. When you work for a company, they’ll generally take care of tax payments, but when you work for yourself, you will have to set aside a portion of your income to pay Uncle Sam.

Working in the gig economy requires more responsibility and thought than working for an employer. With the freedom of freelance employment comes a lot of responsibility and a large commitment to taking your future into your own hands.

Inconsistent Income

Kevin Ha, side hustler and blogger at FinancialPanther.com, has spent the past few years partaking in almost every side hustle you can imagine. He shares, “Gig work comes with inconsistent income since you only get paid when you’re doing gigs. Unlike a traditional job where you’re guaranteed an hourly wage for the number of hours you work, gig work income is not guaranteed and can fluctuate up and down depending on how busy you are.”

Depending on the industry and gig, your income may vary throughout the year. It’s possible to find consistent clients, but you should be prepared for an inconsistent stream of income.

Burnout and Exhaustion

Brandon Ballweg, founder and editor of ComposeClick, says, “Working multiple gigs, such as Uber, Lyft, Amazon Flex, and Grubhub, can put wear and tear on your energy, car and lifestyle. You need to prioritize time off so you don’t suffer from burnout.”

If you work multiple gigs or have a full-time job and a side gig, you have to take the time to relax and refresh.

Limited Guidance

Ha continues, saying, “Since gig work is done on an independent contractor basis, you don’t have a boss or a company teaching you how to do your work efficiently. In many cases, you’re given instructions on how to use the apps or equipment and then essentially told to figure out the rest on your own.”

It’s up to you to succeed in the gig economy and to navigate your own path to success. You have to figure out the ins and outs of the industry you’re venturing into.

Takes Longer to Gain Experience

Because it may take you longer to build up your clientele or navigate the industry of your choice, it can take you longer to gain experience. For example, if you decide to become a freelance writer, it may take you a few years to find consistent clients. Whereas if you worked as a professional writer for a company, you would receive experience with each new assignment, and in turn would build your clientele. It may take you a little longer to achieve success when starting your side gig.

Increased Responsibility

Campbell says, “A lot of people get started in the gig economy looking to make a few hundred bucks a week but what they may not realize is that since you’re an independent contractor, you’re also now running your own business. So, in addition to the income you’re bringing in, you need to think about things like paying estimated taxes, tracking your mileage and expenses, insurance and more!”

How to Succeed in the Gig Economy

If you’re ready to make the leap into the gig economy, surround yourself with experts in the industry who can help you succeed. You want to reach out to people who understand what it takes to make it in the field. Through connecting and engaging with these professionals you will begin to build a community of people you can trust and ask for guidance. They may also be able to refer you to jobs or gigs that they no longer have time for.

Also, take the time to enhance your skills. For example, if you want to be a freelance writer, take writing classes to sharpen your talents. The better you become, the better paying gigs you may receive. Prioritizing value and continuing to network are both great ways to help you succeed in the gig economy.

Bottom Line

Working in the gig economy is a great way to earn extra cash or even create the career of your dreams. However, it requires a lot of work and responsibility to make it more than a part-time opportunity. Before you quit your job to become a ride share driver, make sure you understand what’s required of a full-time gig worker.

Do you work in the gig economy? If so, what is the best part about your side hustle? We want to hear from you! Please leave your comments below.

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