Ultimate Gig

Flexibility, Freedom, Rewards

John T. Fleming, Lauren Lawley Head

• Publisher: Emerald Publishing Limited
• Year: 2021
• ISBN:
  9781839828621
• Topic: Business
• Subtopic: Marketing
• Index: Business

The gig economy can be viewed as the fuel that lit the fire of change in economies throughout the world. Flexible work grew out of a cultural shift in how we defined how we wished to work. The gig economy also grew out of a need, a need to earn more to keep pace with the inflation that nullified expected gains in purchasing power as wages increased. We no longer define work as related to the brick and mortar buildings that housed the traditional 9 to 5 job. Perhaps, the office-centric era is over as many companies have now made decisions relative to how and when their employees can work. Work from home is no longer a wish; it is a reality, and the gig economy has been the fuel that has helped companies realize new and better ways to engage labor and serve consumers.
The future has arrived! The marketplace is favorable to new ways to purchase products and services. Gig opportunities will continue to grow as a meaningful way to earn income. The ultimate gig is ultimately the one that best matches the gig seeker's definition of what matters most.
Our ultimate motivation for taking on the work of this book, this research project, is rooted in a belief that the gig economy is helping to define a new reality; flexibility and freedom in how work is done can be achieved. We believe in the free enterprise system. When we focus on contribution, we best explore the possibilities that improve the quality of any product or service and the quality of all the lives we touch.

1

Welcome to the Gig Economy

John T. Fleming and Lauren Lawley Head

The “gig economy” is a popular topic that has the trappings of a new phenomenon. The phrase is often used in the context of prominent online platforms, such as Uber, Fiverr, and TaskRabbit, which make it easier for clients and gig workers to find each other. These new kinds of technology platforms readily connect individuals in need of personal services with those who will provide them. Accompanied by economic shifts and changing attitudes, these technology platforms have fueled the advancement of the gig workforce.

– ADP Research Institute, Ahu Yildirmaz, Sarah Klein, February 2020.

The way we work is changing, and it has been changing for more years than we may have been counting. The future is always coming faster than we think!

Thanks to advances in technology, we can now take more control over how we work and, consequently, the way we live. We can work flexible hours from a location of choice, earn a side income, or build a career from freelance work. As technology continues to evolve, the options will continue to expand for both work flexibility and the rewards received for time invested, thus allowing for a more robust definition of work.

What started out as subtle waves of change have grown to be seismic shifts in the structure of the world of work. Employers and workers alike have access to new paths for delivering value to the market. If these changes have not reached you personally, it is just a matter of time.

If no one has said this to you yet, let me be the first: Welcome to the gig economy.

It may feel new, but the gig economy has been around for a long time. The word “gig” has been used for many years by musicians, who referred to their part-time, temporary performance work as gigs. But until recently, few people outside the music industry would say they worked a gig. They may have had a part-time job, but those were very much like full-time jobs, except with fewer hours and generally lower wages. Part-time jobs typically required spending a fixed amount of time working at a specific location. People who worked them usually did so solely for the extra income, and there was virtually no entrepreneurial spirit involved.

The financial reasons for working part-time are as strong as they ever were and undoubtedly are one of the motivations for working a gig. But there is much more to gig work than the opportunity to earn part-time income. The ability to work when you desire fulfills a need, such as making it easier to juggle work and childcare. Younger generations consider flexibility essential. The ideal job, or the way we work, is no longer confined to a definition associated with the hours of 9 a.m. to 5 p.m. Millions of people are now attracted to the many choices offered by companies that we describe as being gig providers. These gig-providing companies have changed the way we view work.

As we began our study of the gig economy, we found impressive perspectives and estimates from many sources.

• 57 million Americans involved
• Contributing $1.4 trillion to the US economy
• 40+% of the US workforce is currently involved
• Up to 80% may be interested
• Growing at a rate of 8.1% per year, while the traditional workforce growth is 2.6% per year (pre-COVID-19)

Assuming the growth continues, the gig economy could contribute to a workforce dominated by independent contractors within the next decade, creating a growing interest in flexible income opportunities.

The terms “gig economy” and “sharing economy” are often used interchangeably and have rapidly become a part of mainstream business conversations; however, they are very different in many ways. The sharing economy is not the focus of this book. In the gig economy, the focus is on flexibility in how work is done. In the sharing economy, an asset is often used to activate a gig, the perfect examples being offering a home or even a room as a short-term rental property or using a car to provide a delivery or transportation service.

Gig economy companies such as Airbnb have become competitors to hoteliers. The hotelier must satisfy stringent standards of expectation, even rules, laws, and regulations, not to mention the enormous investments in real estate and construction. Meanwhile, there are now millions of property hosts who represent a new chain of entrepreneurs who use the asset of a home to accommodate those interested in a place to stay and perhaps a home-cooked meal to go with it. The story is similar for Uber, Lyft, TaskRabbit, Thumbtack, Fiverr, Upwork, and so many others. These companies do not make significant investments in assets. Instead, they use technology to connect expertise and assets to consumers or potential clients through independent contractors recognized as gig workers.

As we dug deeper into understanding the gig economy, we began to see that it may represent far more than the opportunity of providing people with flexibility, freedom, and fair rewards for the effort they invest. Adam Smith, the 18th century philosopher often recognized as the father of modern economics and a major proponent of free markets, posited the belief that “left to their own devices, people will always act in their self-interest, and those interests will inadvertently level out to create the best outcome for all.” Smith felt that a free marketplace would serve to support the creation of better and higher quality products and services. We see these ideas at work within the gig economy. Many gig economy providers and workers solicit almost immediate feedback from their customers. Consumers rate their service providers via an app that makes a simple request once the transaction is complete: rate the service provider with one to five stars. There is no waiting for the traditional quarterly, semiannual, or annual performance appraisal typical of conventional jobs. The service, product, and the worker are evaluated immediately. In many cases, the gig provider also rates the consumer. This simple process serves to encourage higher quality all around.

Gig work opportunities and the choices available are not limited by specific and designated hours one may have or the need to be physically present at a fixed facility in order to do the work. The gig worker participating in the Etsy global online marketplace (etsy.com) can be located anywhere in the world and market their products around the globe through the Etsy platform. Etsy has more than 1 million small business owners/independent contractors involved and has become one of the most popular global online shopping malls. Etsy ads can now be found on many national and global television channels. Etsy is just one example.

The gig choices available are very numerous. Our research reveals that there are thousands of gig opportunities, perhaps many multiples of such a figure. The impact on labor statistics is staggering and game-changing. More than 40% of the current labor force is involved in some type of gig, and we are rapidly approaching a 50% participation rate within a few years here in the United States. We find estimates that as much as 80% of the current labor force may be receptive to gig work.

What are the primary reasons for the growing interest in gig work? And why is this ever-increasing interest more than just another part-time income opportunity with a new and fancy label? Our quest for answers led to some remarkably interesting books and articles on the subject. One book, The Sharing Economy, published by the MIT Press in 2017, impacted our thinking about the relevance of the gig economy. The author, Arun Sundararajan, Harold Price Professor of Entrepreneurship and Professor of Technology, Operations and Statistics at New York University's (NYU) Stern School of Business, has done extensive research on the sharing economy and probably interviewed more sharing economy founders, co-founders, and chief executive officers of new innovative companies than any other author with whom we are familiar. In his book, Sundararajan reminds us that there are trends to be aware of:

…personal assets, brick and mortar institutions, hard currency, salaried, permanent jobs are on their way out and virtual exchange, and flexible on demand work are in. The ‘crowd’ is replacing the corporation at the center of capitalism.

The Industrial Revolution created significant wealth for a small percentage of the population. This era was known to be asset-heavy. In the new economy that is emerging, companies that we put into a gig economy category are asset-light, representing a significant shift in how products and services are marketed and how consumers are engaged. In Sundararajan's book, we are also reminded of a seldom exposed stat that becomes particularly important in understanding the gig economy phenomenon.

At the turn of the 20^th century, almost half of the compensated U.S. workforce was self-employed. By 1960, this number shrank to less than 15% because of the Industrial Revolution. It is also highly likely that the self-employed constituted more than half of the compensated workforce at some point prior to 1900. For the 50 years since 1960, the percentage of self-employed in the U.S. economy has been approximately 10%.

It now becomes evident that our economy has been dominated, for over 100 years, by large corporations and a very traditional form of work – the nine to five. In many ways, Sundararajan's book supports our thoughts relative to defining the gig economy as much more than making part-time work more appealing via the use of technology.

Dr. Paul Oyer, the Mary and Rankine Van Anda Entrepreneurial Professor and Professor of Economics, Senior Associate Dean for Academic Affairs and Senior Fellow, Stanford Institute for Economic Policy Research, also influenced our thinking through his papers and lectures about the gig economy. Oyer is also a Research Associate with the National Bureau of Economic Research and the Editor-in-Chief of the Journal of Labor Economics. In 2016, Upwork retained Professor Oyer to conduct research on the Independent Workforce in America. Upwork is world-renowned for its ability to connect a company's needs with a freelance professional. The company and freelancer do not need to be near each other; in fact, they can be in different countries. Upwork has served over 5 million businesses that desired to connect with a freelancer who could fill a short-term need. The study conducted by Oyer remains available online and provides incredible insight into what we sought to better understand in the publishing of this book. The following is what he shares in the opening paragraph of the research done for Upwork:

The composition of the US workforce is changing as demographic shifts impact labor supply and demand, interstate commerce and international trade grow, and technology makes it easier for people to work independently. The independent workforce (“I.W.”) has grown to become a sizable share of the American labor pool and is widely expected to grow even more significant in the coming years. This growth has created (and will continue to create) considerable benefits for the US economy, both for the I.W. itself and the buyers of their services.

We refer to the I.W. as the gig economy.

The study was focused mostly on independent workers who were engaged in freelance work of a professional nature. The study serves to broaden an understanding of how broad the gig economy has become, who is involved, and their reasons for involvement. In reviewing the research conducted by Oyer, we were led to a survey conducted each year since 2014 by Upwork and the Freelancers Union titled Freelancing in America (FIA) https://www.upwork.com/i/freelancing-in-america/. The most recent report was issued in October of 2019. This report is excellent reading for business leaders who engage independent contractors for any portion of their labor force. Freelancers who use a platform like Upwork to connect with a business that needs their services are well paid in comparison to their counterparts earning at a median rate of $28.00 per hour, which is more per hour than what 70% of workers earn in the overall US economy. For the first time, the survey reported that as many freelancers said they view freelancing as a long-term career choice as they do a temporary way to earn money. In addition, the share of those who freelance full time increased from 17% in 2014 to 28% in 2019.

If, as we believe, the gig economy phenomenon is more than part-time work appeal, we may very well be experiencing a return to entrepreneurship as a preferred way to work. When thinking of becoming an entrepreneur, the cost and associated risk of an entrepreneurial pathway usually required a considerable investment of capital. For small businesses, effective marketing has always been challenging, expensive, or prohibitive. Granted, the direct selling model of distribution of products and services by independent contractors has been around for over 100 years, and so has the franchising model even though its popularity and rapid growth did not occur until the 1980s and 1990s. Getting started as a direct seller is relatively inexpensive, and support is generally supplied via free to minimal investment in initial training. A franchise model requires a more significant investment; however, both models work for the entrepreneurs involved because engagement provides affiliation with a brand and a proven process for business success.

Now comes the gig economy. With, generally, no upfront investment, possibly a reasonable subscription fee, a gig worker can become a microentrepreneur and engage the often very sophisticated support of a gig-providing company. The gig economy label represents new terminology but more of an evolution versus an invention.

We describe this evolution as a phenomenon because the asset of flexibility in how work can be done via gig work is also built upon trust! When we as a consumer choose to rent a room or couch in someone's home over the brand identity of a hotel chain, we are trusting considerably basic instincts associated with a belief in the goodness of people and the possibility of enjoying a more personal experience. The same is true when we connect with a transportation service that connects us with a car and driver that will have very little signage. The car might be new or one that is a few years old; hopefully, it is clean, but it may be dirty. Once again, we trust our fundamental beliefs in the brand and the intent of another person to provide a quality product, service, or experience. The same is true of the freelancer who performs a very sophisticated professional service that a company has never used before when it needs short-term assistance instead of engaging a long-term employee.

Something else is happening here. Labor is being provided on demand; therefore, efficiency is gained for all involved. Assets utilized in the gig economy are owned by the crowd versus a select few. Labor is used, perhaps, more equitably and definitely more efficiently. The company does not have to engage in long-term commitments. Gig workers consider the ability to quit work when they want to, even terminate the relationship when they want to, an asset, not a negative. The use of instant performance ratings through technology serves to keep a focus on quality and self-regulation. The consumer wins as quality improves. Pricing also becomes more competitive because more people are involved in delivering products or services. The growth of the gig economy...

Table of contents

• Cover
• Title
• Copyright
• Table of Contents
• List of Figures and Tables
• About the Author
• About the Editor
• Preface
• Acknowledgments
• 1. Welcome to the Gig Economy
• 2. An Academic Perspective
• 3. Motivations for Working a Gig
• 4. Gigs Redefine Entrepreneurship
• 5. How Technology Is Shaping Gigs
• 6. Direct Selling – The First Gig?
• 7. Women and the Future of Gigs
• 8. Defining the Ultimate Gig
• 9. Maximizing the Potential of a Gig
• 10. A Perspective on Challenges and Ethics
• 11. Ultimate Gig Research Findings and Insights
• 12. Game-Changers
• Epilogue – Glimpse of the Future
• Resources & References
• Index