The Gig Economy: Understanding the Who, What, Why, and How

Gig work

The “gig economy” has become a buzz word in recent years and is often applied to the apps most of us are familiar with, such as Uber, Grubhub, and Instacart. For consumers, these apps are often aimed at making everyday processes more easy and efficient, be it an updated model for personal transportation or outsourcing the task of grocery shopping for individuals who are strapped for time. Examples like these have become an integral part of day-to-day life for many people, but they have also contributed to gig work’s reputation as being associated with low-paid, low-value, transactional jobs.

The gig economy is continually expanding but can seem shapeless as a result of poor data on who works these jobs and why they do so. In addition to Uber and Instacart, the gig economy also includes freelancers, consultants, and independent contractors, in roles ranging from private tutors and writers to web developers and PRN (in-home) nurses.

Free Trade Europa (FTE), an Atlas Network partner, working in collaboration with Future of Work Institute and #WorkAnywhere, noticed that the main voices in the debate concerning the gig economy belonged to politicians, companies, and media, all of whom lacked a widespread, comprehensive understanding of who gig workers are and what they think. The colleagues set out to create a more well-rounded picture of the current demographics of gig workers in Europe and understand how they feel about their work.

To gather data for the study, Free Trade Europa and allied organizations created a survey and shared it broadly throughout Europe. They also created a secure online platform where individuals could share their income and work history anonymously and interviewed a portion of the respondents. The survey—aptly titled “The Voice of Freelancers: Future of Work Study 2022”—received over 2,500 responses from gig economy workers across Europe.

The foundational demographic data revealed that the gig economy is widely spread across ages, tends to be male-focused, and a significant portion of gig workers are university educated (with over half holding a bachelor’s degree and/or a master’s and/or postgraduate degree). The most common types of gig work included consultancy jobs (30%), food delivery (30%), technology—including programmers and IT professionals—(25%), and building and construction (25%).

A range of survey questions assessing financial security of gig workers showed that close to a third (31.8%) of gig workers make at least the average European monthly salary, but a third (33.3%) of respondents also reported they don’t earn enough to pay their bills. One component that makes it difficult to effectively evaluate financial security within the gig economy is the wide range of how people are engaging in gig work. Close to half (44.1%) of respondents stated they have full-time jobs in addition to their work in the gig economy.

One question that received an overwhelmingly positive response was that 91.4% of respondents say they enjoy gig work, and 87.5% of respondents indicated that they either agree or strongly agree that gig work helps them develop experience and gain new skills. Over three-quarters (77.5%) state that working in the gig economy is a lifestyle choice rather than a necessity, and flexibility was ranked at the top of what most people enjoy most about gig work.

The study also highlighted some of the key concerns for individuals working in the gig economy. A significant area of concern is that being outside of traditional employment means that gig workers do not have the same access to social protection, benefits, insurance, and pensions. Accessing services within the banking sector can also be more difficult, as processes like securing a loan are often based on having a fixed employment contract.

More than anything, the study highlights the vast amount of variety that the gig economy brings: who is doing it, why they’re doing it, how often they’re doing it, and so on.

The European Commission estimates that over 28 million people in the EU currently work through digital labor platforms, and by 2025 it is expected to reach 43 million people. The COVID-19 pandemic has only increased the number of people who are demanding more flexibility in their work. The landscape of work is changing; traditional 9–5 employment arrangements are becoming less attractive and perhaps less relevant.

Gig work, in particular work that is skill-oriented, offers a unique ability to best match talent with an employer’s specific need. And operating in the digital sphere offers greater access to opportunity, transcending limitations of geography. Additionally, certain types of gig work can offer greater flexibility for people who might not excel in traditional workspaces—for example, due to a disability or mothers and fathers that have a more confined schedule.

Free Trade Europa and their colleagues predict that we will increasingly need to move in a direction that merges traditional full-time employment with freelancing. And this “blended workforce will need to be facilitated legally, technologically, and from a policy perspective.”

The growing reality of the gig economy offers both immense potential, and some challenges that will need to be thoughtfully addressed—particularly due to the nature of how varied gig work is. By starting off with a better understanding of who is part of the gig economy, and why, we are in a better position to harness the benefits of this new form of work, while also creating systems to protect the increasing number of individuals who are not part of the traditional workforce.

The study from Free Trade Europa and their colleagues has already gained traction through coverage in a variety of news outlets, and FTE plans to continue expanding the reach of conversations surrounding the expanding gig economy and what it means for Europe. The study was presented at a recent event in Stockholm. Glen Hodgson, founder and CEO of Free Trade Europa, said, “I was delighted to arrange and moderate this Nordic Summit to bring together thought-leaders, decision-makers, and practitioners in order to shape the future of work. It is vital that we harness this technology-enabled revolution in the labor market for the good of individuals, companies, and the economy as a whole.”

Nordic Summit
Photos from the Nordic Summit

About Free Trade Europa
Free Trade Europa is a non-partisan think tank based in Sweden that focuses on reducing barriers to trade and the expansion of a sustainable single market in Europe and beyond. They aim to reconnect the EU to policies supporting liberalization, free trade, and the rule of law, while maintaining a focus on innovation, the environment, increased transparency, and ethical policy-making while reducing bureaucracy.