Inside The Gig Economy
They drive you to the airport and pick you up after a night out at the bars. They rent their homes to you when you vacation and fix things like leaky faucets and running toilets in yours. They deliver groceries and food to your front door or office. They are the members of the gig economy, and they’re playing an increasingly large role in our daily lives.
The “gig economy,” or “sharing economy,” are terms coined after the financial crisis of 2008 to describe platforms that employ temporary workers to provide a variety of services. Companies like Airbnb, Lyft, Uber, TaskRabbit, and Doordash provide delivery services, ridesharing, rentals, and assorted odd jobs to their customers. Their popularity is growing, too: a recent Pew study found that nearly 20% of Americans earn some income through these platforms.
So, who is making the most money in the sharing economy? How much are people making on average? What are the best platforms to maximize your earning potential? Here, we’ll discuss the nuts and bolts of the sharing economy and break down earnings by platform.
Gig Economy: Key Findings
Before we discuss individual platforms and users’ average earnings among them, there are some basic takeaways from the data as a whole. First, about 85% of gig economy employees earn less than $500 per month on their platform. While this may seem startling (after all, $500 per month is hardly a living wage), it is important to note that many of these people are using these platforms for supplemental income, not as a main resource.
On average, Airbnb hosts make nearly triple the average income of other gig economy workers, with nearly half of hosts making $500 per month or more. While Lyft and Uber drivers make approximately the same amount, it’s interesting to note that drivers who work on both platforms tend to make slightly more through Uber. For odd job platforms, TaskRabbit workers come out far ahead of those on Fiverr, making about three times the income of their counterparts.
Gig Economy Companies: The Major Players
There are several major companies that dominate the gig economy in varying sectors and industries. Here, we’ll provide a rundown of who’s who among platforms:
- Airbnb allows hosts to rent their property on a short-term basis, most often for vacations.
- Doordash provides on-demand delivery from a wide variety of local restaurants.
- Postmates is a general delivery service and provides delivery from local restaurants, convenience stores, liquor stores, and more.
- Fiverr is a marketplace for goods and services where sellers set their prices and buyers decide based on their budget and needs. They provide services for a variety of needs, from writing and translation to virtual assistants to psychic readings.
- Like Fiverr, TaskRabbit is a platform that facilitates various services. Customers describe the task they need accomplished and are matched with a Tasker, who completes the task. On average, TaskRabbit Taskers make significantly more than their Fiverr peers, though tasks tend to involve physical as opposed to online labor.
- Lyft and Uber are ridesharing services that offer comparable products. Uber is generally more widely available, but Lyft is continuing to expand its service area.
- Getaround is a car rental service that allows customers to rent vehicles from private owners.
- Etsy is an online marketplace for artisans and craftsmen to sell their work.
Gig Economy: How Many People Depend On This Industry?
Approximately 8% of the population regularly earn money through a gig-economy platform, according to the Pew study. Of those people, 56% considered the income they earned essential or important, while 42% said it was nice to have. 49% of those who considered their income from the sharing economy important or essential earned money by completing online tasks, while 32% worked in ride hailing and 25% performed cleaning or laundry services.
Overall, those who depend on the sharing economy for most or all of their income tend to value the ability to control their own schedules the most, but may also have more fun with their work. While they tend to have lower household incomes on average, many consider themselves to be independent contractors and may be more satisfied with their work lives than they would be in more traditional positions.
Gig Economy: How Much Are People Making?
Let’s break down income by platform, in order from greatest to least average monthly income:
- Airbnb hosts make the most by far, with an average monthly income of $924. This is likely due in part to the relatively high-ticket nature of property rental compared to other goods and services.
- In a distant second comes TaskRabbit, with an average monthly income of $380.
- Lyft follows close behind at $377 per month on average.
- Lyft’s competitor Uber trails slightly behind at $364 per month, though it’s interesting to note that drivers who work for both platforms tend to make more money through Uber than through Lyft.
- Delivery service Doordash places fifth with an average monthly income of $229.
- Competitor Postmates follows with an average monthly income of $174.
- Next comes craft marketplace Etsy at $151 per month on average.
- Fiverr, a competitor of TaskRabbit, lags far behind its counterpart with an average monthly income of $103.
- Car rental service Getaround places last, with the average monthly income being just $98.
Gig Economy: How to Maximize Your Income
Do you receive income through one of these platforms, whether for a significant portion of your income or as a side gig? If so, it’s important to be smart about your work and keep detailed records of everything from your expenses to your mileage to your utilities (especially if you have a home office). Keeping accurate records will help you make all the applicable deductions during tax season.
Choose a platform that will pay you well for your chosen field of work; there is some data to support the idea that gig economy workers often work for less than the market rate. While there are other explanations for why income for so many gig economy workers averages less than $500 per month, it is nonetheless important to look out for yourself as an independent worker. Platforms usually have protections for independent contractors in place, so it is a good idea to stay within the platform to help ensure that you’ll be paid.