November 3, 2016
What You Need to Know About Making Money With the Gig Economy
The “gig economy” comprises approximately 68 million workers who opt for a working lifestyle that emphasizes freelancing and flexibility over typical office work and contractual obligations. Sites like Uber, Etsy and TaskRabbit fuel the present gig economy, which touts autonomy, creativity and independence as selling points.
With economic growth in the US continuing to be very stagnant, it makes sense that many workers are embracing the gig economy. The prospect of becoming a driver, selling art on Etsy or performing a variety of assorted tasks is significantly more appealing to people who struggle with a rigid office work life or are unable to find a position.
The gig economy may be a fit for certain people — like artists or people in high-traffic areas who need of Uber drivers. There are a variety of caveats regarding the gig economy that you should be aware of:
Get Familiar With Uncertainty
At a conventional job, you receive a paycheck as scheduled, usually in the amount you’re expecting. Budgeting is much easier with a non-gig economy job, as you can actually project your monthly, quarterly and yearly earnings. The gig economy, on the other hand, is filled with immense fiscal uncertainty.
You should maintain an emergency fund when participating in the gig economy. Necessary expenses, like rent and food, are covered first and foremost, but an emergency fund should cover them for at least a few months. If your skillset is compatible with the gig economy, it shouldn’t take too long to find work, but there can be slow stretches.
Compare the Platforms
There are plenty of gig economy platforms available today. Sites like Upwork and Freelancer are popular, but there are dozens of other options available, too. It’s up to you to decide which one fits you best, based on flexibility and expected income.
For example, it’s good to know that Lyft takes the smallest share of ridesharing gig profits at only 20 percent. Other, similar companies like Uber take more. Also be sure to research local competition and accessibility because some platforms are not available in all states.
Believe in Personal Branding
Personal branding is immensely integral to finding success in the gig economy. As 68 million workers show, the gig economy isn’t a secret. You will be competing with others, whether it’s other similar artists on Etsy or other drivers in the area on Lyft and Uber. Consequently, it’s vital to separate yourself from competition within your gig-related niche, using all the resources the platform has in that separation.
For example, some Uber drivers go above and beyond by installing phone chargers for their customers’ convenience. It’s a small and inexpensive touch that can increase their ratings and keep their Uber standing positive. On Etsy, a gracious handwritten note to a customer with their purchase will warm their heart and increase the likelihood of them becoming a repeat customer. Small, personable tasks play a large role in molding a positive customer perception with potential future profit opportunities.
Advertising and marketing in personal branding is also useful for services like Etsy, where you can actively seek out and follow specific users. It’s not as effective for Uber or Lyft, where customers and drivers are matched automatically, but direct-to-the-gigger services can benefit from marketing on social media.
Although it may seem annoying at the time, having a boss set your schedule and check in on you provides a sense of ease. It reminds you that the business’ bigger picture is in the hands of someone else. In a gig economy, however, it’s up to you.
There’s no set schedule on a site like Uber, where you can login and work whenever you feel like it, but it’s your responsibility to work enough to pay your bills. In an unfamiliar gig economy, it can be tricky to accomplish, so it’s always best to under-project your potential earnings.
Another reality of the gig economy is that there will be some 7-day weeks or weekend-heavy work, especially when compensating for earlier slow times. The gig economy presents more flexibility on a daily basis, but if you’re unfamiliar with setting your own schedule it can become overwhelming.
The gig economy presents uncertainty, scheduling pressures and a need for effective personal branding, but as long as potential gig-ers are well aware of the caveats, they can succeed independently.
Image by Tran Mau Tri Tam