2019 took some surprising twists and turns, each one more unpredictable than the last. It was a good year for the finance industry and consumers alike. As we start 2020, many in the workforce will increasingly set their sites on the gig economy.
Data from Nasdaq.com shows that by 2020, about 43% of the U.S. workforce will be freelancers looking for the next big gig or contract. Harvard Business Review estimates that 150 million workers in North America and Western Europe are working as independent contractors. Bottom line – the gig economy isn’t going away anytime soon.
In fact, these numbers are so strong that employers are going to have to start becoming more flexible or offering better benefits in order to retain the loyalty of their employees. There has been a shift in recent years that will continue throughout 2020 where Americans are doing what’s best for them, and not being held back by a sense of loyalty to a company.
Of course, there has been, and will continue to be, some resistance holding the gig economy back. For example, California’s new “anti-gig” law would reclassify many gig workers as employees, threatening their freedom and independence.
Or in Jersey City, where residents voted to bring in strict regulations for Airbnb and other short-term rental companies, which will most likely shrink the number of short-term rental listings in the city.
But despite these setbacks, not only is the gig economy on the rise, but contract work is also becoming more common. Many big-time companies are increasingly tapping into more “flexible” resources such as freelancers and contract workers. And gig-based enterprises are continuing to build entire infrastructures, assets and ecosystems to ensure the sector continues to thrive.
For example, you’ve heard of Uber and Lyft, where people use their own personal cars to provide rides. And they’re all connected through apps, where all someone needs to do is ask for a lift from their phone, and our modern technology handles the rest.
Well now the gig economy has taken that a step further with HyreCar, a platform that allows consumers to rent out their car to be used by Uber and Lyft drivers. And these people can earn up to $1,000 extra per month just by renting out their car to other gig economy workers. Studies show that about 40% of those who apply for Uber and Lyft don’t have a car that qualifies, but working with HyreCar would eliminate that barrier.
HyreCar also allows car dealerships to leverage their current infrastructure to target local drivers that need a vehicle for Lyft or Uber gigs, because they either have no vehicle, or don’t want to put excessive mileage on their current vehicle. With HyreCar, both individuals and dealerships can enjoy a comprehensive program that allows them to turn their current vehicles into profit.
The gig economy continues to evolve and put forth new ideas that we never before knew we needed. As we can see in the example above, we now have the gig economy serving the gig economy.
So what kinds of things should we expect to see from the gig economy in 2020? HyreCar CEO Joe Furnari gives his take:
- In the new year, gig enterprises will find creative ways to work with traditional companies instead of competing against them (especially in the rideshare space.)
- The new trend of legislation being passed to support freelancers will help ensure that contract workers get paid on time and even have benefits.
- Having transportation your way will be the new consumer model as people will use a variety of transport options from Uber, pubic transportation or even owning or sharing a vehicle, based on what they need at the time.
- Car ownership and car sharing will be big in 2020 as both find their place in the economy and find ways to get along.
- Employers will be hiring more gig workers than traditional employees to decrease overhead cost.
But despite all these positives, it is the gig economy workers that are most pessimistic about the year ahead. Blind, a community of more than 2.8 million professionals connect, conducted a survey of nearly 10,000 professionals which showed that many Americans expect a recession in the coming year.
In the survey, 38% said there will be a recession in 2020, while another 34% said there will not be a recession and 28% said they don’t know. Comparatively, about 75% of top economists say there will be a recession by the end of 2021.
Generally, Americans are unsure of what to think about the economic future of the U.S. in 2020, but the gig economy was extra pessimistic. Booking.com, Airbnb and eBay are the top three companies with employees who believe a recession will hit at 47.3%, 47.06% and 44.44%, respectively.
And some companies are already starting to feel the cost-cutting measures as 54% of professionals surveyed said they had seen cost-cutting measures, and 46% said they had not. And the top four companies that saw cost-cutting measures in the workplace in 2019 were Uber at 87.5%, WeWork at 84.2%, eBay at 84.1% and Lyft at 82.1%.
While there seems to be a bright future with continued room for growth for the gig economy in 2020, fears of a recession create a dark cloud over otherwise positive reports.
But the gig economy was born into the financial crisis, becoming popular in 2008 and 2009, at the height of the recession. Task-based labor has evolved since then and has become a significant factor in the overall economy. So perhaps, born in the fire, a new, and probably less severe recession, could do little to touch this ever-growing and increasingly important sector.