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Gig Economy Myths Debunked

The gig economy consists of workers who provide services on a part-time and on-demand basis. These workers are not official employees of companies. Instead, they are independent contractors.

WeGoLook has 30,000 gig workers in the Looker Community and value the special skillsets these Lookers bring to our unique business model.

They often work on a project-to-project basis, and work for many different companies. And the gig economy is booming, with one study projecting that by 2020 50 percent of our workforce will be independent.

Despite this rapid growth, there are still some uncertainty and misconception about the gig world.

Here are some of the top gig economy myths debunked.

 

Myth #1: The gig economy is a small and irrelevant workforce.

This is definitely not true. In fact, more than 54 million people worked in the gig economy in some way in America in 2015.

This is a staggering amount of workers and it amounts to more than 33 percent of the total U.S. workforce population.

 

Myth #2: The gig economy is temporary.

This is also definitely a myth that is not based in fact. The gig economy is growing steadily in size and influence.

In fact, it is predicted that by 2020 more than 50 percent of the American workforce will be workers in the gig economy.

 

Myth #3: Companies that operate in the gig economy are web-only, are not valuable.

Companies that operate in the gig economy can be extremely profitable and valuable.

For example, Uber, a taxi company that relies heavily on independent contractors is the fastest growing startup of all time.

In its first five years in operation, the company grew to a valuation of $60 billion. This is a perfect example of how helpful the gig economy can be to companies who operate in it.

Also, despite being a young company that is massively expanding, Airbnb posted profits for the first time in 2016.

 

Myth #4: Dodging benefits and payroll taxes are the main reasons why companies hire independent contractors.

Being able to avoid payroll taxes and benefits for independent workers is a bonus of the gig economy for companies. However, this is not the main reason why companies hire independent contractors.

According to one survey, 56 percent of employers hire independent contractors due to expertise. Also, 42 percent reported hiring independent contractors due to seasonal demand increases.

 

Myth #5: The gig economy is only growing stronger in the United States.

This is not true. Actually, the gig economy is growing stronger in many other places.

For example, in Europe, the gig economy experienced a 45 percent increase in the amount of independent contractors from the year 2012 to the year 2013. The benefits of the gig economy have apparently been noticed by more than one country.

 

Myth #6: Millennials do not like working in the gig economy.

More than 33 percent of millennials are independent contractors, making them the largest age group in the gig economy workforce.

The flexibility and higher amounts of freedom appear to be driving the millennial support of the gig economy. Employment can also be easier to find in the gig economy for millennials.

For example, it may be easier for many millennials to simply rideshare than to obtain a traditional job at a corporation.

 

Myth #7: Independent workers only work in the gig economy because they have no choice.

This may be true for some people who work in the gig economy. However, one source reports that the vast majority say they work in the gig economy based on choice.

Reportedly, 70 percent of freelancers work in the gig economy because it is their preference.

 

Myth #8: Companies do not like hiring freelance workers.

According to one source, roughly 50 percent of U.S. businesses in a survey reported to boosting their use of freelance contractors in the past five years.

This indicates that companies are starting to rely significantly more on freelance workers than they have done in the past.

What becomes abundantly clear when reviewing the statistics behind the growing gig economy, is that this economic trend has staying power. It's time for businesses to get on board and consider how the gig economy can plug into their business processes.