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The number of people doing gig work on apps like Uber and DoorDash more than doubled during the pandemic

Jul 21, 2023, 00:22 IST
Business Insider
Alexi Rosenfeld/Getty Images
  • The number of people doing platform gig work like deliveries on apps in the US grew by over 150% during the pandemic.
  • The demographics of these workers also changed, as they became younger and more female.
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If you contemplated picking up gig work — or made the plunge completely — during the pandemic, you're not alone. The economy became even more gig-ified after the pandemic plunged the world into chaos, and it might be a permanent reshaping.

A recent working paper finds that the number of platform gig workers increased from 1.8 million in 2019 to 4.9 million in 2021, or about a 170% increase. The researchers used tax data from 90 gig economy platforms and apps for their analysis.

Dmitri Koustas, an assistant professor at The University of Chicago Harris School of Public Policy and one of the authors of the report, told Insider that this massive growth "is predominantly coming from delivery work" and included both "exceptional exit and exceptional entry" of workers.

"COVID was a watershed moment for a particular type of platform gig work, which is delivery work," Koustas said. "At the same time, we know from other datasets that rideshare was hit particularly hard."

It's indicative of how the pandemic reshaped the economy — as some people have become attracted to gig work as their main job, or as a side hustle. McKinsey estimated last year that 36% of the workforce is made up of independent workers compared to 27% in 2016.

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The face of gig work also changed, according to the study, accelerating a pre-pandemic trend. Workers in the sectors particularly hard hit by pandemic economic shocks, like leisure and hospitality, flocked to gig work. Gig workers became younger and more female; 44% of transportation and delivery platform workers were female by 2021, per the working paper. That rise in younger people could be due to "lower perceived COVID risk" than their older counterparts.

But even as the number of platform gig workers soared, wages did not: A 2022 analysis from the Economic Policy Institute, a left-leaning think tank, found that one in seven gig workers earned less than the federal minimum hourly wage of $7.25 an hour; just 38% made between $10 and $14.99 an hour, compared to over half of W-2 service workers. And 29% of gig workers made less than their state's minimum wage.

While platform gig work climbed during the pandemic, a research brief about the working paper results states that other contract and freelance work fell during COVID.

"Thus, COVID does not appear to have been a watershed moment for contract/freelancers, more broadly defined, in the United States," per the brief.

That could be partly because of the increase in work from home in traditional jobs because of the pandemic, per Koustas.

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"That type of flexibility that people want, well, now that was being offered on traditional types of wage jobs. You didn't have to go to the gig economy for it," Koustas said.

The report's estimates end in 2021, and Koustas said it's hard to say what the results will look like long term — especially since 2021 was "still a COVID environment."

"There could be increased demand for delivery than there was prior to COVID," Koustas said. "There could be this permanent change in behavior on the customer side. I think that this remains to be seen though, whether we go back to the world we were in before in terms of demand patterns."

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