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How to survive and thrive in the gig economy

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A gig economy is a global market where businesses and contractors (freelancers, independent contractors, part-time workers) set short-term and on-demand professional relationships that are both flexible and skill-based.

Technology is a major enabler of freelance work. Popular digital apps and websites, such as Uber, Lyft, Airbnb, Upwork and Taskrabbit, allow gig workers to work from anywhere as long as they are connected to the internet. It also opens up opportunities for those who want a side hustle in addition to their full-time job or who want to earn a living by taking on work that won’t box them in an office setting. It’s never been easier to be your own boss from the comfort of your home office or coffee shop.

While there are a lot of advantages if you choose to work as a freelancer, there are also major downsides you should consider before signing up for gig economy jobs. And as the growth of the gig economy shows no signs of slowing down, surviving (and thriving) as a freelance worker has never been more challenging. 

Here is our guide on how you can survive the gig economy and become a successful freelance worker. 

Know your purpose   

For many independent workers, work is more than just earning a living wage. One of the main reasons freelancers decide to leave their traditional jobs is to pursue something that is more aligned with their values and interests. For others, it is to find work/life balance. For some people, their side hustle provides extra income that will help them reach their financial goals. Having a purpose for your gig work is crucial to stay motivated. Look back on that purpose when you encounter difficulties to stay resilient.   

Create a routine

Research shows that routines enhance daily focus and performance. Establish a routine that will help send a signal to your brain that it’s time to work. This is especially helpful when you are working from home and not in an office setting. Routines give you time to get your thoughts together so you’re more equipped to handle whatever the day brings. Choose working hours that you feel you will be more productive and will suit your schedule. 

Whatever routine you set, make sure to set at least a rough start and end time each day. Otherwise, you’ll end up just working beyond the standard eight-hour workday and reach a point of ‘burnout’.

Determine your rate 

There are a lot of horror stories of gig workers being underpaid for the amount of labor they did. Recently, Uber was under fire after it was revealed that its independent contractors are still earning below minimum wage, even during peak times

If you don’t charge enough for the work you’re doing, you may be overworking just to make ends meet. This is not only demoralising, but also impractical. To have a better estimate of how much your rate should be, ask your fellow freelancers what the market is like for your skills and what their rates are.

However, don’t make the mistake of basing your fees and what you need to earn. Make sure that your rate is appropriate to your expertise level and your skill market. You may have to quote a lower rate at the beginning while you’re still working out how much you’re worth and still competing to get clients. But plan to raise your prices sooner than later. When you’ve hit the right rate level and you’re doing good and reliable work, there’s a bigger chance that people will rehire you.  

Organise your finances

Whether you’re a part-time freelancer or a full-time independent contractor, you’ll be thankful you tracked your finances when tax season comes around. Create an organisational system to keep your business and personal expenses separate. Diligently monitor your income and expenses so you can claim all the appropriate tax deductions. If you need help with your taxes, you can consult a financial adviser or hire a trustworthy accountant. 

As a freelancer, keep in mind that there are things that a company normally would provide that you now must take care of yourself. A recent study showed that workers in the gig economy could face long-term financial disadvantage due to their lack of access to employer-funded superannuation and other basic entitlements. Remember to save for retirement and to get health insurance to make sure all your bases are covered.  

Be prepared for the uncertain times 

Experienced freelancers learn that income in the gig economy is very episodic. When you’re first starting out, your income is not stable and may fluctuate. If you’re planning to leave the nine-to-five employment to become a full-time freelancer, make sure you have an emergency fund so you have a safety net during the dry spell months.  

Most freelancers make the mistake of jumping at the first opportunity that comes their way to combat uncertainty. However, it’s important to select your jobs wisely. See how much you’ll potentially earn for the time you will spend doing the job. Don’t waste your time on a job that will leave you undervalued and underpaid. Instead of grabbing that job, you can network to find gigs that would actually pay a living wage. 

Improve your time management skills 

Being a gig worker is like having several jobs and bosses, so time management is essential. To see where the hours in your day are going and to give more time to tasks or jobs where more effort is needed, you could consider using a time-tracking app. 

Freelancers sometimes make the mistake of taking on too much work and getting overbooked. Before taking on any job, make sure you have room in your schedule. It’s also advisable to do business development and networking during your downtime. 

Networking is a must 

With so many talented freelancers looking to make a career in the gig economy, one of the best ways to stand out is to create a good relationship with your contacts and potential clients by networking. Join forums, online communities and connect with people who can refer you to clients that are seeking freelancers with your skill and expertise. 

Conclusion 

The rapid rise of the gig economy is expected to further increase the number of people working as freelancers. As more employees become more open to non-traditional forms of work, employers are also increasing work-from-home flexibility and independent contract work. In order to survive as a gig worker, remember the purpose you established from the beginning and never sell yourself short. With enough perseverance, resilience and discipline, you may even find yourself thriving in the gig economy. 

Are you part of the gig economy? What are your tips for people seeking to survive and thrive in the gig economy? Share your thoughts! For more tips on how to earn money through side hustles, explore nestegg today! 

How to survive and thrive in the gig economy

How to survive and thrive in the gig economy

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Economy

Future of Work | The Gig Economy

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Future of Work


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Today more than 55 million Americans work in the gig economy, which operates through digital platforms like Uber, Lyft and Task Rabbit. Fueled by technological advancements, the gig economy allows workers like Chloe Grishaw to set her own schedule, and know what she’s agreeing to, without any long-term obligations. The freedom and flexibility, however, comes with financial insecurity.

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Gig Economy—How Deep Is The Discontent? – BloombergQuint

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Good news and bad news about the ‘gig’ and app-based economy, according to JPM

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A recent JPMorgan Chase report found that workers earning money through the online platform economy are particularly vulnerable to economic shocks.

The online platform economy, which includes ride-sharing services like Uber (UBER) and Lyft (LYFT), online marketplaces like eBay (EBAY) and StockX, telemedicine companies like Teladoc, and other online services, supports almost 8% of families in the United States, according to the report.

This sector also experienced a higher rate of unemployment than the general economy, the report found. “Overall, we see significantly higher UI rates among platform participants relative to the non-platform group,” authors Fiona Greig and Daniel M. Sullivan, wrote in the report. 

“At its peak, the UI receipt rate of drivers was just under 19 percent, over twice the rate of the non-platform group. UI receipt rate among platform participants in other sectors are also elevated, peaking between 13 and 15 percent.”

Rideshare Uber and Lyft drivers rally in support of the Protecting the Right to Organize (PRO) Act, in Los Angeles, California, U.S., March 16, 2021. REUTERS/Lucy Nicholson

Rideshare Uber and Lyft drivers rally in support of the Protecting the Right to Organize (PRO) Act, in Los Angeles, California, U.S., March 16, 2021. REUTERS/Lucy Nicholson

Workers in such industries may be particularly vulnerable to economic volatility like the one induced by the coronavirus pandemic, the report found. “Almost one in five drivers in 2019 was receiving unemployment insurance at the beginning of the pandemic,” the authors wrote. “Of all platform workers, drivers appear to be the group of biggest concern for policymakers from a welfare perspective. They are the most numerous group, have the lowest family incomes, were the most likely to have received unemployment insurance during 2020.”

Drivers were the group which, in the aggregate, were most reliant on the gig economy for income, with leasing platforms accounting for 15% and 20% of the median family’s total income. However, this share of income has decreased since the onset of the pandemic, in part due to reduced demand for riding services as well as an influx of support from government transfer payments.

“The continued rise of the Online Platform Economy raises the importance of strengthening the social safety net for contingent workers and reducing the administrative burdens associated with platform income,” Greig and Sullivan wrote. “Reducing administrative hassles associated with verifying platform income for the purposes of filing taxes, qualifying for social safety net programs, or gaining access to credit, could materially improve and simplify the financial lives of platform workers.”

Online platform economy ‘on the rise’

Despite the new and continuing risks associated with it, the gig and app-based economy has provided a significant role in generating income for people, especially during the pandemic.

“The Online Platform Economy is a crucial source of income for many families even after the shock of the pandemic,” the report noted. “At its peak, almost 8 percent of families earned platform income in any 12 month window.”

Drivers in the ride-sharing economy make up a large portion of the growing gig economy. The online platform economy is especially important for these drivers, who “represent the lion’s share of supply-side platform participants and have the smallest total family incomes,” the authors wrote. “Additionally, lessors derive the highest revenues and the largest share of their total family income from platforms.”

Though concerns regarding the treatment of drivers in the ride-sharing companies have abounded recently, the online platform economy continues to grow and already represents an important part of the total economy, the authors found.

Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on Twitter @IFanusie.

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