The Pros and Cons of the Gig Economy

The gig economy has exploded over the last decade. Nearly a third of Canadian workers now engage in some sort of freelance, part-time or contract work.

A “gig worker” is just another name for an independent contractor or part-time worker. Uber drivers, freelance writers and virtual assistants all fall under the “gig economy” category.

There are many benefits to being an independent contractor, but there are also many concerns that need to be considered.

The Advantages of the Gig Economy

Most people are attracted to the gig economy because of its benefits, which include:

Greater Flexibility

Gig workers are their own bosses. They set their own schedules, and they’re in control of the work they take on. If you want to start your day at 4am, finish by 12pm and have the rest of the day off, you can do this as a gig worker.

As an independent contractor, you generally have the flexibility to complete your work on your own time as long as you meet the deadline.

You also have flexibility when it comes to your office. You can work from home, a local coffee shop, or a co-working space. For some gig workers, like rideshare drivers, you have less flexibility in this department because you’re confined to your vehicle. However, most freelance and independent contractors can decide where they want to work.

Independence

Gig workers don’t have bosses breathing down their necks. They complete their work on their own time and in their own way. Many people love the independence and freedom the gig economy offers.

Post Mates is a great example of how the gig economy allows workers to have more independence. Couriers for Post Mates can choose when they want to start accepting orders so that they can work on their own time. They aren’t constrained to any particular type of vehicle, they don’t have to deal with passengers, and they can even bring a friend along if they like.

Freelancing works in a similar way. You may have a deadline, but it’s up to you to decide how and when the work will get done.

Earning Potential

As a gig worker, you essentially work as your own little business. When it comes to your income, the sky is the limit. You set your rates, and you’re in control of how much work you take on.

Gig workers also have the flexibility to continue their education while working. By obtaining a degree or certification, you can further increase your earnings potential.

The Drawbacks of the Gig Economy

While there are numerous benefits to working in the gig economy, there are also some drawbacks.

You’ll Have to Pay Taxes

One of the biggest headaches gig workers face is having to deal with taxes. The Canada Revenue Agency considers gig workers to be independent contractors, or self-employed.

You’ll need to file your tax return by the deadline, track your income, track your expenses and track your deductions.

Work May be Inconsistent

Another major drawback of the gig economy is that work may be inconsistent. When you’re a formal employee, you can rely on a weekly paycheck. But as a freelance worker or independent contractor, income isn’t as reliable.

You may have plenty of work one month, and no work the next month. Sometimes, you have to chase down clients to pay invoices.

The gig economy certainly has its pros and cons, but it’s ultimately up to you to decide whether the risks are worth the benefits that this type of work offers.

David Jackson

David is a personal finance expert, a professional male model, and an entertainment writer.