On Feb. 1, 2010, Fiverr opened for business. It began as a humble marketplace for a few online services, like programming and tutoring, in the form of short tasks that costed only $5 – but the market turned out to be much bigger than that. Fiverr grew exponentially in the years following its birth, and so too did the scope of its services. Within two years, the site was hosting over 1.3 million “Gigs,” or one-off jobs done by sellers for just $5. By then, sellers were offering almost every conceivable online service, from video editing and digital marketing to horoscope readings and relationship advice. Today, Fiverr gets on the order of 40 million visits every month, over a quarter of which come from the United States.
As it turns out, Fiverr was launched at exactly the right time. In the wake of the 2008 economic downturn, millions of people had shifted from full-time work to temporary work, either because they could not find a full-time job or because the jobs they had were not paying enough to make ends meet. Fiverr became a platform through which these people could get in those valuable extra work hours.
In many ways, the success of Fiverr foreshadowed the success of the many well-loved gig marketplaces we know today: Uber, Airbnb, and TaskRabbit, to name a few. The takeaway from Fiverr’s story, to the founders of these new companies, was that people wanted to be able to work for themselves on their own time – and that there were enormous untapped markets for gigs in the physical world, such as transportation and living space rentals. Huge amounts of people were unsatisfied with the amount of work they were doing, but many struggled to find a good way to work more. Today, Intuit estimates that the gig economy makes up 34 percent of the U.S. workforce, and that number is climbing. In fact, so many people have joined these platforms as sellers that some, like Uber and Airbnb, have begun to face legal and regulatory challenges by municipalities worried that their traditional markets are being damaged.
Indeed, the gig economy has faced considerable criticism for the impact it has had on other industries. In 2014, Fiverr was widely panned for claiming that customers were being “ripped off” by professional graphic designers, contributing to the notion that these platforms are designed to reduce the value of services like logo design by flooding the market with sellers. The market for basic graphic design on Fiverr is now so saturated with sellers that it is virtually impossible to make a living selling there in the United States without offering some kind of high-end service. Likewise, many of the aforementioned challenges to Uber to Airbnb are the result of pressure from the taxi and hotel industries respectively – all because gig platforms have found a way to completely bypass the traditional barriers to entry in those industries.
For gig sellers and gig economy advocates, however, the disruption in traditional markets is a feature instead of a bug. Gigs have stolen the market power from many large, dominant businesses and put it firmly in the hands of millions of workers, who are often able to do a better job at a lower cost. This has the obvious effect of drastically reducing prices, making consumers better-off and sharply cutting costs for businesses that rely heavily on gig-compatible services. In addition, it puts the power to earn money in the hands of millions who didn’t have it before. Where before freelance workers had to advertise themselves online at websites like Craigslist (often to no avail), they now have platforms that connect them directly with buyers.
Many gig advocates are also quick to point out that the gig economy is not actually such a new concept – only after the dawn of the industrial revolution did Americans begin to work full-time for single employers; before then, they tended to work multiple different jobs to make ends meet. In other words, the gig economy may be less of a blow to the established order and more of a return to normalcy.
Still, many of the traditional sellers who have been blindsided by the gig economy are not huge hotel chains or well-established web design firms; they’re taxi drivers, graphic artists, and students. And there is something to be said for the considerable barriers they had to overcome in order to establish themselves without the help of the gig economy. Where before becoming a taxi driver required undergoing a rigorous certification process, for example, becoming licensed to drive for Uber now takes only two days. As the gig economy continues to grow, some sellers will inevitably go the way of “if you can’t beat ‘em, join ‘em,” while others will be forced out of their industries altogether. And as technology allows more and more industries to become gig-compatible (auto repairs and short-range shipping are a few vulnerable ones that come to mind), fewer and fewer traditional jobs will be safe. Whether this will bring about a net cost or benefit depends on who you ask, but one thing is virtually certain: if there isn’t a gig for it yet, there will be.