Gig Worker Guide - How to Get Started

Are you tired of the corporate grind? Feeling overworked and underappreciated? Not a big fan of your boss? These are all top reasons that more and more workers are embracing the great resignation to seek out their own path forward—in the gig economy. And they’re not alone. It just so happens that there are about 64 million gig workers and freelancers in the U.S. alone.

Working in the gig economy offers many benefits that are not attainable in more structured work environments, especially since most large corporations have called people back to the office. But, it’s important to recognize that gig work is not a sure thing. Depending on the path you choose to take, it may mean some time before you are rolling in dough, and that’s to say if that ever happens. 

If you are thinking of building your own gig or taking on a side hustle, we have the inside scoop on what you need to know before you get started.

What is Gig Work?

So, just what is gig work, anyway? You’ve probably heard actors or models use the word gig to refer to new projects that they’re working on. And they’re spot on—gig work refers to temporary, flexible jobs where freelancers or independent contractors are paid for each job they complete, also known as a "gig." 

Unlike traditional jobs, which often have regular hours and long-term employment, gig work allows individuals to choose when, where, and how much they want to work. This can include anything from a single task to a longer-term project, but each job is generally short-term and paid separately.

Common Types of Gig Work

Here are some of the most popular forms of gig work. Some are easy to get started right away, and others might take more time to develop.

• Ridesharing drivers: Using their own vehicles to drive passengers to various destinations.
• Food delivery: Delivering food from restaurants to customers' doorsteps.
• Housing hosting: Renting out personal properties for short stays through platforms like Airbnb.
• Service workers: Performing tasks such as furniture assembly, moving help, or home repairs through platforms like Taskrabbit or Thumbtack.
• Freelancers: Including copywriters, bloggers, graphic designers, web developers, and social media managers.
• Tutoring: Providing academic help or teaching new skills to students online or in person.
• Pet services: Offering pet sitting, dog walking, or grooming services.

What are the Benefits of Gig Work?

Ask any gig worker, and they’ll most likely tell you that they love it and wish they had gotten started sooner. While this may be true, at Cash Store, we believe things happen when they are supposed to. This means that many gig workers are busy developing skills and growing experiences for a future gig role that they might not even be privy to just yet. And when they eventually get there, they’ll likely experience many, if not all, of the benefits below.

• Flexible scheduling: Choose your own work hours to fit personal and family commitments.
• Ability to work as much or as little as needed: Control your income by working more when you need more money or less when you don't.
• Ability to work for multiple companies simultaneously: Diversify your income sources and gain varied experiences.
• Can start and stop when situations arise that require your time: Easily adjust your work commitments around unexpected life events.
• No long-term commitments: Take on short-term tasks without the obligation of a long-term contract.
• Variety of work: Engage in different tasks and projects, preventing monotonous work routines.
• Opportunity for rapid skill development: Quickly gain new skills and experiences across various industries and roles.
• Potential for higher earnings: Often, you can earn more per hour than in traditional roles, depending on the gig and your efficiency.

What is the Biggest Risk to Gig Work?

As with any job you pursue, there can be risks. For example, you may risk a bad boss in the corporate environment. The company may be doing poorly and falling short of revenue goals, which may mean mass layoffs. You may make less money than you are worth or face ageism or other forms of discrimination.

With gig work, there are some risks to tackle as well. The biggest risks, however, are related to your ability to manage your finances. 

Tax and Reporting Requirements

Gig workers are typically classified as independent contractors, which means they receive a Form 1099 from each client or company that pays them $600 or more annually. Unlike traditional employees, whose employer withholds taxes, gig workers must calculate and pay their taxes, including income and self-employment taxes. This can be complicated, especially for those new to gig work. Failure to accurately track income and expenses or to file taxes properly can lead to penalties and a larger tax bill than expected. A financial advisor or accountant can help in these situations.

Demand Cycles Can Limit Your Opportunities

The nature of gig work often depends heavily on fluctuating demand cycles, which can significantly impact income stability. For example, rideshare drivers might find fewer passengers during bad weather or outside of tourist seasons. 

Similarly, freelancers such as graphic designers may experience dry spells when service demand drops. These cycles can make it challenging to predict earnings and plan financially, potentially leading to periods where making money becomes more difficult.

Personal Responsibility Shifted to You

When you work in the gig economy, the responsibility for many aspects of the job shifts directly to you. For instance, if you use your car for ridesharing or delivery services, you are responsible for maintenance and repairs, which can be costly. Also, breakdowns mean direct repair costs and lost income during downtime. 

Gig workers must also be aware of liability issues. Different gig platforms provide varying levels of support and insurance, so it's important to understand what you are and aren't covered for, as this can affect your financial and legal safety. For this reason, many freelancers take out business liability insurance for added peace of mind.

Know the Benefits and Risks Before Getting Started in the Gig Economy

Just as you would before signing an employment offer anywhere else, do some homework to learn the details of the opportunity. Assess your financial readiness to ensure you can manage while growing your income. 

And, if you fall short, know that Cash Store can help during periods of low demand or unexpected emergencies. A short-term cash loan can be a lifesaver. Complete our prequalification application today to get started.

The content on this page provides general consumer information or tips. It is not financial advice or guidance. Each person’s circumstances are unique. The Cash Store may update this information periodically. This information may also include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. There may be other resources that also serve your needs.