The gig economy is based around untraditional employment in which temporary positions, freelancing and short-term employment are common. Independent workers are hired to work for an organization only for a short period of time.
This type of economy was said to be fast-growing and was expected to grow exponentially this year, however this growth was short-lived when the effects of the coronavirus pandemic began earlier this year.
A recent report named The Digital Hustle: Gig Worker Financial Lives Under Pressure, published by a fintech investment platform, Flourish, detailed the financial effects and lifestyle impacts on the workers in the gig economy in South Africa, India, Indonesia, Brazil and the USA.
3 195 workers were surveyed from May 2020 to August 2020, with 605 of these workers coming from South Africa.
The research showed that 66% of gig workers around the world reported that they experienced a decline in income, with ridesharing drivers from platforms like Uber and Lyft being hit the hardest.
“The gig economy has created an alternative source of income for many people away from the 9am to 5pm jobs. Covid-19 disrupted the models in e hailing, online deliveries and the general gig economy. We saw similar trends and insights in terms of the impact of the pandemic in South Africa, India, Indonesia, Brazil and USA”, said Ameya Upadhyay, Venture Portionner at Flourish Ventures.
91% of workers interviewed in South Africa were very concerned about Covid-19. They were mostly concerned about the effects of the pandemic on their ability to earn a living and the risk that it posed to their family’s health.
In South Africa more than half of the gig workers reduced household expenses, nearly half borrowed money and almost three out of four had to rely on savings. This was a common trend in Brazil, Indonesia and the USA as well. However, gig workers in India experienced financial cushioning as a result of a strong savings culture, so 83% relied on their savings and 15% found new or additional work.
“With many economies now reopening, we hope to see the gig sector become more vibrant. Operations are evidently going to change in terms of adhering to health protocols in different countries but the industry should be flexible enough to take on board the changing consumer behaviour,” Ameya stated.
Flourish anticipates that the gig economy will experience continued growth as its dynamic nature will make it flexible enough to change and allow workers to find the best way to fit into this digital workforce as lockdown regulations ease across the world.
“In our post pandemic world, the gig economy is going to become more essential and more vital, especially in Africa. Gig work is becoming increasingly essential as a potential pathway to socio-economic development and employment creation, given Africa’s unique status as the continent with the youngest population but the highest youth unemployment rate,” said Ameya.
See more on The Digital Hustle: Gig Worker Financial Lives Under Pressure report here
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