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Gig Work is Here to Stay

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Just in 2021, there were at least 59 million gig work employees in the U.S. — 36% of the nation’s workforce — marking an almost 20 million increase compared to 2020. 

Not only does gig work offer flexible working hours, allow employees to set their own rates and give people the opportunity to be their own boss; gig working employees feel like their work gives them purpose and have a positive view of their work and the future. 

Gen Z, the Great Resignation and gig work  

As more of the working class look to gig working opportunities amid the Great Resignation, it's interesting to see the uptick in employees looking at their gig work setups as their primary source of income (44%). According to a PEW study, more than half of Americans who have earned money through online gig platforms in 2021 say the money they earned has been essential or important for meeting their basic needs. 

The largest driver of the gig economy is the group of young professionals entering the workforce post-pandemic. Now, younger workers are actually more likely to quit their current jobs and look for better opportunities than their older co-workers. According to Lever, 65% of Gen Z employees plan to quit their jobs this year, with their biggest reasons being having a sense of purpose in addition to better pay. 

So why is this generation more prone to look for different opportunities than previous generations? In a study conducted by Microsoft, Gen Z employees reported more work-related problems and stressors in 2021 than any other generation. Gen Z is the first generation of workers to start their jobs in a completely remote environment and therefore look for specific workplace opportunities like the ability to bring new ideas to the table, employee engagement and excitement, and feeling heard in the workplace. Remote working, in particular, is making it harder for younger employees to network, create meaningful connections in the workplace and find work-life balance, and as a result, they often face feelings of isolation and stagnation. 

In addition to finding better work-life balance and feeling valued in the workplace, gig work gives younger employees independence, opportunities to try jobs they never thought of exploring before and a low barrier to entry. As the younger generation stray from traditional 9-5 work and look towards gig working opportunities, Gen Zers are creating a new normal: 

  • Almost a third of 18–29-year-olds earned money through an online gig platform in 2021 
  • 52% of Gen Zers work more than one job 
  • 18% of adults under the age of 30 have used a gig app to make deliveries from a restaurant or store

Gig work highlight: Ridesharing and food delivery 

The most popular gig work job is driving for ridesharing apps like Uber and Lyft, as well as food delivery apps; all a person needs is a smartphone and a car. In fact, 58% of the gig economy in the world is in the area of transportation.

  • Uber currently employs about 900,000 Americans and hires about 50,000 new drivers every month. 
  • The ride-sharing market is expected to be worth $220 billion by 2025.
  • The online food delivery market is expected to grow to a 21% share of the restaurant market by 2025. 
  • Americans aged 18-29 use ride-sharing more often than any other age group (51%). 
  • Similarly, Americans aged 18-29 are more likely to use food delivery apps than any other age group (63%). 
  • Food courier drivers are now traveling to customers further away, with an increase in mileage of 43% in 2021. 
  • The Bureau of Labor Statistics reported that 20% of workplace deaths were delivery drivers, and delivery drivers are 1.8x more likely to die on the job than police drivers. 

As this sect of the gig economy continues to grow, it's easy to see how the gig economy and insurance overlap; the more people rely on their own personal vehicles to do their jobs, the more aware they should be about their insurance policy. 

Why insuring gig workers gets tricky

Insuring driving gig workers can be a gray area; rideshare drivers aren’t necessarily considered employees, but drivers shouldn't be held accountable for liability that might come from being on the job. While traditional insurers offer add-ons to close the gap, gig workers aren’t making enough to afford those add-ons.

Not only do digital insurtech companies provide gig workers with personalized and cost-effective policies, some even provide monthly payment options and offer customers a streamlined shopping experience. CCC Intelligent Solutions suggests that legacy carriers should evaluate their company's end-to-end experience and seriously consider data analytics beyond claims to reach this ever-growing market.

Some gig working companies offer insurance coverage through the company, but it’s important to consider covering any gaps in the policy. 

  • Amazon Flex offers drivers the Amazon Flex Auto Policy, which covers couriers delivering, picking up and returning undelivered packages to a designated location. This policy includes liability coverage, uninsured/underinsured motorist coverage and contingent comprehensive and collision coverage.
  • DoorDash provides drivers with a contingent liability policy when drivers are in possession of goods to be delivered, which means it covers only from restaurant to delivery. In 2019, all U.S. Dashers were automatically eligible and enrolled for occupational accident insurance coverage as well.
  • Postmates provides drivers with liability coverage once a courier’s personal policy coverage is exhausted. The company announced an occupational accident insurance policy in 2019. 
  • Uber Eats offers delivery drivers coverage while they are on active deliveries and additional coverage for rideshare drivers.

As ride-hailing and delivery companies continue to evolve their business models to support workers, some companies such as HyreCar recently announced its new initiative to empower gig workers to get back on the road called HyreForGood. The company, a carsharing marketplace for ridesharing and food/package delivery services, aims to lend recipients of the program a vehicle to use for work and receive an all-expense-paid rental, including insurance fees. 

Learn more about rideshare insurance here

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Jasmine KimB2B Content Manager

Jasmine is The Zebra’s newsroom content writer. With a background in journalism, she reports on breaking news, trends, mergers and acquisitions, and financial reports related to the insurance industry.