The way people work has changed, and the old concept of a steady income from 9 to 5 is no longer the norm. The work pattern of gig-job workers who complete errands and dispatch work through platforms has inspired the 21st century to become the era of the Gig Economy (1). Any time you order food for delivery or use a rideshare app, you are contributing to the gig economy (2). If you need some help designing your website, you can more than likely find the right person for the job on apps like Fiverr, Freelancer, or Upwork (3). The gig economy is both transforming how work is done as well as reshaping opportunities, empowering workers, and redefining what it means to earn, create, and innovate in today's world. The rise of the gig economy opens doors, but it also sparks a pressing question: can workers truly thrive in this new era of flexible labor?

What exactly is the gig economy?

The gig economy involves the exchange of labour for money between individuals and companies through digital platforms that facilitate matching between customers and providers. These labours are short-term or on a payment basis by tasks that provide the opportunity to build career paths while being innovative (4,5).

Examples of gig workers are independent contractors, project-based workers, freelancers and temporary or part-time hires. The gig workers are mainly connecting through gig apps and digital platforms (6). Gig economies do vary across platforms which are undertaken by the independent workers. Some people do it for a living, while others have it as a side hustle on a part-time basis, during weekends or evenings. You can distinguish between gig workers who are participating in “crowd work” or “app-based work”. Crowdwork is posted by a requester on an online platform and also delivered online, while app-based work are services that are delivered on-site or so called in-person services (7,8).

The popularity and growth of the gig economy has reshaped traditional employment towards favoring temporary, task-oriented work structures. Digital platforms facilitate gig work across a wide range of industries, from transportation and delivery services to freelance and creative sectors. Its growth has been encouraged by technological progress, changing worker preferences, and the increasing demand for flexible labor solutions. Advocates emphasize the opportunities for economic empowerment and innovation that gig work can provide, whereas critics point to issues such as potential worker exploitation and gaps in regulation. This paper examines both the advantages and challenges of the gig economy, assessing its implications for long-term labor sustainability (9).

Gig-economic trends

The rise of gig employment has often been more positively welcomed by nations and organizations with lower and moderate income where concerns such as labour regulations and rights for workers are tied to promote financial growth. This has gained great importance in the post-pandemic world as work-from-home became a key priority during the pandemic (10).

The gig economy's global footprint has expanded substantially. Ride-sharing platforms like Uber and Lyft dominate the market, contributing 88% of the global gig economy’s gross volume in 2025. Airbnb also dominates in the gig market worldwide (27). In 2023, the global gig economy was valued at approximately $3.7 trillion, with independent contractors accounting for the majority of this revenue (11). By 2025, this market size is projected to reach $582.2 billion, with a compound annual growth rate (CAGR) of 15.79% through 2034 (12).

What is important to note is that the gig economy looks very different depending on countries. In Europe, countries like the Netherlands and the UK have implemented regulations to address gig workers' rights, including minimum wage laws and social security benefits (30). Conversely, in regions like the UAE, stringent visa and employment laws restrict the growth of the gig economy, limiting opportunities for expatriate workers. Similarly, in Japan, cultural attitudes towards traditional employment and regulatory barriers have slowed the adoption of gig work, despite advanced technological capabilities (31).

Challenges in the gig economy

Despite the advantages that the gig economy presents, it also comes with challenges, primarily concerning worker security and rights. Firstly, regulatory ambiguities complicate the landscape of the gig economy. The status of gig workers continues to spark debate, as courts in multiple regions contest whether they qualify as employees or independent contractors. Policymakers have a hard time balancing labor protections with the flexibility that defines gig work (9).

Furthermore, despite the economic freedom of working in the gig economy compared to full-time employment, there is a constant sense of uncertainty for the workers, fearing for their money and even jobs due to a lack of organizational support and financial insecurity. The jobs do not come with income stability nor access to benefits (13). For instance, in the United States, a study revealed that 88% of gig workers have taken on additional jobs to make ends meet, with nearly half expressing concern over the lack of traditional benefits such as healthcare and retirement plans, underscoring the financial precarity inherent in gig work (29).

In response to the rapid growth of the gig economy, several regions have introduced regulatory measures to protect gig workers. For instance, the European Union passed legislation reclassifying gig workers as employees by default, granting them rights such as holiday pay, sick leave, and protection against algorithmic management (19).

Another example of how governments are tackling these challenges is Malaysia. In September 2025, the Malaysian Senate approved the Gig Workers Bill 2025, a comprehensive law designed to protect over 1.2 million gig workers. The bill introduces clear service contracts, guarantees workers’ rights such as fair dismissal procedures and the freedom to work across multiple platforms, and establishes mechanisms for dispute resolution, including a dedicated Gig Workers Tribunal. This is a major step toward improving job security for gig workers (14,15,16).

Opportunities in the gig economy

Despite its disruptive nature, the gig economy creates innovation by new forms of entrepreneurship and employment opportunities (17). Digital platforms provide gig workers with access to a global marketplace, allowing them to monetize underutilized assets and skills. This has led to the rise of various gig economy sectors, including ridesharing, home-sharing, and freelance services, which contribute to economic growth and job creation. Furthermore, the gig economy promotes innovation in business models and service delivery methods. Companies are leveraging gig workers to improve agility, reduce costs, and meet evolving consumer demands. Businesses can access a diverse talent pool and scale operations more efficiently by embracing gig platforms (18).

How AI is Transforming the Gig Economy

Today, artificial intelligence (AI) is playing an increasingly important role in shaping the landscape of gig-workers. By leveraging AI-powered algorithms, platforms can efficiently match workers with tasks and projects that best suit their skills and preferences (20, 21).

The gig economy and AI are two interrelated influences on the future of work. AI can offer gig workers flexibility and help them achieve many tasks. However, companies can also choose to use AI internally, so relying less on freelance gig workers (25). Take Fiverr as an example, once a booming marketplace for freelance graphic designers, writers, and digital marketers. The rise of tools such as MidJourney, ChatGPT, and Canva’s AI design features now means that tasks once requiring hours of human effort can be completed by algorithms in minutes and at a fraction of the cost (23). Moreover, for ride-hailing and food delivery companies, AI investment in autonomous vehicles may reduce costs significantly. In the US, Uber is testing autonomous deliveries in several cities, using AI-powered sidewalk robots and autonomous cars to deliver food. In Las Vegas, Uber is piloting a public service where customers can hail a ride in an autonomous vehicle (25).

Freelancers are increasingly pushed to show why their skills still matter in a market that prizes speed and affordability. As technology reshapes the gig economy, the real challenge is no longer if AI will play a role, but whether it will displace freelancers or become a tool that strengthens their work (24).

The horizon of the gig economy

As the gig economy continues to evolve, proactive policy measures will be essential in shaping an inclusive and resilient labor market. As the AI revolution accelerates, the gig economy is reaching a turning point. In the coming years, many routine freelance roles will face increasing automation, creating short-term job displacement and an urgent need for workers to reskill. Platforms like Fiverr and Upwork are already showing this shift, with clients seeking AI-driven solutions and freelancers needing to adapt quickly. However, the long-term picture is not purely negative. Beyond 2030, AI is expected to drive new kinds of work, greater productivity, and entirely new opportunities that blend human creativity with machine intelligence (24). Shall we?

This article is part of The Outside World, ftrprf’s very own research center.

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