The pandemic’s impact on gig economy

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Organizations historically plan for occurrences like natural disasters, energy shortages, and digital outages (remember Y2K?). They invest billions in disaster-recovery plans, data availability, and backup sites. But let’s admit it — unlike a few Hollywood movies, not many companies give real thought to preparing for a health pandemic. 

Within a short period of time, the coronavirus outbreak has affected human life more than we could’ve imagined. COVID-19 is disrupting the global economy and forcing billions across the world to stay at home to contain the spread. Consequently, enterprises of all sizes need to adapt quickly to a new reality in which the only thing certain is uncertainty. Finding themselves without a blueprint, they are scrambling to transform overnight from physical to virtual workplaces, recalculate their go-to-market strategies, and redefine their product offering. 

While industry after industry and market after market across the globe are struggling to survive the pandemic, one sector in particular is benefiting from the chaos — the gig economy.

The millions of sudden layoffs, combined with quarantine guidelines and shelter-in-place orders, have created an impactful combination of supply and demand that has boosted demand for gig workers and services. However, the gig economy itself can be divided into many subcategories, and some are doing better than others. 

One of the primary distinctions between gig services is physical versus digital. While both sides are seeing varying levels of demand, the characteristics of digital services in the midst of this pandemic should propel this area for more sustainable, long-term growth than physical services. 

Physical Gig Services

While relatively new, nebulous, and rapidly evolving, the physical gig economy has been a darling of media and venture capitalists. And whereas during the 2008 Great Recession, gig economy juggernauts like Uber and Airbnb found their footing, right now, COVID-19 is striking at the heart of their business models.

While likely to survive in the long-run, the current lack of demand for certain physical services is contingent upon the quarantine order. Yes, physical gig economy powerhouses like Instacart and Amazon are reporting a 10.4% increase in income during the last two weeks of March. But this crisis has exposed a major vulnerability for other physical gig platforms based on tangible supply (physical assets or services). Read more here…

Source: ERE

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