4 things to know about gig companiesOct 31, 2022 11:50AM ● By Adam Cochran
November is a month for gratitude and spending time with family. It’s also the time of year that businesses do their best to get their books into the black by getting their customers to go into the red.
What a weird way to celebrate our gratitude.
It’s easy to focus on the negative impacts that COVID had on the world, but it’s also important to be grateful for the opportunities that became mainstream as a result.
So as a reflection of my gratitude, and to prepare you for the next few weeks of holiday shopping, here are some pointers for using technology to make some extra money.
Among the most beneficial changes COVID brought was the ability to get a job without being employed. DoorDash, Uber, Airbnb, Etsy and other web-based businesses provide a payment and service infrastructure without actually offering any products themselves.
Uber doesn’t provide rides; it provides the connection for people who want to make money by giving rides to people who are willing to pay to get rides. DoorDash doesn’t sell food, but it does offer a connection between people who are so hungry they’re willing to pay extra to have food delivered with people who are willing to spend their time and gas to pick up and deliver food in exchange for some pocket money.
Although these businesses were doing well before COVID, they became essential avenues for accessing the little things that quickly became luxuries during lockdown.
This phenomenon, combined with the usual financial stress of the holiday season, will likely lead many to consider signing up with a gig company to make a little side income.
Gig economy jobs generally keep a small portion of each transaction which is paid by the customer. These business are legitimate and offer a variety of ways for individuals to increase their customers by accumulating positive reviews. There are pros and cons to each of these services, and it is important to do research before signing up.
You probably won’t get rich.Most entrepreneurs have a dream of starting a business that involves making money by doing something they’re good at and find enjoyable. But people don’t pay the big bucks for something that is enjoyable for the seller.
The customer wants it their way.
It doesn’t matter whether it’s art, race car driving, or being an ice cream taste tester, the only people willing to pay you to do it will want you to do it on their terms. This is why it’s difficult to make a profit on Etsy. If you’re the first person doing an enjoyable crafting idea that catches on, you can only continue to profit if the craft is nearly impossible for someone to duplicate and make money at.
Cricut is a company that takes advantage of the myth of making a living on Etsy or craft fairs by allowing people to make custom stickers, T-shirts or anything else that involves sticky or iron-on vinyl. But, the cost of supplies for the equipment, consumables and wholesale supplies are vastly more expensive than ordering the same items from a professional printer with industrial equipment.
Don’t assume anything is covered by insurance.
This is probably one of the biggest deterrents for those looking to enter the gig economy. Uber, Airbnb, DoorDash and similar services are not covered by your existing insurance. They also aren’t covered by the company you are gigging for. Car insurance that covers using your car for delivery of people or goods costs around $200 per month for a single-driver policy.
It’s not a full-time job unless you do it full-time.
Even if you play the game and gig at peak times and seasons, you’ll also have the costs of gas and maintenance associated with keeping your gig in operation. However, like any business, there are ways of making it work. The trick is to run it like a business and put all of your time into it. In other words, if you want to replace your full-time job with a gig economy job, you have to do it full-time. Probably more.
Before you let this column kill your ambition, I suggest you research the various opportunities out there. All of them can be profitable, but there are many factors to consider. Like every other fabulous financial opportunity, if it sounds too good to be true, it probably is.