The gig economy, once seen as a viable alternative for those seeking flexibility in their work lives, is now presenting significant challenges for many individuals relying on it for income. Recent reports indicate a marked decline in average earnings for gig workers as competition has intensified in the sector compared to previous years. This trend raises concerns, especially as the prospect of an economic downturn looms on the horizon.

As fears of a potential recession grow, many workers are considering gig jobssuch as delivering food or driving for ride-hailing servicesas a fallback option. However, achieving a sustainable income through gig work is becoming increasingly difficult. According to a Colorado-based driver who has been active on ride-hailing apps since 2019, the current landscape has made it "not worth the money." This sentiment echoes across the gig economy as workers grapple with dwindling earnings.

Historically, gig work has served as a source of income during economic downturns. For instance, during the aftermath of the 2008 financial crisis, companies like Uber and Instacart flourished by recruiting a plethora of independent contractors. Similarly, while traditional businesses suffered during the early months of the COVID-19 pandemic, certain forms of gig work, especially food delivery, became essential for many seeking to make ends meet.

However, the current situation is starkly different. If another recession hits, gig workers are expressing doubts about the potential for similar relief. One driver shared her experience of earning approximately $66,000 in gross income during her first year with Uber. Fast forward to 2024, and despite investing a similar number of hours, her earnings plummeted to just half that amount. Concerned about the repercussions of sharing her identity, she chose to remain anonymous for this report.

In light of the declining income, this driver is actively seeking alternatives to gig work. She is applying for full-time positions and considering launching her own food truck. Like many others in the gig economy, she faces the burden of self-financing her necessary expenses, such as fuel and vehicle maintenance, which have surged in price due to inflation. Consequently, many of the trips offered to her through apps are becoming less lucrative.

Interestingly, she has noticed that her most profitable rides tend to occur during inclement weather when other drivers opt to stay home. We make more when its snowing, she remarked, highlighting the stark reality of fluctuating demand.

The onboarding process for gig work can also be frustratingly slow. In many urban areas, potential workers are facing weeks or even months of waiting to get approved for opportunities in delivery or ride-hailing services. One gig worker in Washington state recounted her experience of signing up to deliver for Instacart nearly a year ago, yet she is still awaiting approval. "During the pandemic, a lot of people rushed to sign up on Instacart. I think Im just stuck behind all of that," she stated.

Instacarts management has acknowledged the delays, with CEO Fidji Simo addressing the issue during an earnings call. "Our shopper supply is very healthy. In fact, we still continue to have a waitlist in most cities," Simo confirmed, suggesting that the demand for gig work continues to outpace the available opportunities.

Although the landscape may appear grim for traditional delivery and ride-hailing gig work, there are other avenues emerging within the gig economy. Workers can now find tasks such as waiting in line for concert tickets, securing restaurant reservations, or even purchasing trending products from celebrities. Robert Padron, the Chief People and Experience Officer at Arise, a company that provides gig workers for customer service roles, noted that there is still an active demand for gig workers. He explained, If one client doesnt have a need for human capital today, there may be 15 others that do. This flexibility distinguishes Arise from the more limited opportunities found on many delivery or ride-hailing platforms, where options often boil down to a single type of task.