Gig Economy Infiltrating Retail and Restaurant Industries

Companies turning to on-demand work for staffing needs.

May 22, 2018

WASHINGTON – According to the Pew Research Center, 1 in 4 Americans earn money from the digital platform economy. And a 2016 report by MBO Partners found that there are nearly 40 million self-employed workers over the age of 21.

In case you aren’t familiar, the gig economy is a labor market based in short-term contracts or freelance work—as opposed to permanent and full-time jobs. It’s not just a buzzword anymore; “Gig” workers represent 34% of the workforce—and will grow to be 43% by 2020.

"We're seeing only one trend here, which is that the gig economy is big and getting bigger," said Diane Mulcahy, a lecturer at Babson College and author of "The Gig Economy." "Companies will do just about anything to avoid hiring full-time employees. Add to that the fact that there is no job security anymore, and workers are increasingly aware that they need to work differently if they want to create any sort of stability for themselves."

And now it’s made its way to the retail and restaurant industries. A Wall Street Journal article attributes the rise to “stagnant wages, chronic underemployment and growing inequality.” With on-demand workers, companies no longer have to worry about benefits and paying for overtime.

Although Boulevard Burger & Brew in Richmond, Va. uses an app called Snag Work as a last resort, they use it to fill about three shifts a week, often during peak weekend hours. Five Guys restaurants in Richmond have been using Snag Work to fill about four shifts a week, according to Sara Ortiz, the vice president of human resources for Five Guys.

The new trend certainly doesn’t create any stability or security for workers, and an independent contractor has less legal rights and protections than a full-timer. As a result, legislatures around the country are discussing bills to define the distinctions and regulatory framework around gig workers.