TransUnion Live: The State of the US Gig Economy

Andrew Goss/Host:

Well, welcome everybody to another episode of TransUnion Live on LinkedIn. I'm TransUnion's Andrew Goss/Host, and I'm excited to be joined by my esteemed colleagues, TransUnion's Senior Director of Gig Economy, Tracey Lazos, and TransUnion's Senior Consultant of Gig Economy as well, Christina Petersen. Welcome, you two.

Tracey Lazos/Sr. Director Gig Economy, TransUnion:

Thank you.

Christina Petersen/Sr. Consultant Gig Economy, TransUnion:

Thank you for having us.

Andrew Goss/Host:

Yeah, thank you. So we're here today to discuss the current state of the US gig economy, both from a consumer and a worker perspective based on recent TransUnion studies. Now, before we begin, I have a quick housekeeping note for the audience that I always start these conversations off with. We welcome your questions as long as they're related to today's conversation. Just put them in the comments area below. If they're applicable and we don't get to them during today's conversation, we'll do our best to respond to you afterwards. Now, let's get started.

So to kick things off you two, can you explain how we define gig economy platforms for the purpose of these studies? And can you tell us how we define gig platform consumers and workers? Cover any demographics in here. We'll touch on consumer age groups and types of gig platforms.

Tracey Lazos/Sr. Director Gig Economy, TransUnion:

Excellent. I'll take this, Andrew. We defined gig platforms as technology-based companies that perform real-time transactions and matching between a supply and demand of either a services or a good. We covered both the consumer side and the worker side, consumers being those that spend money to get the goods or services, and a worker as someone who earns money on that same platform. In our surveys, we did conduct two different surveys, one for the consumer side, one for the worker side, and got about 1,000 US based adults. So 18 or over respondents to those surveys. We covered platform types such as transportation based that have delivery of either restaurant or groceries, ride-share, freelance and professional services and home-based services that are more around child caregiving, walking your dog, doing services around your home like cleaning and household type maintenance services. So covered the gamut of that. The last of which would be asset sharing, and that's your sharing of either a vehicle or a real estate of some sort.

And in terms of the demographics that you asked about, we did cover a generational demographic as part of it. We really wanted to see what the behaviors and responses are across generational divides. So we included in that the traditional ones of Gen Z, millennial, Gen X, baby boomer, to see where there are similarities and differences in the responses there.

Andrew Goss/Host:

Cool. Christina, anything else to add there or should we move on to-

Christina Petersen/Sr. Consultant Gig Economy, TransUnion:

No, I think Tracey covered the whole thing, so I think we're ready for the next one.

Andrew Goss/Host:

Cool. Okay, so let's turn to the study findings. Let's get rid of all the base conversation here, and this is probably what everyone is looking for. How much did consumers say they spend on gig services, both overall and by generation?

Tracey Lazos/Sr. Director Gig Economy, TransUnion:

Yeah, so overall, the majority, so 74% said that they spent just somewhere between 250 and under on the gig economy services. That did drop from our last findings from our survey in the second quarter of last year, where it was 64% were spending under that $250 mark. So it does look like spending is going down slightly, but it's still very strong. And we also saw that 49% were spending less than $100. So definitely room to grow there in opportunity to sell more services, sell more goods. We did find that millennials and Gen Z were the top spenders. That's probably not super surprising as being more digitally native generations that they're more used to transacting through digital devices, and so they're more comfortable with spending more in that. Both of those groups are spending between $250 and $750 a month, so about a third of them spending between that amount.

Whereas baby boomers, that demand softened quite a bit, with them spending less on platforms than the younger generations. We do expect that as more baby boomers move into retirement, that that trend may continue as they have less disposable income than they do when they're working on more of a fixed budget, that they may continue to reduce their [inaudible 00:04:54] on platforms and off platforms in general.

Christina Petersen/Sr. Consultant Gig Economy, TransUnion:

Yeah, I think it's worth adding too, we did ask around who power users are and we define power users as those that use gig apps several times a week. And I think really, in line with a lot of what Tracey just said, those power users, we're finding them really concentrated with Gen Z and millennials. So I think that really fits with our findings. And those power users, it makes sense, but they were more likely to spend the larger amounts in that like $250 to $750 range. We were finding very few users across the board, so spending over $750.

Andrew Goss/Host:

Got it. So a lot of the base findings are very much in the direction one would think, but let's hone in a little bit more on those generations. So how frequently did the different age groups say they use the gig platforms and what are the most popular gig services for those generations that they're tapping into?

Christina Petersen/Sr. Consultant Gig Economy, TransUnion:

Yeah, absolutely. I can talk about this one a bit. We found that grocery delivery was the most commonly used gig service across the board. So we were finding really high numbers, like 50% of Gen Z, 40% of millennials, but still 22% of Gen X, 10% of baby boomers indicated using grocery delivery at least once a week, which was pretty remarkable. But we also saw that ride-share and food delivery were also very commonly used, but more concentrated among the younger generations of Gen Z and millennials. We're finding about 45% of Gen Z, 45% of Gen Z were doing ride-share at least once a week, 55% of Gen Z using food delivery at least once a week, and just a little bit lower with millennials, 35% and 45%. So they're really using a lot of these gig services with some regularity, and I think it's worth zooming in a little bit on Gen Z and millennials. We saw utilization of gig services really across the board. They're using lots of different kinds of gig services on a regular basis. Things like grocery delivery, food delivery, ride-share, car share.

And I think some of this can really speak to the stage of life these consumers are in. I think back to my late teens and early 20s, I was ordering delivery to my dorm room at nine o'clock at night. They're really looking for that ease and convenience, maybe operating a little bit of a different schedule, and gig services are really set up to cater to that. So I think that really shines a light on what we're seeing in our survey findings.

Tracey Lazos/Sr. Director Gig Economy, TransUnion:

At the same time, I think that it really shines a light on the opportunity to market to and increase usership of some of those older generations. So finding ways of appealing to them with the convenience of these services. So as generations get older, may want to drive less, lean into more of the ride-share side. May want to spend less time or don't have the ability to go grocery shopping, how do you make that accessible to them to really cater to the older generations as their needs shift in a very different way than when you're younger?

Your motivation may be different, but at the end of the day, still looking for that ease, that convenience of being able to have access to the services that you need, and particularly on those home-based services of making those available and known to older generations that may lean more towards they're coming from the days of Yellow Pages and being able to go look up who they're going to go to for a vendor and making those home-based services a little bit more accessible, marketing to those and making them aware to some older generations may expand the usership of the platforms.

Andrew Goss/Host:

Yeah, that's a great call-out, Tracey. I think of you, right? There's not a one-size-fits-all marketing efforts across these generations.

Tracey Lazos/Sr. Director Gig Economy, TransUnion:

That's right.

Andrew Goss/Host:

You need to be very focused on your messaging for those folks. Cool. Anything else in that area before I have a quick commercial message?

Christina Petersen/Sr. Consultant Gig Economy, TransUnion:

Go for it, Andrew.

Tracey Lazos/Sr. Director Gig Economy, TransUnion:

I think we're good.

Andrew Goss/Host:

Okay. Just a reminder to everyone in the audience, if you have any applicable questions, please put them in the comments area. We'd love to get those questions today. Okay. So back from the commercial break, I have one more specific question around the consumer survey. What's driving the consumer use of these gig services and why are users choosing certain providers over others?

Christina Petersen/Sr. Consultant Gig Economy, TransUnion:

Yeah, absolutely. I think far and away, convenience. Convenience is really at the heart of demand for gig services and that really makes sense. The gig economy is all about facilitating that peer-to-peer exchange of goods and services, creating convenience and ease where those two factors may not necessarily exist on their own. So this motivation for convenience really aligns with the core value proposition of the gig economy. That said, we did see some nuances when it comes to demand for gig services across generations. So with Gen Z and millennials, we found that they were more influenced by cost. Whether a gig service is cheaper than the alternative, so for example, whether it's cheaper to use a ride-share versus a traditional taxi, or whether ordering groceries for delivery through a gig service is cheaper than directly from the grocery store. Those are the kind of things that really influence our younger consumers, but they were also more interested in loyalty programs. They wanted to be rewarded for their loyalty and keep coming back to the gig service over and over again. So that would really drive which gig platform they may go for.

They were more interested in being rewarded for their loyalty, but we found that older consumers, Gen X and baby boomers, they were more likely to say that they use gig services because it helps free up their schedule to do more important things, and that convenience is just really key. They were really leaning into that. So we saw that by and large, the younger consumers are really focused on cost-effectiveness. Is a gig service going to be cost-effective for them? Are they going to be rewarded for their loyalty? Whereas the older consumers, they're really driven by the time-saving nature that gig services offer.

Tracey Lazos/Sr. Director Gig Economy, TransUnion:

And with the overall being driven on that convenience side from leaning into gig at all being a convenience cost was by far the number one reason why they picked which platform to go to. So once they've made the decision that, "I'm going to transact on a gig platform and that's how I want to get my groceries, get my restaurant delivery," whatever that might be, it's the cost. It's around the fees that are associated with it, the cost of use that really drove where they wanted to go and which platform they were going to use.

We also found that with younger generations, there isn't as much brand loyalty. They're willing to have multiple platforms of the same service type, versus a single platform that they're most loyal to, really driving that need to provide those loyalty factors, the loyalty points for the younger generations, their cost and fees and structure around that to really incent users to come to a particular platform and not just go there but stay there.

Andrew Goss/Host:

Yeah, makes sense. I am reflecting on my usage of gig economy platforms and how I use it switching between different apps to find the best deal, but cool. I'm going to turn over now to the gig economy worker side. Doesn't mean that we can't come back to consumers, but let's get a baseline of them. Right? Who are they from a demographic perspective? Why did they say they took on gig work and what factors most influenced the type of work they took on gig economy work?

Christina Petersen/Sr. Consultant Gig Economy, TransUnion:

Yeah, absolutely. We actually see some similarities between gig consumers and workers in terms of the who. While workers of all generations were represented in our survey results, the highest levels of participation were found with millennials, closely followed by Gen Z. 78% of our respondents that identified as a millennial and 67% of those that identified as Gen Z were earning income from at least one gig platform, which is just a really high representation. Tracey, do you want to go a little bit more into what influenced them?

Tracey Lazos/Sr. Director Gig Economy, TransUnion:

Yeah, absolutely. So for the baby boomers, while they weren't the larger audience of the participants, but across past, current and future, their primary motivation was supplementing their income. So that really leans into as they retire, as they don't have as much of that fixed income, looking for ways to supplement that, to maintain their lifestyle, to be able to pay bills, to continue to grow there. So definitely expecting to see an increase in that as more baby boomers retire, that they may lean to this as a supplementary income that they may be looking for.

Across generations though, with the largest respondents at 37% use gig economy as their primary source of income, which is a pretty high percentage of the US population if you think about that 37% looking to this as their primary source, which really leans again to the ease of use, the flexibility of that.

Now, a significant portion who exited the gig economy so that they were just using it to earn money for a big purchase. So whether it be seasonal to do some type of shopping, whether it be that they were saving up to buy something large, they were really looking to the gig academy to supplement their income for a fixed period of time, and that was the driving factor of the largest driving factor of people exiting the gig economy. But again, that was just 20%. Most are in it and are planning to stay in it and continue to work in this space either as their primary or supplementary.

What was additionally interesting though is that not one platform type really was the most frequently used. So none were over 25% of the response in terms of what type of platform they're working on. Driving for ride-share was the most popular choice, but only at 23%, followed then by driving for a restaurant delivery and grocery delivery, very closely followed then by workers for caregiving services and other home-based services. So they're all ranging in that 20% to 24%, really across the board. So showing that there's not any one platform type that's really driving the participation, but it really is leaning into all different types of skill sets that they're looking to use.

Andrew Goss/Host:

That's shocking to me, the percentage that use gig economy work is their primary income. Okay. So moving on, still staying in line with the gig worker side of the house, what percentage of workers were satisfied with their gig work and why were others not satisfied?

Tracey Lazos/Sr. Director Gig Economy, TransUnion:

Yeah, I can take this. Well, first let's focus for a second on the fact that they're all leaning into this from the worker side, just as with the consumer side for convenience. So that's the main reason why people are leaning towards the gig academy for their work is for convenience. 47% of our respondents said that that was the driving factor behind why they're doing it, with just below that at 39% saying, "It matches my skill set." So they're able to use their skills, they're able to do it in a convenient way, and that really does lead to very high satisfaction. The majority of the respondents on this said that they were satisfied. So 29% were very satisfied, 35% somewhat satisfied. So over half are satisfied in their work in the gig economy space. Work flexibility, that convenience is the driving factor by far, at 71%.

So very consistent with why consumers are on platforms. Workers are using it as their primary income source because it's flexible, because it puts them in the driver's seat, no pun intended, on why they're using gig platforms to be able to work. They also find it enjoyable. They like what they do and they're able to use their skills to do so, which is really indicating that this whole workspace is an area not only for income generation, but also for career development. With this being the primary income source for such a large population, it's an opportunity for them to really create a career out of this, to be able to leverage platforms in a way that can grow their development skill set wise, while still maintaining control over their schedule and the convenience that comes along with that.

41% did say that they're looking at future earning potential as a reason for their satisfaction. So they're expecting to continue to make money in this way or to make more money. Now, only 11% were dissatisfied. Very high satisfaction rate in this space, which speaks highly to the way platforms are serving their workers and moving in this space, with only 11% dissatisfied. The majority of that cited that they didn't earn enough money as the driving factor between that. Just over 50% said they weren't earning enough money on that, and 20% needed to work too much to pay the bills. So it just, again, that financial aspect of it, but again, only 11% cited that they were dissatisfied in the space.

Andrew Goss/Host:

Got it. That is pretty amazing that there's only 11% dissatisfaction.

Tracey Lazos/Sr. Director Gig Economy, TransUnion:

I know.

Christina Petersen/Sr. Consultant Gig Economy, TransUnion:

It's really cool. It's pretty amazing seeing the results.

Tracey Lazos/Sr. Director Gig Economy, TransUnion:

It really is. It speaks very highly to how the industry has been serving the worker base.

Christina Petersen/Sr. Consultant Gig Economy, TransUnion:

Yeah, definitely.

Andrew Goss/Host:

Okay, well, moving on, expanding a bit, I think of that on this previous question. Why did gig workers, why did they stop working for a platform?

Christina Petersen/Sr. Consultant Gig Economy, TransUnion:

Yeah. The most common reason that we saw in our results for stopping gig work was due to receiving a full-time job or a raise and no longer needing the extra income. 38% of respondents gave this answer, and I thought this was really interesting because if you remember what Tracey said just a little bit ago, 37% of earners in our report said that they use the gig economy as their primary source of income. So I see 37% using as their primary source of income and 38% saying that they left because they got a full-time job is really interesting. There's a close alignment here. So just worth noting.

But in terms of other reasons, we saw a pretty even split in percentages of reasons why, around high 20% saying that they didn't make enough money, the costs of doing gig work were too high or they just weren't getting enough work. But I think what's really interesting is that safety concerns were raised by just a very small minority of respondents. Just 7% of people said this, and I think this indicates that platforms are implementing strong trust and safety protocols, but they need to continue to, to foster that satisfaction and retention among their workers.

Andrew Goss/Host:

Okay. Anything, Tracey, to add to that or shall we move on?

Tracey Lazos/Sr. Director Gig Economy, TransUnion:

No, I think that Christina covered it on that one. We can go ahead and move on there.

Andrew Goss/Host:

Okay. Well, maybe I'm in the Halloween mood here, but I do want to look into a crystal ball here. How did gig workers say they envision their future working status on a gig platform? What does the future of work look like for them?

Tracey Lazos/Sr. Director Gig Economy, TransUnion:

Well, not surprisingly, since so many are satisfied in the work that they're doing and they're using it as their primary source of income, 64% said that they will continue to work either at the level that they're at or even greater going forward. They're really looking to increase their work in this space and continue to leverage it. Gen Z in particular are looking to increase their hours or increase the number of platforms that they're looking to work on. So really continuing to lean into the fact that they're getting good employment out of this. They're getting good income, they're happy with the work that they're doing.

They are stating though that worker loyalty and engagement for greater satisfaction and retention is important. Finding ways to continue to serve the workers, to keep them on platform. As more and more workers are looking to expand the number of platforms that they're working on, the types of platforms that they're working on, it's going to be challenging for platforms to retain that loyalty in their worker base. And they obviously want them to work for them first and use their platform first. And finding ways to incent that loyalty through loyalty programs, even for the workers through providing additional services available through platform, the more they can make their platform sticky and the services available through that will increase the likelihood that [inaudible 00:21:50] with them for supplying to other platforms.

Christina Petersen/Sr. Consultant Gig Economy, TransUnion:

Yeah. I'll chime in with another small anecdote. I just thought what was really interesting in our results around envisioning future work is that Gen Zers were far more likely to say that they intend to stop working on a gig platform and get a full-time job in comparison to the other generations. We're still talking small percentages. Gen Z said about 14% of them said that they intend to stop working and get a full-time job, but the other three generations represented were between 5% and 8%. So it's a big difference. Even though we're talking small percentage, it's a big difference. And I just think this could be a potential indication that Gen Zers are finding valuable work via gig platforms, while they may explore full-time opportunities and potential career path, speaking again to that stage in life that they have. So that's a fun little random one that I saw. I was like, "Wow, worth talking about."

Andrew Goss/Host:

For sure. Okay, well, before I get to my last question, I wanted to remind everyone in the audience, if you have any applicable questions, please put them in the comments area below and we'll get to them hopefully. So now back to my last question. Both of you, this is the time where I say give me your top two learnings, and in this instance, that gig platform should apply to their operations?

Christina Petersen/Sr. Consultant Gig Economy, TransUnion:

Yeah, I can start out with one, Tracey. Is that okay?

Tracey Lazos/Sr. Director Gig Economy, TransUnion:

Yeah.

Christina Petersen/Sr. Consultant Gig Economy, TransUnion:

All right. So what I would say is to lean into convenience. Convenience is at the heart of both consumer and worker motivations, and we really saw this across both studies. For gig platforms, I would say make sure that your users, whether they're intending to spend or earn, make sure that they can onboard quickly and securely is absolutely key. Make things convenient for them from the get-go by providing an onboarding experience that's both seamless and secure. So consider things like auto-filling known data or quietly reviewing risk indicators for minimal friction.

We saw in our research that the ability for workers to onboard quickly is particularly crucial. A third of our worker respondents said that this influenced the type of gig work that they decided to do, whether or not they could get on and start earning money. So this is really important, particularly for workers, but really across the board.

It makes a difference for consumers too. For example, if I'm seeking support from a gig-based service for last minute caregiving or childcare conflict, if I can't onboard quickly and securely, I'm likely going to abandon my search. I need to make sure that I can fill that requirement and make sure that my child is secure. So it really is important across the board, making sure that your users, workers and consumers can get on and can make sure that their needs are being met. But I also think that convenience can show up in other ways. This can mean making life easier for your consumers by presenting the right service or the right offer at the right time. So supporting our users in other ways that they may find valuable.

Our research indicated that gig workers want gig platforms to provide services like identity protection, credit monitoring, supplemental insurance coverage, financial education, ways that can help them bolster their financial well-being. So when services like this are provided by the gig platform itself, gig workers can feel more supported, but they can also benefit from the convenience of having multiple needs met, things like income generation and financial wellness in one place. And this really increases the stickiness of the gig platform, really bolstering that loyalty and satisfaction. [inaudible 00:25:23]

Tracey Lazos/Sr. Director Gig Economy, TransUnion:

Absolutely. I completely agree with what Christina was saying on that. The one thing I'll add is that it's important not to look at the user base, whether it be the consumer base or the worker base unilaterally. As we found, there are generational differences on both how people are consuming services and goods through the gig economy and how they are working in the gig economy. So looking at ways of attracting user base in unique ways to those audiences. So segmenting the audiences, looking out and giving messaging that's specific to their needs is very important to continue to attract new users, as well as to provide those loyalty program services, additional capabilities to them at the appropriate place and time on your platform.

This will help as the industry continues to be more and more competitive. The user base is not going down. People are using it. People are leaning into it for those convenience factors, for the income factors. As that continues to grow and the demand increases, it's going to be ever more important for platforms to be reaching their audiences with the right message and expanding their user base, diversifying their offerings, and continuing to meet the spenders and earners exactly where they need to be.

Andrew Goss/Host:

Got it. Okay. Well, that's certainly interesting perspectives and something I heard throughout this, but you did a great job summarizing it there. So we have a question from our audience, and if we can't get to this, if we don't have the direct answer now, we can always circle back around with this person, but Drew Flock with Technolutions, I believe, asked, "For those workers using a gig provider as a primary income," that 37% that I think Tracey referenced, "What was the median number of providers that they worked for?" Do we have that, by chance?

Christina Petersen/Sr. Consultant Gig Economy, TransUnion:

That is such a good question, and I think we may have it, but I don't know if we have it right in front of us. Tracey, do you?

Tracey Lazos/Sr. Director Gig Economy, TransUnion:

No, we don't have it right in front of us, but that's certainly something, Drew, that we can circle back and provide that information to you.

Christina Petersen/Sr. Consultant Gig Economy, TransUnion:

Good question.

Andrew Goss/Host:

Okay. Cool. Any final thoughts from you two before we say adieu?

Tracey Lazos/Sr. Director Gig Economy, TransUnion:

I think there was one other question around just the general gig economy, learning more about data in this space. As we said at the beginning, this was based off of two studies that we did this year. Those studies are available if you'd like to see them in more detail, see additional data there.

Andrew Goss/Host:

And we'll put that up on the screen, by the way. We'll have some QR codes as well. So you will see it in a couple of minutes. So anything else from you, Christina and Tracey?

Christina Petersen/Sr. Consultant Gig Economy, TransUnion:

I don't think so. Thanks for hosting this great conversation.

Andrew Goss/Host:

Yeah, so just some quick plugs at the end here before we say goodbye. So thank you, Christina and Tracey, for these great insights. It really does amaze me, the breadth and depth of knowledge that we have at TransUnion across so many industries. I'm not blowing smoke. It is amazing. And a special thank you to the audience for joining us. If we didn't get to your question today or if we weren't able to answer your question, we'll do our best to get back to you soon. Also, a reminder, you can see the recording on LinkedIn on this page if you weren't able to join right away, and we'll also have it on transunion.com.

And to download the findings from the recent studies we discussed today that we were just talking about, we'll put those web addresses and QR codes up on the screen and you can get to them there. And you can also find them by going to the LinkedIn Live event page description tab, and they're there as well. So until next time, we'll see you on TransUnion Live.