As workers crave a regular paycheck, could the gig economy's days be numbered?

The gig economy has boomed in recent years, luring talent away from the rigidity of a 9-to-5 with promises of freedom and flexibility. But now, is the gig up? 

Forty-two percent of delivery and rideshare drivers are considering leaving gig work within the next 12 months due to low or unpredictable earnings, lack of benefits, and the high cost of performing the work, according to a survey by payroll company Everee and the Restaurant Marketing Delivery Association, a nonprofit that advocates for local and regional delivery companies.

"So many of the folks that responded said gig work is their main source of income," says Andrew Simmons, President of RMDA. "We thought that it was maybe primarily filler income, but there is a high number of drivers that think that this is their full time job, and they might even work for multiple gig companies at the same time." 

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Inflation rates are lower than their peak at 9.1% in June of 2022, but still holding steady at an unusually high 4.98%, the Bureau of Labor Statistics reports. According to the Everee survey, gig workers are struggling to manage these economic factors: 40% of drivers are working less due to high gas prices, while 38% find themselves working more to try to combat the rising costs. Nearly half of these workers report picking up multiple jobs to make ends meet. Seventy-six percent are living paycheck to paycheck, yet 45% have turned down a new gig because of a lengthy onboarding process, and 42% have turned down work because of the time it will take them to receive their wage. 

"Gig workers are working four or five jobs together and they're bringing in a pretty hefty amount of money," Simmons  says. "But drivers want to see their payments faster. Some are still getting paid weekly when they need those payments daily." 

In a 2022 study by ADP, 90% of employers said they are at least somewhat aware of flexible pay options, but only 55% of employers offer earned wage access, which enables workers to access their cash as soon as they've earned it, no waiting around for payday. Issues around compensation and pay are gig workers' top concern, outpacing challenges around negative customer interactions and even safety. 

Eighty one percent of gig drivers said they'd give up 1099 flexibility for more money. In an era where companies are already struggling to retain their workbase, failing to provide quick and secure access to financial wellness could spell long-term trouble for companies like Uber and DoorDash.

Read more: Uber and Lyft can now label gig workers as contractors

"There are only so many folks out there who will do that work and want to work for us," says Simmons, who also owns and operates his own restaurant, and employs delivery drivers.  "It's why we're constantly recruiting all the time. Our drivers will be with us for a while, and then they're gone. It could be seasonal, it could be work related, they might end up wanting a standard W2 job." 

To boost his own retention, Simmons works to ensure his drivers are paid as quickly as possible, even if it comes out of his restaurant's pockets up front. Other member organizations of RMDA will ensure every order has guaranteed tips for their drivers, whether or not there's an actual tip from the customers.

"Faster pay, better wages, better payment plans — the problem is that as delivery has gotten to be so large the race to the bottom for what people are willing to pay keeps going down," he says. "And so it's up to the providers to figure out the best way to get them the most amount of money within those parameters that they have."