AI and the Gig Economy
- Andy Srivastava
- Jul 16
- 3 min read
Updated: Jul 28
Freelance work is and has been a rapidly growing facet of the workforce. In the last decade, the number of freelance workers has more than doubled from 15% of the workforce to 38%, and the number is expected to keep increasing. After all, freelancing can be an appealing prospect. You get to be your own boss, decide on the projects you want to put energy and time into, and you get more control over your day-to-day.
But, according to a Forbes article published in 2022, about a third of freelance workers struggle with the unstable income that the gig economy begets. As someone who spent years working retail jobs with inconsistent hours, I know firsthand how stressful it can be budgeting and planning your expenses when you don’t know exactly how much money you are making every paycheck, and even then, I had something freelancers do not, the security of regular paycheck.
With the rapid rise of AI, we are also seeing the freelance landscape change dramatically.
AI can be incredibly helpful for the more menial and/or repetitive tasks a freelancer may have to do, such as planning out daily tasks, making invoices, data entry, managing your social media presence, and even being your personal assistant, freeing up more time to spend on projects. AI is also helping to streamline the process of matching freelancers to clients using algorithms that can use a freelancer’s skills and work history to recommend them jobs that fit their skill set.
However, with the rise of AI client-freelancer matching comes an increase in the reliance on reputation systems. While reputation systems have always been important in the gig economy, the rise of quantitative measurements of reputation will make it harder for those just starting out to find their footing. Well established freelancers will be far less affected by this change, but newer freelancers will be forced to take lower pay to secure contracts.
At least in the short term, according to research done by Olin Business, AI has caused a decline both the number of available jobs for freelancers and the total earnings made, and the fields that seem to be most affected are those in writing and related fields, who saw a 2% decrease in job postings and a 5.2% decrease in earnings, and image-related workers, who saw a 3.7% drop in jobs and a 9.4% loss in earnings. While this trend will most likely continue in those fields, it’s too early to say how AI will affect freelancers in other areas of work.
Surprisingly enough, it’s the higher skilled freelancers that are losing out on more work compared to their lower skilled counterparts. AI is helping to level the playing field, so higher skilled freelancers are losing the competitive edge that used to put them a cut above the rest.
We are also seeing new kinds of gig work emerge at the hands of AI. One of the fastest growing fields with the rise of AI is prompt engineering, which involves feeding the generative AI bot a variety of different inputs using prompt techniques to achieve a specific output, helping businesses leverage generative AI to the best of their ability. We’ve also seen the creation of AI ethics specialists, who work with businesses to ensure they create and implement good policies for AI use as well as the creation of AI literacy trainers, who provide hands on training with AI to teach people the fundamentals.
All in all, for the individual freelancer, AI can be a big help, trivializing menial tasks, and streamlining the process of finding jobs and contracts. But overall, it feels too early to say if AI will be a help or detriment to the gig economy. AI is bringing rise to new jobs and job opportunities but is also leading to a decline in longstanding freelance fields like writing and image creation. As AI continues to expand, it will be very interesting to see the long-term effects on the gig economy. But one thing is certain, to make it as a freelancer in the upcoming years, leveraging AI for your benefit is a must.
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