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The American gig economy is at a strange crossroads. More workers than ever are turning to apps like Uber, DoorDash, and Instacart to pay the bills, even as it becomes clearer that the promise of flexible, lucrative work was always more myth than reality for many.
That tension is showing up in the data. More Americans are turning to gig work even as traditional hiring slows, according to an analysis from Goldman Sachs from last month that found hours worked on platforms have increased this year despite cooling payroll growth across the broader economy. About one in five workers who lost a job, took a pay cut, or got their hours slashed over the past two years ended up turning to gig work, according to Federal Reserve data cited in the report.
As ubiquitous as gig work feels, it’s likely going to grow. By 2027, half the developed world’s workforce is expected to participate in the gig economy in some form, according to Ogilvy Consulting. But all that growth comes with a catch. When too many workers pile onto platforms, pay craters.
China shows what that looks like. Some 200 million people there now work gig jobs, and so many have flooded in that delivery drivers earn about $1 per order and routinely pull 14-hour days. The country’s ride-hailing driver pool tripled between 2020 and 2024 even though the number of rides grew only 60%. Some cities have started warning job seekers to stay away from the industry entirely.
What gig workers are actually earning
In the U.S., the numbers are all over the map. A Human Rights Watch investigation from May 2025 surveyed gig workers in Texas and found they earned a median of just $5.12 an hour after expenses like gas, car maintenance, and phone costs. That’s about 30% below the federal minimum wage and 70% below what researchers consider a living wage. Nearly half said they struggle to afford housing almost every month.
Research cited by the American Enterprise Institute pushes back on that grim picture, finding that skilled freelancers on digital platforms capture nearly half the economic value in each transaction. But the study looked at online knowledge workers like graphic designers and translators, not the delivery drivers and rideshare workers who’ve become the face of the labor rights fight.
What’s harder to argue with is how much control platforms exert over their workforce. Companies track locations down to the foot, monitor how drivers brake and accelerate, record their messages with customers, and use ratings to decide who gets the good orders. Workers can get kicked off with little explanation and almost no way to appeal. And several major platforms now calculate pay using formulas they won’t fully explain, leaving workers baffled about why their earnings swing wildly from one week to the next.
The Goldman Sachs report flagged another wrinkle. Workers who move into gig jobs typically earn only 50% to 65% of what they made per hour in traditional roles. And the gig economy might not be able to catch everyone fleeing a cooling labor market anyway, since demand for rides and deliveries tends to drop during downturns too.
Where things might be heading
Since it’s 2025, there is an artificial intelligence angle to all of this.
A shadow gig market is emerging for the highly educated. Platforms like Mercor, Scale AI, and Surge AI are hiring bankers, lawyers, doctors, and engineers to train AI models, paying anywhere from $20 to $1,000 an hour for their expertise. Mercor alone shells out more than $1.5 million a day to contractors. Even Uber is posting AI training gigs that require PhDs.
But AI isn’t just creating new work. It’s threatening to wipe out old work. Uber recently started letting drivers earn extra cash by completing small tasks that train the company’s AI. The same week, Waymo announced a partnership with DoorDash to test driverless deliveries. The workers doing the training may be making themselves obsolete.
Lawmakers are finally paying attention. In July 2025, Senators Brian Schatz of Hawaii and Chris Murphy of Connecticut introduced the Empowering App-Based Workers Act, which would force platforms to explain how their algorithms work and guarantee rideshare drivers at least 75% of each fare. The European Union has gone further with its Platform Work Directive, which took effect in December 2024 and presumes workers are employees unless companies can prove otherwise.
But gig workers have seen this movie before. California passed a law in 2019 that was supposed to reclassify them as employees, and the platforms spent $200 million on a ballot measure to undo it.
The platforms aren’t waiting around to see what lawmakers decide. They’re already betting big on autonomous vehicles and AI systems that could make the worker question moot.
Until then, workers log on because they have to, platforms take what they can, and everyone waits to see what breaks.