The idea of a side gig sounds great: You set your own hours, you're your own boss, and you don't necessarily have to give up your day job. Maybe that's why, according to a study from Intuit, nearly 4 million Americans are working in the on-demand economy.
But a new study from consumer lender Earnest shows that the vast majority of those 4 million people aren't making very much money by working on any of the major gig economy platforms. Earnest looked at loan applications from tens of thousands of people who got at least some of their income by working through Airbnb, Uber, Lyft, Etsy, Postmates, Doordash, and others. They found that 84 percent of gig economy workers make less than $500 a month from their side hustle.
Why Airbnb Rules
The big exception seems to be Airbnb hosts, who earn far more than workers on other platforms. On average, they make $924 a month from renting out their space, and almost half make more than $500 a month.
Since we can't tell how many hours anyone is putting into these platforms, it's hard to tell which is the 'best' for the people who use them. But Airbnb is fundamentally different than most of the others, because it allows its users to monetize an asset rather than their labor.
Here's how average monthly earnings stack up for the rest of the major gig economy players:
Lyft drivers, interestingly, are averaging more than Uber drivers. But Earnest says that drivers who work for both platforms make more on Uber.
Beyond the averages
These numbers are averages, and averages tend to be high thanks to a small number of very high earners. The medians tell a different story. The median earning for Uber drivers is just $155 a month, meaning that half of Uber drivers make more than that amount and half make less. For Lyft, it's $210. The lowest median is at Etsy, at $40 a month, and the highest is again at Airbnb, at $440.
This data was taken from loan applications, so it's possible that the workers in the study aren't making as much as other people--notably, those who don't need loans--doing business on these platforms. But it's still a warning signal for anyone trying to make it work in the gig economy, and a strong hint that the platform you choose may matter more than you think.