The gig economy has transformed over the past year, especially as more consumers come to rely on delivery intermediaries, including DoorDash, Uber Eats, and Instacart.

What is a gig economy company?

The gig economy, also referred to as the sharing economy, consists of independent contractors providing services for everything from personal transportation—including Uber and Lyft—to food delivery—such as DoorDash and Instacart.

Top gig economy companies

Insider Intelligence has rounded up several key players in the gig economy space that have seen strong growth during the pandemic. Take a look at what the current state of the space looks like.

Uber and Lyft

Uber and Lyft will continue their duopoly of the ride-hailing market. Uber’s ride-share sales will reach $37.10 billion in 2023, an increase of 27.0% over last year, and $8.22 billion more than the company pulled in back in 2019.

Lyft, on the other hand, has also rebounded from the pandemic, but is still losing share to Uber. Lyft’s sales will grow by 20.9% this year, but its share of the market has dropped from 32.9% in 2020 to a projected 29.1% this year. Uber will claim 68.0% of ride share sales in the US this year.

By the end of 2023, Uber will surpass $37. billion in ride-hailing sales, up from $29.1 billion last year. By comparison, Lyft has rebounded as well but is still losing share to Uber. Lyft’s sales will grow by 20.9% this year, but its share of the market has dropped from 32.9% in 2020 to a projected 29.1% this year.

We estimate that 70.9 million people in the US were ride-share users last year, still slightly below 2019 levels (71.7 million). But the users who have come back are spending more than they used to, although inflation plays a role in this.

DoorDash

DoorDash’s growth owes much to its highly engaged DashPass member base, which reached an all-time high in Q3 2022. Total orders rose 27% YoY, more than expected, thanks to a steady stream of new customers as well as increased order frequency from existing ones.

This year, the company will see sales grow as they expand into non-grocery categories and take advantage of consumers’ growing affinity for food on demand. In January, DoorDash launched a new service called Package Pickup that simplifies consumers’ returns process for a flat fee of $5 (or $3 for DashPass subscription members). The service lets consumers request a delivery associate who can collect up to five prepaid packages and deliver them to a dropoff location like The UPS Store or FedEx Office.

While DoorDash’s new service could deliver some incremental revenues and work for delivery associates, it likely won’t have a significant impact on the company’s bottom line.

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Uber Eats

Uber Eats has become a core revenue driver for its parent company: The division brought in $14.3 billion in gross bookings in 2022, which is nearly as much as the company’s ride-hailing business generated, per the latest earnings report.

Uber is also using its ride-sharing business to drive users to its delivery service; CEO Dara Khosrowshahi noted that the mobility segment provides as many new customers to Uber Eats as the company’s acquisition efforts on Google, Facebook, and TikTok combined—at a quarter of the cost.

Last year, Uber Eats is getting into the rapid grocery game with the UK launch of Uber Eats Market, which is a partnership with frozen grocery chain Iceland that aims to deliver products in as little as 20 minutes, per The Grocer.

Instacart

Instacart will retain its status as grocery delivery king this year, capturing 73.0% of US digital grocery sales among third-party delivery services, per our forecast. 

Instacart’s growth exploded in 2020, with sales increasing by 229.7% over 2019, for a total of $23.42 billion.

Instacart is expected to continue showing strong growth over the next two years—rising to $35.00 billion in sales by 2023—but its share of the overall grocery ecommerce market will drop slightly from 21.3% to 20.0% over this time, and its share of the grocery delivery intermediary market will drop from 84.2% in 2020 to 68.2% in 2023.

Future of gig economy and gig workers

There’s no doubt that gig workers provide businesses with tremendous flexibility to scale and meet demand. Those benefits, however, come at the cost of growing employment dissatisfaction. Gig workers are increasingly encountering challenges due to rising gas prices, a tight labor market, and growing momentum for legislation that could increase their costs.

In fact, the US Labor Department released a proposal that would make it easier for workers to be classified as employees, qualifying them for benefits such as a minimum wage and overtime pay.

Under the current guidelines, the two most important factors in determining whether a worker should be classified as an employee are the nature of the work and how much control the worker has, and the worker’s opportunity for profit or loss. The narrow criteria made it easier for companies like Uber and Lyft to keep drivers classified as gig workers, but also increased the likelihood of misclassification.

The new rule would expand the number of criteria needed to determine whether a worker is economically dependent on their employer for work, or is in business for themselves. Only by taking the “economic reality of the whole activity” into consideration, the Biden administration argued, can workers be properly classified as independent contractors or employees.