As the U.S. labor market continues to weaken with more than 1.1 million layoffs this year, millions of Americans are turning to gig platforms like Uber and DoorDash to replace lost income. Here’s the full picture behind this growing trend.

America’s Labor Market Is Cooling — and the Gig Economy Is Absorbing the Pressure

The U.S. labor market is entering one of its most noticeable slowdown phases in recent years. As companies reduce hiring, cut working hours, and intensify layoffs, a growing number of American workers are turning to platform-based gig jobs such as Uber, DoorDash, and Instacart to compensate for lost income.

A new analysis from Goldman Sachs shows that the gig economy is increasingly functioning as a safety net for workers affected by declining payroll growth. Among those who lost income, lost a job, or had their hours reduced, about 20% have turned to gig platforms to fill the gap — a clear indication of how essential these flexible jobs have become in today’s uncertain economic climate.

Weak Job Data Signals a Labor Market Under Strain

A report from Challenger, Gray & Christmas revealed that the U.S. saw over 153,000 job cuts in October, marking the worst October reading since 2003. Total layoffs this year have now surpassed 1.1 million, up 44% compared to the same period in 2024.

The sectors hit hardest include technology and retail, with major corporations such as Amazon, Target, and UPS announcing substantial workforce reductions.

Meanwhile, ADP — one of the largest payroll processors in the country — reported that private employers “shed an average of 11,250 jobs per week over the most recent four-week period,” a sharp reversal from its earlier data that showed a modest gain of 42,000 jobs.

This wave of weakening indicators highlights growing cracks in the U.S. labor market and explains why workers are seeking alternative income streams.

The Gig Economy Emerges as a Lifeline for Millions

Goldman Sachs found that gig hours have increased the most in cities where payroll growth has slowed the most. This suggests workers are actively turning to gig platforms to compensate for reduced income or working hours.

Another crucial finding:
15% of individuals classified as “unemployed” or “not in the labor force” are actually working in the gig economy, according to Goldman’s analysis.

This reveals a deeper story — far more Americans are working than official statistics indicate, but in roles that no longer resemble traditional employment.

Why Workers Feel Financially Strained Even When They Are “Working”

While the gig economy helps workers stay afloat, the majority of gig jobs lack the stability, benefits, and wages that full-time positions once guaranteed. Goldman Sachs’ analysis shows:

Gig workers earn only 50%–65% of what they previously earned in traditional jobs.

Many need to combine multiple income sources to keep up.

They lack health insurance, unemployment benefits, and predictable schedules.

Income is highly volatile and shaped by platform algorithms and competition.

This explains why many Americans feel financially squeezed despite having some form of employment.

Lower Immigration Has Slightly Boosted Gig Wages — But Not Enough

Goldman Sachs noted that lower immigration levels this year have tightened labor supply in certain metro areas, leading to slight upward pressure on gig wages. However, this increase is modest and insufficient to offset the income gap between gig jobs and traditional employment.

Gig workers continue to face intense competition, fluctuating platform demand, and rising operating costs such as fuel and vehicle maintenance — all of which keep earnings from fully recovering.

Gig Work: A Short-Term Cushion With Long-Term Limitations

While gig platforms have become an essential buffer for millions of workers, Goldman Sachs warns that this support has limits.
As the report states:

“The support available to some workers in normal times would likely be inadequate for all job losers in a recession.”

In other words:
The gig economy can stabilize workers when economic conditions are manageable, but it cannot substitute for stable, traditional employment in a severe downturn.

Looking Ahead

All eyes are now on the delayed September payrolls report, expected to be released this Thursday. The data will provide one of the clearest signals yet of the labor market’s direction and could influence upcoming monetary policy decisions.

If the report shows further weakening, gig work is likely to expand even more — but it will also intensify debates about job quality, worker protection, and the sustainability of income in today’s evolving economy.

FAQs

1. Why are more Americans turning to gig work?

Because they have lost jobs, lost hours, or lost income — making platforms like Uber and DoorDash the fastest way to generate replacement earnings.

2. Do gig workers earn as much as traditional workers?

No. Gig workers earn only about 50%–65% of what they earned in their previous full-time jobs.

3. Does official unemployment data reflect gig workers?

Not fully. About 15% of people counted as unemployed or “not in the labor force” are actually working in the gig economy.

4. Can the gig economy support workers during a recession?

Only partially. Goldman Sachs says it would be insufficient to support all displaced workers if a full recession hits.