Automation is starting to reduce gig work and pay on major platforms

In short: Automation, including AI software and robots, is starting to shrink some gig economy work, and the impact may show up as fewer tasks and lower pay.

What's going on

Some gig platforms are seeing signs that companies are buying less freelance work, especially simple online tasks. Fiverr said marketplace traffic and demand slowed in the second quarter, and its CEO linked part of that to updates in large language models (LLMs, AI systems that can write and summarize text like a fast assistant).

Upwork also reported that more clients are using AI, and that this reduced activity for smaller contracts, especially jobs worth $500 or less. Investors have reacted badly, with Fiverr and Upwork shares down 61% and 47% over the past year, according to the article.

Automation pressure is not limited to office style work. In delivery and ride-hailing, physical automation like delivery robots and self-driving cars could replace some roles done by gig workers. In China, the head of a major ecommerce group warned that its 700,000 delivery workers would be replaced by robots “sooner or later.”

The concern is that gig work acts like a shock absorber (like a car part that smooths bumps) for people who cannot find stable jobs. A World Bank report estimated 154 million to 435 million online gig workers globally in 2023. In China, estimates suggest food delivery and ride-share driving grew by 10 million workers in two years, reaching 53 million in 2025.

What to watch

Unlike traditional layoffs, gig work can dry up quietly because workers are not employees. Watch for changes like lower pay per trip in cities with robotaxis, fewer postings on freelance sites, and more fees pushed onto workers, such as Upwork’s paid “Connects” system for applying to jobs. Policymakers may also struggle to respond quickly because the warning signs can be hard to track in official job data.

Source: Financial Times