The emergence of the gig economy has catalyzed significant transformations in global labor markets, challenging traditional employment models and redefining the nature of work. Characterized by technology-enabled platforms, short-term contracts, and flexible work arrangements, the gig economy has sparked widespread debate regarding its economic, social, and regulatory implications. This review paper synthesizes a broad range of academic and policy literature to explore the multifaceted dimensions of the gig economy and its dual role as both a driver of innovation and a force of disruption. The paper examines the underlying factors contributing to the rise of gig work, including digital innovation, shifting consumer behaviors, and the increasing demand for flexibility among workers. It also highlights the gig economy’s contributions to fostering entrepreneurship, enhancing income opportunities, and promoting inclusion—particularly for marginalized groups—by democratizing access to the labor market. At the same time, the review critically evaluates concerns related to precarious working conditions, lack of social security, income instability, and the erosion of traditional labor protections. It further discusses the broader economic and policy implications, analyzing how governments and regulatory bodies are grappling with the challenge of balancing innovation with the protection of workers' rights. By synthesizing diverse scholarly perspectives, this paper provides a comprehensive overview of the gig economy’s impact on employment evolution. It underscores the need for adaptive, nuanced policy frameworks that support the growth of this emerging labor model while ensuring equity and sustainability in the world of work.