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Gig economy workers ‘hit harder’ financially

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Half of Brits (49%) working temporarily or doing contract paid work for a mobile app or website said they have taken ‘desperate measures’ to survive financially, research by the Income Protection Task Force (IPTF) has revealed.

This includes measures such as using food banks, shoplifting, gambling, drinking or taking a payday loan – less than 10% of those not working in the gig economy admitted to living like this.

The figures also show that a quarter (26%) are living paycheck to paycheck, however this rises to 31% for those working in the gig economy.

Fuelled by the growing online marketplace, the gig economy is predicted to be worth around £43 billion globally in 2020 (according to PwC) and there are an estimated 10 million gig economy workers in the UK.

The survey of 2007 UK adults showed that more than a fifth of gig economy workers (21%) had taken out a payday loan, 14% have gambled, while another 14% had used a food bank. Alcohol has served as a coping mechanism for 13% and 8% admitted to shoplifting. Over a quarter (26%) said they have had to borrow money from family or friends between pay days.

Sick leave?

The IPTF survey found that 44% have been unable to work for longer than three months, compared to 25% who do not work in the gig economy, while 38% said they would be unable to work for no longer than three months without work and 21% could not cope for more than six months.

Of those off work, a third (33%) said it was due to accident or injury, compared to 13% of non-gig economy workers. Physical health (38%) was the biggest reason for long-term sick leave, while one in five (19%) were off due to mental health issues. Meanwhile, 14% could not work due to disability.

Evan Odell, researcher at Disability Rights UK, said: “Rather than providing workers with flexible working hours they can control, the rise of the gig economy has merely stripped away predictability of hours and earnings, and with that financial security and peace-of-mind.”

“This appears to have a particular impact on disabled workers attracted to gig economy jobs because of the supposed flexibility, only to find the stresses and lack of control can make their impairments more severe. The promised flexibility of the gig economy has benefited employers, but not employees. Disabled gig economy workers are also likely struggle to get reasonable adjustments put in place, access sick pay, become part of disabled staff networks or get employment rights support from trade unions.”

Returning to work

Four fifths (79%) of gig economy workers unable to work said they have suffer mental health issues as a result.

Thirty percent said they didn’t feel like the people assessing their ability to work took enough time to understand their situation, and 27% said they felt they had to go above and beyond to prove they couldn’t work.

To that end, 95% of gig economy workers who have been long-term sick felt pressured to return to work before they were ready – with 65% actually going back into work before they should have. This is many more than the 20% of non-gig workers who have been long-term sick and said they returned too early.

Roy McLoughlin, co-chair of the IPTF, added: “Because of the more temporary employment status of gig economy workers, their finances are likely to be hit much harder when they face ill health, and it can also have a huge impact on partners and other family members financially and emotionally. But with a little planning people can help safeguard themselves and their family from financial catastrophe.

“There are many ways that people whose work pattern doesn’t fit the standard mould can insure themselves against the financial impact of long-term ill health, that would continue to pay them an income when they can’t work – and it often costs a lot less than people think. We would urge people to seek advice from an independent life and health insurance specialist to find out the best options for protecting their income.”

Birmingham was found to have the highest proportion of gig economy workers (36%), followed by London (31%) and Glasgow (30%). Bristol (5%), Brighton (6%) and Nottingham (6%) were the cities with the fewest.

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Gig Worker Platform Payfare Launches Visa Card

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Payfare, a FinTech that provides payment and banking services for gig workers, has launched a collaboration with Visa to add Visa SavingsEdge to its platform.

The Toronto company announced the project on Wednesday (Sept. 22), saying that it would begin with the nationwide DoorDash DasherDirect card program.

Read more: DoorDash Partners With Payfare to Launch Banking Solution for Drivers

With Visa SavingsEdge, gig workers who are also Visa business cardholders can save on purchases with participating merchants, with discounts on things like fuel, auto parts, travel and dining from local, regional and national vendors.

“Our goal is for every worker in the global gig economy to become an empowered entrepreneur with financial security,” said Marco Margiotta, CEO and founding partner of Payfare. “With the addition of Visa SavingsEdge, we are arming gig workers with another financial tool to help them save and keep more of their hard-earned money, while supporting the overall financial health of the growing gig workforce.”

“Visa SavingsEdge will give gig workers the ability to take advantage of savings that are typically reserved for large businesses,” said Dahvie James, lead product manager for Visa SavingsEdge. “We know a sizable portion of the workforce already participates in the gig economy, and that the percentage is only growing. As we look toward enabling the financial health of these workers, we are thrilled to partner with Payfare to make Visa SavingsEdge available to them.”

Read more: Gig Workforce Payments Platform Payfare Opens Trading at $6

Payfare went public earlier this year with a $65.4 million initial public offering.

Payfare and DoorDash launched the DasherDirect program in December 2020. The card is issued by Stride Bank and is powered by Payfare. The platform offers drivers a mobile banking app and a business Prepaid Visa Card, as well as new rewards. DoorDash workers can also choose to have earnings automatically added to the card every day at zero cost. Users can also use the platform to check their balance, pay bills, transfer money and set savings goals.

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NEW PYMNTS DATA: TODAY’S SELF-SERVICE SHOPPING JOURNEY – SEPTEMBER 2021

About: Eighty percent of consumers are interested in using nontraditional checkout options like self-service, yet only 35 percent were able to use them for their most recent purchases. Today’s Self-Service Shopping Journey, a PYMNTS and Toshiba collaboration, analyzes over 2,500 responses to learn how merchants can address availability and perception issues to meet demand for self-service kiosks.

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Lyft built a brand on being the nice gig work app clad in pink. Its drivers paint a different picture.

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SAN FRANCISCO — Ray Givaudan has driven for Lyft, Uber and even briefly Instacart to supplement his retirement over the last few years.

At first, the 55-year-old was loyal to Lyft. But then Uber introduced a long pickup fee to pay more if he goes out of his way to pick up a passenger. In addition, he could see what a customer paid for a trip, helping him understand whether he was getting a fair share. Instacart provided more opportunities for work during the pandemic.

“The first couple of years with Lyft, you seemed to be a decent company and transparent,” the Roanoke-based driver recently wrote in a letter to Lyft co-founders Logan Green and John Zimmer. “The last couple of years, not so much.” He cited the disappearance of surge-priced pay, lagging driver rewards, and the removal of helpful features such as a live phone help line for drivers.

Lyft has spent years trying to win over drivers and passengers with fun branding, an emphasis on social justice and charitable causes, and in-app tipping. The perks gave it a reputational edge in a marketplace where rival Uber was criticized for its treatment of drivers and corporate scandals, and where food and grocery delivery was a budding and uncertain sector of the gig economy, often with lower pay.

But the pandemic and related labor shortage have dramatically shifted that landscape over the last couple years. At Lyft, which remained focused on ridesharing, ridership was down by as much as 75% last year.

Drivers aren’t bound to one company, and can easily switch between apps. In the interim, many drivers chose to work for rival food delivery services, which experienced a boom in deliveries and offered additional transparency into earnings, along with such advantages as negating the risk of interacting with passengers. Companies such as DoorDash and Shipt added driver incentives, such as cash bonuses last winter in an effort to meet surging demand.

And while Uber experienced similar ridership declines to Lyft at the height of the pandemic, it doubled down with its Eats food delivery business.

Now demand for rides is returning, fueling a driver shortage. And as other companies have offered steadier work and more transparency, some drivers say they are frustrated with Lyft.

Lyft has fallen behind the gig work market in several areas, more than a half-dozen drivers, analysts and researchers say. Lyft’s take-home pay also tends to be lower than that of its biggest rival, Uber, owing to a combination of stiff competition and algorithms less sensitive to surges in demand.

“I think Lyft is floundering,” Givaudan said.

Lyft spokeswoman Julie Wood said the company places a priority on the driver experience. She said quoted wait times for riders on Lyft were lower than on Uber in 24 of the 30 largest markets over a recent period, according to company data points and visualizations that were shared with the Washington Post. That meant there was little indication drivers were choosing Uber over Lyft. And drivers in some cities were earning more than $35 an hour, well beyond what they would typically collect, the company said recently.

But the lack of transparency can lead some drivers to feel they’re not receiving a fair share. One driver shared screenshots with the Post showing that a passenger paid more than $43 for a trip from Northwest Washington to Reagan National Airport, but he took home just more than $16. The driver, a music instructor who spoke on the condition of anonymity because he did not want his students to know he was driving for Lyft, had to ask the passenger to see how much the person paid for the ride.

Wood said many of the features mentioned in this article are available on the Lyft app, either through pilot programs or unlockable driver rewards. Lyft has a long pickup bonus in six markets, for example. And drivers can earn the ability to see passenger destinations through their driver rewards, she said. Lyft is also experimenting with upfront pay in two markets, allowing drivers to see the earnings and trip details on the screen before accepting a ride.

Uber spokesman Matthew Wing acknowledged that the company has had to make improvements in the face of outside pressure and calls for change.

“Being the market leader comes with more scrutiny, as it should,” Wing said.

Instacart spokeswoman Natalia Montalvo said the firm met a March 2020 goal to add 300,000 shoppers, and there are stable numbers of shoppers across North America.

DoorDash declined to comment. Amazon and Shipt did not immediately return requests for comment. (Amazon founder Jeff Bezos owns the Washington Post.)

Drivers say they’ve watched a shift at Lyft from its beginnings, when it was the first ridesharing app to implement a default tipping feature and has allowed customers to tip since its debut nearly a decade ago. Lyft also was first to let drivers pocket their earnings right away through a feature called “Express Pay,” with instant deposits for a transfer fee, it said.

In California, estimated to be the largest U.S. market for gig work with more than one million workers, a 2019 law that mandated companies treat gig workers as employees helped drive some changes in driver treatment. Some companies — particularly Uber — added a number of perks for drivers, including more control over fares and transparency into earnings even before a driver took on a ride. The initiatives tried to prove drivers were independent.

Lyft didn’t adopt new features, as it pursued a different legal strategy. Analysts said that company likely benefited from the fact that Uber drivers were turning down trips, and the changes Uber made to its app were costly from a research, development and operational standpoint.

Still, some of Uber’s changes were short-lived. It uncoupled driver earnings from passenger fares earlier this year as it no longer needed to prove drivers were independent operators in a supply-and-demand-based marketplace, sparking outrage among some drivers.

That led to cases where passengers found themselves paying astronomical fares while drivers collected meager bonuses. Meanwhile, some riders trying to take a Lyft were shown reasonable prices, but there weren’t drivers to accept the fares.

Ridesharing apps are highly dependent on their matching algorithms to pair customers with nearby drivers for a reasonable fare, at a rate that ensures gig workers are willing to make the trip.

Lyft’s algorithm is less sensitive, analysts said, meaning prices don’t spike as easily and driver bonuses can be lower and less frequent. Wood pointed to the wait time data as evidence that there is an ample supply of drivers, however.

But the differing algorithms can lead to headaches. For example, when customers pouring from an event are all demanding rides at once, they might find the price of an Uber has spiked while Lyft is comparably cheaper. In that case, Uber’s algorithm has detected a surge in demand and raises the price accordingly so customers can secure a ride with the limited supply of drivers.

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‘Gig workers’ approach Supreme Court, seek social security benefits from Zomato, Swiggy, Ola, Uber

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A petition has been filed by “gig workers” before the Supreme Court praying for social security benefits from employers including food delivery apps Zomato and Swiggy and taxi aggregator apps, Ola and Uber.

Gig workers are independent contractors or freelancers who undertake short-term work for multiple clients. The work may be project-based, hourly or part-time, and can either be an ongoing contract or a temporary position. The number of “gig economy” contract workers has grown in recent years; and during the COVID-19 pandemic, even more workers have joined the gig economy, as those who lost their full-time jobs began freelancing to make ends meet.)

The petitioners have reasoned that they are unorganised workers under the Unorganised Workers’ Social Welfare Security Act, 2008, and are therefore entitled to social security. It has been contended that the State’s failure to register them under the Act is violative of their fundamental rights, especially since the legislation has been enacted pursuant to Directive Principles of State Policy with a view to ensure basic human dignity of the workers.

“Denial of social security to the said “gig workers” and the “platform workers” has resulted in their exploitation through forced labour within the meaning of Article 23 of the Constitution. The right to livelihood includes the right to work on decent and fair conditions of work,” the plea said.

The respondent companies have been claiming that there exists no contract of employment between them and the petitioners, and that their relationship with the petitioners are in nature of partnership.

The petitioners have cited judgment of the UK Supreme Court which had held that Uber drivers are “workers” entitled to minimum wage, paid annual leave and other workers’ rights. – BENCH AND LAW

(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper’s PDF on WhatsApp and other social media platforms.)

Published on: Tuesday, September 21, 2021, 11:13 PM IST

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