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The Brief: Stronger case for sustainable investing, waste management in Singapore, backstopping gig workers, collective bonds, Japan’s Hiro exits

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Greetings, Agents of Impacts!

Featured: ImpactAlpha Original

Generation Q&A: How the pandemic strengthens the case for sustainable investing. Health and well-being. Remote work and collaboration. Resilient food systems. Long-term sustainable investment theses once relegated to the fringes of the capital markets are suddenly fundamental to the global economy. “People being forced to stay in place is revealing a lot of the futility of a lot of our activities” says Colin le Duc, a co-founder and partner of Generation Investment Management, the $25 billion asset manager also co-founded by Al Gore and David Blood. “A silver lining may just be the fact that people realize that having a more humble approach to life may actually be beneficial to everyone.”

Generation has been waving the sustainability flag since 2004. The COVID-19 outbreak has revealed the fragility of our system as it is currently organized and is making a strong case for the principles of sustainable investment, said le Duc in a conversation with ImpactAlpha. “Fundamentally, sustainable businesses are better long-term businesses, and as a consequence should be better long-term investments.” Based in San Francisco, le Duc oversees Generation’s multi-billion-dollar private equity portfolio. One sustainability trend accelerated by the pandemic: Remote collaboration. Generation’s portfolio includes electronic-agreements company DocuSign, project management software Asana, and Remitly, which enables digital remittances. The current crisis may be strengthening the case for sustainable investing, but “the ball was already rolling pretty quickly, thanks to cultural changes and citizen activism, in particular around climate,” he says. “This is just an accelerant for a short period of time on a trajectory that is inevitable. Sustainability is imperative.”

Keeping reading, “How the pandemic strengthens the case for sustainable investing,” by Dennis Price on ImpactAlpha.

Dealflow: Follow the Money

Blue Planet raises $25 million for waste management in Singapore. As Asia’s consumer class grows, so does its waste. Blue Planet Environmental Solutions is buying technologies and companies that handle collection, sorting and processing in order to recycle and upcycle discarded material and eliminate landfill waste. Blue Planet acquired Malaysian industrial waste management company Globecycle Holding in August and bought India-based organic waste processing company Xeon Waste Managers in September. It raised $25 million from investment bank Nomura. Prior investors include the Neev Fund, a partnership between the State Bank of India and the U.K.’s DFID.

  • Asia’s circular economy. Corporate-backed Circulate Capital is tackling ocean plastic and other waste issues in Asia (see, “Catalyzing capital to prevent plastic waste). Impact investor Aavishkaar has backed India-based recycling venture Nepra in multiple funding rounds. KKR’s $1.3 billion Global Impact Fund invested in India-based waste management firm Ramky Enviro Engineers as one of its first deals.
  • More.

Omidyar Network India launches $1 million fund to support gig workers through pandemic. The fund will back tech startups with solutions geared towards the bottom 60% of Indian earners whose livelihoods have been affected by the coronavirus.

CollectiveCrunch secures €500,000 to pilot forest management software. The European Space Agency backed the Finnish-German startup, which uses mapping and artificial intelligence to help timber and forestry companies adopt sustainable planning and management.

Signals: Revaluing Resilience

Strengthening collective bonds across the social distance. A crisis can bring out the worst or the best in us. Across the globe, millions of people are choosing “best,” picking up groceries for vulnerable neighbors, buying gift cards to keep local businesses afloat, and sending takeout orders to frontline health workers. This grassroots response is moving quickly to bridge gaps as Congress haggles over a relief package that could take weeks to reach families and businesses. Mutual aid networks that match people in need with neighbors who can help have remade the lowly spreadsheet as impact tech. The neighborhood aid networks have spread around the globe nearly as fast as the coronavirus itself. “Ecosystems with the most supportive, interdependent, inter-species relationships have the highest survival rates,” writes Sandra Kwak of solar finance startup 10Power. The coronavirus crisis “is a test of how we take care of each other and an opportunity to set up and fortify social infrastructure that supports coordinated action from the local to global level.”

  • Peer-to-peer. Cooperatives and other forms of mutual aid can flourish when systems break down. In Minneapolis, Star Finance, a Somali-led cooperative that evolved from immigrant-led savings circles, “could work when the market economy shuts down,” writes SOCAP co-founder Kevin Jones.
  • Open source. Makers, entrepreneurs and tinkerers are sharing open-source plans for everything from masks to ventilators even as government and industry struggle to meet demand for critical supplies needed by hospitals and healthcare workers. Open Source Ventilator, created by a trio of engineers in Ireland, has hundreds of contributors worldwide. Chilean startup Copper3D is refining an open-source design for 3D-printed antiviral masks.
  • Crowdsourced lending. Crowdfunding has helped thousands of small businesses raise capital from their communities since 2016. Now businesses can tap crowdfunded emergency loans. WeFunder’s Coronavirus Crisis Loan program offers loans of up to $1 million; revenue-based repayments are deferred until 2021. “Small businesses need access to cash, and customers and community members desperately want to help,” says WeFunder’s Jonny Price. Estonia-based Wisefund offers crowdfunded loans for European businesses.
  • Local funds. Cities are stepping up to provide relief to small businesses and organizations affected by COVID-19. Birmingham, PhiladelphiaErie and Atlanta have launched funds to provide grants and low- or zero-interest loans.
  • Pay it forward. Online lender Kabbage will help small businesses sell gift cards online. Pre-pay app Credibles lets customers pay in advance for products and services from their favorite businesses.
  • Get mutual.

Agents of Impact: Follow the Talent

Hiro Mizuno exits his role as executive managing director and chief investment officer of the $1.6 trillion Japan Government Pension Investment Fund (his term was set to end this month). The world’s largest largest retirement plan has not yet announced a successor (see, “Hiro’s Journey)… April Underwood, ex- of Slack, joins Obvious Ventures as a venture partner… Cornerstone Capital brings on Glen Macdonald and Shahnawaz Malik as managing directors and senior investment advisors… Big Path Capital is hiring an analyst or associate… Minneapolis-based Finnovation Lab will begin accepting applications for its fellowship program on April 1… Slow Money Northern California is hosting an online discussion about supporting restaurants, farmers and other food providers today at noon PT.

Thank you for reading.

–Mar. 25, 2020

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‘The Gig Economy Is Really Just Pushing People Into Precarious Work’

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Janine Jackson interviewed Open Society’s Bama Athreya about the gig economy and Covid-19 for the April 3, 2020, episode of CounterSpin. This is a lightly edited transcript.

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Janine Jackson: As millions of Americans shelter-in-place as a result of Covid-19, and those who go out avoid public transportation, the reliance on food deliverers and car services is unavoidably clear. For some, that’s cause for celebration—so convenient, so helpful—but it ought to be raising questions.

What does it mean to rely on but not recognize the precarious workforce: workers with low wages, low or no benefits, and no security? How can people be “essential” and “expendable” at the same time?

As with so much of what’s happening right now, the question is, what’s being learned from these workers’ rare moment in the media sun? What, if anything, will change because of it? Because it turns out, having elite media call you a “hero” doesn’t pay the rent.

Our next guest works on this set of issues. Bama Athreya is an economic inequality fellow with the Open Society Foundations. She joins us now by phone. Welcome to CounterSpin, Bama Athreya.

Bama Athreya: Thank you so much for having me on.

Common Dreams: A Pandemic Is No Time for Precarious Work

Common Dreams (3/29/20)

JJ: While some are calling for concern or empathy for frontline workers, others see this moment as evidence of the success of the so-called “gig economy.” You wrote a piece recently—I saw it on Common Dreams—that you say was spurred by “the gleeful celebration of the gig economy” that you were seeing in some quarters. Before we talk about what’s the matter with that, what are these folks actually celebrating? What is the vision that’s being promoted here?

BA: I think I can explain that best by explaining that I have spent most of my career working on labor rights with workers in other countries, and not the United States. And one of the interesting things about this year, and the work I’m doing with Open Society Foundations, is I’m looking at what’s happening in the US economy for the first time. But the fact is, the kind of economy that’s being celebrated by the 1% is, frankly, the same economy that’s existed in a lot of other countries for a long time.

It’s the economy where, if you are wealthy, you can find somebody to do anything you need doing: go pick up your food, or bring it to your door, drive you around, clean your house. Whatever service you need, you can get it, you can get it cheaply, because people are in what we call precarious work. And most people are in precarious work. They don’t have formal, full-time jobs with benefits. They don’t have regular wages.

So this celebration of the “gig economy” here, most of it is really just, what we’re really witnessing, is pushing people into this kind of precarious work in the US.

JJ: You say that some folks are even imagining that folks who are laid off from waged work or salaried work, like in the airline industry, that somehow the gig economy is going to absorb these people.

WSJ: The Gig Economy to the Rescue

Wall Street Journal (3/18/20)

BA: The gig economy here, if you look at the positive spin on it that you hear in many quarters, it’s celebrated as being flexible. The reality is—and I’m certainly not the first person who’s pointed this out—you saw the rise of some of these app-based companies, like Uber and Instacart and the like, in the wake of the 2009 economic crisis and downturn. And at that time, you started to see these kinds of arguments of, “Oh, well, it’s OK because people may be losing regular jobs, but this new gig economy will absorb everybody. You can always take your car, you can take your apartment, you can take whatever assets you have, and get on a platform or an app, and make some money out of it.”

That was the first time I started noticing and saying, well, this is what people do everywhere else in the world, right? So why is this a great thing when you see it start to happen in the US economy?

And now if you look at the kinds of reporting—one of the pieces I called out was the Wall Street Journal. I feel like if you want to know what that 1% wants to have happen, post this pandemic, in the recovery, just read the Wall Street Journal editorial pages; they put it right out there. And one of the things that they’ve been celebrating, to that audience, is the fact that more and more people will be in precarious work in the gig economy, and won’t that be great for investors?

JJ: I just wanted to pick up on that. There was a study that came out in January from a workers’ rights group in Washington State that found that contract delivery drivers for DoorDash, the food delivery service, were making $1.45 an hour, on average, after their expenses were accounted for.

And the company is promoting these jobs, as you’ve just said, as, “Be your own boss, enjoy the flexibility of choosing when, where and how much you earn.” There’s this pay model that makes it look on paper like workers are getting a decent wage, when in reality, some are making right around zero. But investors love it. There’s a huge disconnect there. it seems like.

Bama Athreya

Bama Athreya: “The kind of economy that’s being celebrated by the 1% is, frankly, the same economy that’s existed in a lot of other countries for a long time.”

BA: I don’t know if this is a disconnect. I will say, I’ve seen the work that’s been done in Washington State, the activists there are fantastic. I’ve done more of my interviews with people who are driving for Uber and Lyft and other app-based ride-hailing companies. I think this is the business model, and I don’t think it’s new.

One of the things that we’ve seen, in terms of how the financialization of various sectors has operated over the past couple of decades, is that the markets, such as they are, reward companies that undermine formal wage employment with benefits, right? The more you can put people on short-term work and contract work, and just-in-time, and the more you can fracture regular full-time paid employment, the better your returns, right? And so just seeing that come into the transportation sector, that is the business model, or the delivery sector. That is the business model.

JJ: Yeah, the disconnect is only in the forward face of it. And I guess it’s more just kind of, deception might be a better word.

Well, so much of media is from a consumer point of view. So if you hear that precarious workers are suffering, it’s as though, “Well, that’s the fault of the people who use Lyft, because the bus doesn’t go by their house,” or “that’s the fault of you for ordering a pizza in your home.”

You don’t have to reject the whole idea of a digital economy in order to think that it could be done more fairly and more humanely, right?

BA: I have to say, this week has been quite a week. And I hope you are talking to some of the folks that are organizing the strikes of gig workers in different parts of the country that have been going on all week. It’s been amazing to see. So that I think the thing we all need to be doing, is paying attention to those calls for action, and supporting them wherever you can. Like, don’t order from Instacart this week, don’t order from Amazon this week, respect the fact that those workers are on strike, sign petitions to the companies to give them the protective equipment and the benefits and the sick pay that they need.

And I would  refer people to the Athena for All coalition. I would refer people to Coworker.org, to Gig Workers Rising. There’s a lot of information being put out there right now about what we all can do to support these workers, who are striking for just the right to be safe, and not be at risk of losing their lives to this terrible disease.

Medium: A Feminist Stimulus

Medium (3/30/20)

JJ: Absolutely. Well, let’s talk about a related set of ideas. You had a piece on Medium called “A Feminist Stimulus” that addresses the care work, as it’s called, that is also being foregrounded right now, and the failure to address that work as we talk about economic recovery. What are you getting at in this piece about care work, and how it can be acknowledged?

BA: Sure. Thanks for asking about that. As we are looking at these large packages that are intended to shore up the economy at this time, I do think we need to predict what’s going to happen when the crisis is over, as eventually it will be, and we need to go into a long-term recovery, because our economy is going to take a hit, and global economies are going to take a hit for a long time. And I think we need to get ahead of some of the proposals that are being put out there, and make sure this turns into a people’s recovery, that’s good for people and not just good for markets in the abstract.

So some people have been talking about a universal basic income. That’s fine. I think it’s healthy to have those debates out there. But one of the things that’s frustrated me for a long time of following the proposals around UBI, which is the shorthand for universal basic income, is that they’re largely written by men, and they’re largely gender blind.

And that was very frustrating, because I literally kept seeing things in writings by people who are well-respected leaders in this field, talking about how UBI was good for women, because it meant that women could stay home and do care work and get paid for it. And that just ignores the obvious fallacy, which is that no one’s paying women to do care work, right? I mean, care work is unpaid, virtually; undervalued brutally where it is paid. And that needs to get corrected, and UBI is not going to do that. If we don’t take some measures to stop that from happening, it will end up just reinforcing the notion that women should be doing unpaid care work.

And I’ll give you one example of that. There was actually a referendum in Switzerland a couple of years ago, to provide UBI to every citizen; that went for a vote, it failed. But I read through some of the arguments that the proponents of that referendum had made at the time, and it was really interesting, because the proponents that were out there, trying to sell this UBI proposal to the Swiss population, were precisely making the argument that it would enable women to stay home and take care of kids.

And that belied the reality that the men, or the people, who stayed in wage employment, were still going to be getting that same UBI, because it’s a UBI, it’s universal, right? So everybody gets it, whether you work or not. So the women who are going to stay home, were not going to get paid for care work. They were just going to get the stipend that everybody that was in the working world, the paid-wage labor world, was getting.

And this seems to be the fallacy that comes up over and over and over again, and I just want us to put an end to that, and to say that if we are now recognizing that we will have many, many people in this society, coming out of this coronavirus crisis, that are sick, that are vulnerable, we will have communities ati need, we will have poor children at need. We will need more care workers than ever.

So we had better figure out how to start properly valuing and paying for care work. Because, otherwise, there’s going to be this huge, huge, huge enormous unpaid care burden, and guess who it’s going to fall on?

What we need to do, again, is quantify the value of the unpaid care work that’s going on in our economy now, and then predict how much more is going to be needed during the recovery period. And let’s figure out how to get the money into the economy to pay the people to do the care work that we’re really going to need done.

JJ: Media promote a fiction, usually tacitly, that economic fortunes are natural; some work is just worth more than other work. Folks say, “Gosh, teachers work so hard, it really stinks that they don’t get paid a lot.” But it’s as though nature wants it that way, or something. Teachers just take a vow of poverty, God bless ’em.

There’s a notion of the naturalness of obtaining economic conditions that has to be resisted, but it’s really not that easy to do that.

BA: I think even when you see good data from progressive economists, you also see a lot of sort of bad faith arguments out there about what will stimulate the economy. And I think it helps to just pull ourselves back to a central question. And that is, whose economy? It is not an abstract thing, right?

And so when you see the kinds of talking heads that you very often see called up for news programs, etc., and they are wealthy individuals. They are corporate CEOs. They are people who are doing very well. They are talking about the economy that benefits them.

We need to start thinking about, and talking about, what an economy looks like that benefits your average childcare worker. And if that is the starting point and the premise, and you’re interviewing those people, and asking them what they think a fair economy looks like, you do have to have—I think you were pointing this out—a change in the very way in which we conceptualize the economy.

JJ: Let me just ask you for any final thoughts you have. Obviously, this is going to be the fodder in the news that we’re going to be seeing for weeks and months now. Are there questions you would be encouraging reporters to pursue, or, on the other hand, things you’d like them to not do, things to avoid doing?

BA: I would just encourage, interview the people who are on the frontlines of this as much as possible. I super appreciate that you’ve reached out to me, I hope you’re also interviewing people who are actually having to deliver groceries, or deliver takeout food, and getting their perspectives on what it’s like to be looking at the realities of the healthcare that they’re offered, the realities of the wages and the types of safety nets around them, and I think that’s where journalists really can play an amazing role.

And I wish, I actually wish we had more local journalists—one of our challenges now is that you need people who are also paid to go and interview people in the local communities about what’s happening to them.

JJ: We’ve been speaking with Bama Athreya. You can find her piece, “A Feminist Stimulus,” on Medium.com, and “A Pandemic Is No Time for Precarious Work” on Inequality.org, as well as Common Dreams. Thank you very much, Bama Athreya, for joining us this week on CounterSpin.

BA: It’s been great. Thank you so much, Janine.

 



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US gig workers confused by coronavirus financial relief aid | USA News

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During a normal spring break, aesthetician Rosalia Fiske fills up her calendar with client appointments for facials and waxing. But the ongoing COVID-19 pandemic has already cost her between $4,000 and $5,000, she says, because unlike other gig workers who can take their services virtual, Fiske needs to get her hands on her clients’ faces, and New Jersey’s mandatory stay-at-home order makes that simply impossible right now.

So Fiske is dipping into savings to cover the $4,000 per semester in tuition she pays as a full-time nursing student, plus her share of the $4,000 in rent for the apartment she shares with roommates in Hoboken, New Jersey. And then there’s food, utilities and more.

Fiske, who is pursuing her degree at Hudson County Community College, said she does not think she qualifies for unemployment benefits, and she is not sure she will be eligible for a $1,200 stimulus cheque from the government’s coronavirus relief plan, either.

“I feel like there’s so much unknown when it comes to that check – amongst other relief – to be honest,” Fiske told Al Jazeera. “I have zero income coming in right now, so it’s the responsibility of paying your bills and being frugal.”

Amid record-high unemployment numbers, many gig workers wonder which benefits apply to them. Some 36 percent of Americans participate in the gig economy in some way, according to a 2018 Gallup poll, and the term encompasses ride-share drivers, nannies and carers for the elderly, freelancers, house cleaners, fitness instructors and delivery people, among others.

While those gigs offer flexibility, they have historically come with no safety net, and gig workers have not normally been eligible for unemployment benefits, employer-paid health insurance or paid sick leave. The ongoing coronavirus crisis has also brought many of those long-term struggles to the fore.

Fiske is one of the gig workers Al Jazeera interviewed last month as the coronavirus crisis began in the US. We’ve reached back out to the people we talked to for that story to see how they’re doing now. All three live in the New York City area, which has become the epicentre of the US outbreak.

‘It’s a struggle’

Aaron Robinson is now collecting unemployment after being laid off from the BMW warehouse where he worked full-time on March 22. Robinson’s town of Teaneck, New Jersey, has been hit hard by coronavirus; Bergen County has the highest numbers in the state with nearly 8,000 positive cases and more than 300 deaths.

“Everything is shut down,” Robinson told Al Jazeera. “I can’t work, so I’ve got to collect unemployment like everybody else. It’s a struggle.”

Although he also used to supplement his income by driving 20 to 25 hours a week for Uber, he stopped about a week ago and does not know when he will start again. “I need to find out more specifics of how this virus is transferred,” Robinson said. “I don’t do Uber because of my family. I would still do it, but I don’t want to catch it and spread it to them.”

Robinson said the unemployment benefits he receives are about a third of his BMW wages and are not enough to live on. Like Fiske, he is not sure if he qualifies for the $1,200 stimulus cheque.

Everything is shut down. I can’t work, so I’ve got to collect unemployment like everybody else. It’s a struggle.

Aaron Robinson laid-off BMW warehouse worker and part-time Uber driver

But Robinson said he did call his landlord and electric and water companies to ask for more time to pay his bills, which they granted. “Everybody postponed everything,” Robinson said. “You don’t want to live like this, but you take all the right precautions and you should be able to survive until this blows over.”

His children are home from school and his wife, who is a teacher, is trying to help her students with distance learning from home. Right now, they are focused on staying inside and staying safe. But the uncertainty about how long COVID-19 could last concerns him. “I’m worried because nobody can live on unemployment, so depending on how long it lasts, I don’t know,” he said.

‘No safety provisions’

The $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act, signed by President Trump on March 27, makes gig workers eligible for 39 weeks of unemployment benefits, an additional $600 a week for up to four months, and the option to apply for loans for relief, says Maria Figueroa, the director of labour and policy research at Cornell University’s Worker Institute. But there are still gaps.

“This is a step forward for protecting the approximately 24 million Americans who are gig workers, but it is not enough as many of them are front-line workers – food delivery, ride-hailing, even healthcare – and they need to continue working during the crisis,” Figueroa told Al Jazeera.

Unemployment insurance benefits in the US also normally require that a recipient prove they have been actively looking for work, she explained, “and it’s not clear how some workers will qualify for unemployment insurance if they can’t seek work during the crisis. It is not clear if this requirement has been dropped to qualify for unemployment insurance.”

Some of the gig workers who are still on the job – including domestic workers, warehouse workers and delivery people – have also sounded the alarm about the lack of health protections they have amid the pandemic, and workers from major companies including Amazon and Instacart went on strike last week.

Amazon.com is now under investigation by New York City’s human rights commissioner after it fired one of the workers who participated in a walkout at its Staten Island warehouse.

“There are no [safety] provisions under the Cares Act, and many workers – gig and regular – are retaliated against by their employers for refusing to work under unsafe conditions,” Figueroa said.

New York City Skyline

Michelle Goitia, a prenatal yoga teacher, birth doula and childbirth educator, has taken her business online, but it’s come with a major pay cut [Courtesy: Michelle Goitia]

‘The buzzword is pivot’

Michelle Goitia, a prenatal yoga teacher, birth doula and childbirth educator, has taken her business online, but it has come with a major pay cut. She’s teaching about half of the courses she once was, and people are paying less for her virtual classes. The nannies that brought babies to her class are not working, and stressed-out, working-from-home parents do not always have time for postnatal yoga.

Still, she is grateful that taking things virtual is even an option. “The buzzword these days seems to be ‘pivot’. What can you do to pivot and adapt to these current times?” Goitia told Al Jazeera. “One of my good friends is a massage therapist, and she has no work, so she’s working on her pivot, and she’s changing her business. But it’s tough. It takes time to change.”

Goitia said she would qualify for the $1,200 cheque from the government, plus $500 for her son. But that one-time payment doesn’t go very far for many workers, says Erin Hatton, an associate professor at the State University of New York at Buffalo.

“We need to extend the benefits by distributing ongoing monthly stimulus payments until this health and economic crisis subsides,” Hatton told Al Jazeera. “More people need to be eligible for such payments, including people whose 2019 income exceeded the limits but have now lost their jobs due to the crisis, as well as young workers who are working to support their families but are categorized as dependents.”

Even amid this time of incredible economic uncertainty, the gig workers we spoke to are finding ways to be grateful.

Goitia has launched a special support group for women who are pregnant and due to deliver during the COVID-19 pandemic, and has had more than 40 couples attend so far.

She prides herself on keeping in touch with the women she meets during prenatal and postpartum periods, carrying around a worn little notebook with their names, babies’ names and information. She’s working to keep those same connections over Zoom. Those women, in turn, have had her back.

“When I first sent out an email saying I had to stop teaching altogether, a couple of people bought some class cards from me and said, ‘We know you’ll be back and we’ll use them then,'” Goitia said.

Fiske is planning to give free facials to nurses at the local hospital after the COVID-19 crisis is over, and it is made her realize “how fortunate I am, and that health is really wealth,” she explained. “This is all temporary and an easy sacrifice.”

Robinson agrees. “I think this is a way for everybody to realize the special things they had with regular life,” he said.



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Global Payments in the Gig Economy: Capitalizing on a Booming Industry

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The gig economy has grown exponentially
over the past decade. With flexible work hours and independence, it is no
question why freelance work is becoming more attractive to many. According to a
2017 BLS survey, 36 percent of the workforce relied on gig work for some
portion of their income in the United States. This number is expected to grow
to 43 percent by the end of 2020.

Technology
has made it easier for workers to find gigs and employers to find workers.
Technology also removed geographical barriers fueling the need for global
payment solutions. Globally, the gig economy now “represents $2.7
trillion
in annual
disbursements”.

However, with rapid growth
comes challenges for businesses looking to pay gig workers, especially when
their workers are across borders. With the gig economy expected to grow by 17.4% through 2023, businesses need to adapt to meet the
payment demands of gig workers to remain competitive. So how can businesses
adjust their operations and strategies in order to meet these changing customer
expectations?

Economic and Regulatory Considerations

Thanks to the emergence of online digital platforms, it has
become easier than ever to connect workers to employers. With shifting demographics
and ages of workers, industries are being forced to adapt to the changing
workforce and even more so, provide cross border payments to international
freelance workers. Although the North American payments industry has been
traditionally slow to react to market shifts, growing demand is putting
pressure on government and businesses alike to meet customer demands. Now,
questions are being raised surrounding worker rights, benefits, payments and
labor issues.

Some government bodies are taking note on how to best
support, identify and manage gig workers, many of whom are utilizing freelance
work as full-time income. Recently, states such as California, implement law AB
5 to protect workers and deliver them proper worker incentives. It is no
question that this growing section of workers are gaining the attention of law
makers to ensure they are fairly paid.

Aside from the impact of new industry regulations, economic
instability and market uncertainty is weighing on businesses who rely on
freelancers globally. 85 percent of gig employees, whose
primary source of income is gig work, worry about the impact of an economic
recession. Thus, the need for gig companies to look at a seamless payment
experience for gig workers.

Payment Methods

Gig workers want to be paid immediately
after they complete their gigs. More and more we are seeing freelance workers
demanding immediate access to their financial information in addition to
on-time payments. So how can businesses meet the demands of their global
independent workforce? Partnering with payment providers who understand the
needs of gig companies and gig workers and can offer customized methods of
payment based on the regional preference of the gig worker is a must.

For example, unbanked gig
workers prefer e-wallets and card payouts. Amazon sellers prefer account
numbers and IBANs in their names to receive payouts in various currencies.
Vacation property owners prefer payment by wires. Some temporary works prefer
cash in some parts of the world. Others prefer to receive payment by bitcoin or
Ethereum. Having key payment partners who can offer businesses the ability to
pay their independent workforce in their preferred method and on-demand will ensure
businesses stay ahead of the curve in a very competitive gig economy.

Finding the right payments
partner can feel like a monumental task where there’s always a catch. Choosing
the right partners will also help ensure your gig workers remain loyal to your
platform and are ultimately satisfied with your service offerings.

ROI

Global payment processing can
reduce profit margins if businesses don’t do their due diligence when selecting
a payments partner that best suits their needs. Large banks such as Chase and JP Morgan are built on
top of legacy platforms, which themselves were built on legacy platform and can
hold payment restrictions. The systems can’t talk to each other. Banks don’t
have the technology to service. Therefore, it’s crucial for large FIs to
partner, fund, and acquire Fintech companies built on technology from the
ground up to service customers.

Companies such as Upwork, Lyft
or AirBNB that primarily rely on gig workers to keep their businesses growing
might be best served by working with a payments partners that make sense from a
business operational standpoint. Top things to consider in finding the right
partner include the types of services offered such as their expertise in
addressing challenges of meeting local payment dynamics, payout options and
currencies, global access, compliance, licensing, convenience, and most
importantly customer service.

Each organization has different needs and desires. In the
end it’s simple, gig workers want control over how, when and where they get
paid. Gig companies need to realize that the right payments provider will need
to understand these key considerations and pain points for workers in order to
meet the demands of this growing industry. More and more businesses need to
ensure their customers are satisfied and they are staying relevant among
growing industry competition by providing gig workers what they need – efficient
and accurate payments.

About
Bob Dowd

Bob
Dowd is the CEO of moneycorp North America and is a
35+
year veteran of the foreign exchange and payments industry as well as a
certified treasury professional (CTP). His extensive industry experience
includes 25 years with Travelex Global Business Payments, where he was a member
of the North American Executive Board, 6 years with Cambridge Global Payments
where he was Managing Director and 3 years with Currency Exchange International
and its wholly-owned Canadian subsidiary Exchange Bank of Canada as Senior Vice
President, North America.

Bob joined moneycorp in April 2019 where he
oversees the overall business in the United States. His focus is on the
development of strategic plans, business development, marketing, platform and
application innovation, providing clients and its partners integrated, foreign
exchange services for both the US while exploring opportunities for expansion
in the Canadian market.

Summary

Global Payments in the Gig Economy: Capitalizing on a Booming Industry

Article Name

Global Payments in the Gig Economy: Capitalizing on a Booming Industry

Description

According to a 2017 BLS survey, 36 percent of the workforce relied on gig work for some portion of their income in the United States. This number is expected to grow to 43 percent by the end of 2020.

Author

Bob Dowd

Publisher Name

PaymentsJournal

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