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Gig workers struggle as more and more join platforms amid Covid-19 economic crisis (CNBC)

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July 27, 2020

Gig economy, human cloud contractors are making less money as the Covid-19 economic downturn drives more people toward online platforms, CNBC reports. Chad Polenz, a gig economy worker from Orlando, Florida, told CNBC “how do you make a living when you’re competing with so many people?”

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Big jump in unemployment benefit claims from gig workers

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Buried in the details of the Labor Department’s weekly unemployment claims Thursday morning was a significant jump in the number of gig workers filing for jobless benefits, up more than 48% to nearly 424,000.

Gig workers can apply for temporary Pandemic Unemployment Assistance which is specifically for “self-employed, independent contractors, and others who are unemployed as a direct result of COVID-19, who are not eligible for regular unemployment benefits or extended UI benefits,” according to the U.S. Department of Labor.

One person grateful for the extra cash is Joy Chowdhury. He’s an Uber driver in New York City, and when the pandemic shut down most businesses in the city, he was in a bind.

“I was struggling to pay my rent,” he said.

That changed when Congress passed the first COVID-19 relief package.

“It did help me” once he could get unemployment benefits, Chowdhury said. “I’m going to appreciate that opportunity as a gig worker.”

This latest spike in pandemic unemployment claims is likely linked to the brief lapse in the program before the last aid package was approved, new shutdowns, and to the after-holiday slowdown, according to Dmitri Koustas an economist at the University of Chicago. 

Since about a third of the labor force does some work in the gig economy, Koustas said.

“If more people are relying on gig work, a lot of the risk is on the workers themselves.”

That’s because “we’ve attached a whole bunch of rights and privileges and opportunities to employment,” according to Erin Hatton, a sociologist at the University at Buffalo.

Privileges like retirement plans, parental leave, health insurance and unemployment insurance are tied to traditional full-time jobs.

And Heidi Shierholz, a labor economist at the Economic Policy Institute, said that was problematic before, but with the pandemic, “it’s really shown us that there are gaps in our regular unemployment system that you can drive a truck through. We do have the ability to close them, like the existence of this program shows us that we can do it.”

Josh Godfrey in Houston knows this well. His works for DoorDash, and his earnings dropped from $600 to $150 a week during the pandemic.

Without the temporary gig unemployment benefits, Godfrey doesn’t know what he would have done. And now he’s making plans.

“The pandemic kind of pushed me to kind of reevaluate what I’m doing in life and make steps towards getting a more stable job that I won’t lose due to market volatility.”

So he’s going back to school.

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Q&A: Expanding talent management strategies to embrace the gig workforce

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Digital information concept AI-powered, person-centric platforms can help connect the dots between people, work and life to drive smarter decisions, navigate choice and create impactful experiences. (Image: Shutterstock)

The gig economy has been a steadily growing force in talent management for a number of years. But the disruption to the economy and the workforce caused by the COVID-19 pandemic has had many employers rethinking their business and talent management strategies in the past few months, and the switch to a work-from-home model also opened the eyes of many businesses to the possibilities beyond the traditional work arrangement.

Related: Uber CEO proposes new category of employment for gig workers

 

Colin Brennan Colin Brennan, president, Global Solutions & Services, Alight Solutions

Colin Brennan, president of global solutions & services at Alight Solutions, recently shared some thoughts on the increasing role of the gig economy in traditional business models, and what employers can do to attract and leverage talent.

Why is gig work a critical capability for employers to accommodate, and how has the pandemic played a role in shaping this?

The pandemic displaced many highly skilled workers who turned to “gigs” while waiting for the economy and job market to improve. When the pandemic subsides, we’ll see a dramatic redistribution of talent across industries, and these workers will join employers that will likely still be establishing the right resources and technology infrastructure to support a workforce that’s returning to the workplace, remaining remote, or a combination of both.

But gig work is hardly a new phenomenon, as the economy has been reorganizing itself around freelancers and independent contractors for many years. What the pandemic did was force employers to reimagine their businesses and workplaces so they’re more adaptable and resilient in the face of disruption. In situations like these, gig workers give employers the flexibility to scale their workforce up and down based on the demand for goods and services and the skillsets that are needed to deliver them. Jobs that can be performed on an on-demand basis will be a huge part of employers’ talent management strategies moving forward.

How can employers leverage cloud-based HR systems to unify organizations’ people-related data and processes, especially when it comes to effectively managing gig workers?

Employers should be focused on being proactive, fast and lean, especially when it comes to operations. In order to meet the needs of a contemporary, agile workforce, they should evolve their approaches to pay and talent while implementing the right systems. Traditionally, HR systems are not made to effectively manage gig workers — especially when it comes to rapid onboarding and offboarding. As gig workers play an increasingly important role in their operations, employers need nimble processes that run in a paperless fashion during the recruitment and application stages; glean workers’ past employment experiences; leverage mobile as a channel to bring people into the organization and keep them engaged; and help make data-driven decisions around skillsets.

As a result of the pandemic, HR leaders hesitant towards automation may finally make the switch due to the positive correlation with cost and time savings. Cloud-based HR systems can unify employers’ people-related data and processes. By providing a broader view of the workforce, employers can strategically allocate resources, hire the right people at the right times, start programs that nurture talent and, ultimately, elevate the employee experience.

What’s the advantage of offering gig workers diverse options for pay, and what kind of options exist?

In this digital age where information, goods and services are accessible from mobile devices and transactions are seamless, workers expect the same level of convenience when it comes to compensation. That’s why it’s critical for employers using the gig model to ensure quick and stress-free methods of payment for those workers, on their channel of choice.

With more people digitizing their wallets using mobile pay and banking apps, employers should find payroll solutions that can fit seamlessly into that experience. Fortunately, many employers are adopting new processes and technologies — and they’re already “paying” off. They can calculate compensation as time-related data is collected, allowing for more frequent payments that go directly to workers’ digital wallets, much like Apple Pay or Alipay. Alight’s DailyPay on-demand payroll service, for example, allows workers to transfer accrued but unpaid wages to any bank account or pay card in advance of their next paycheck.

Specific to gig workers, they generally expect to be paid for the work they do, as it’s completed, rather than on a typical pay period cycle. This growing trend only adds to the need for employers to have faster and more efficient methods of conducting payroll. That’s where AI and machine learning come in — those technologies can take all the important inputs (e.g., salary, commissions, taxes, travel, expenses, bonuses, etc.) as well as years of historical payroll data, to more accurately assess whether a worker’s paycheck is correct or not.

In addition to pay, are there other benefits employers should consider offering when it comes to attracting the gig workforce and creating a great gig experience?

Employers that can provide engaging experiences that will cultivate gig workers and their skills will be in an advantageous position. While the actions taken and administered will be different, providing additional HR administrative services such as benefits will allow employers to attract and retain the best possible extended workforce.

In today’s experience economy, workers expect to have valuable data and information at their fingertips that can be applied seamlessly across their digitally-driven lives. We believe improving health outcomes and maximizing benefits dollars starts with empowering people to take charge of their total wellbeing with on-demand support from their employers.

AI-powered, person-centric platforms can help connect the dots between people, work and life to drive smarter decisions, navigate choice and create impactful experiences. Consider the possibilities for the workforce if employers use AI to optimize workforce management, pay people faster, provide them with personalized and customized retirement and financial solutions, or even anticipate their healthcare needs, like using biometric data to nudge them to seek care before health issues arise.

 

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How does DoorDash work? Everything to know about the food delivery app powered by gig workers

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  • DoorDash is an on-demand food delivery service that lets you order food and drinks from restaurants in your area.
  • When you order from DoorDash, your food is delivered by a freelance worker who doesn’t belong to any single restaurant.
  • Since restaurants don’t have to hire delivery drivers, DoorDash makes it easier for them to expand their delivery business.

DoorDash is an on-demand food delivery service that partners with local restaurants to deliver food to homes and businesses. However, due to the way that DoorDash orders are delivered, the app makes it easier for restaurants to get into the delivery business.

How DoorDash works

DoorDash operates in hundreds of cities, offering hyperlocal food delivery across the US. The company works with restaurants, letter them set menu prices, but controlling delivery and service fees themselves.

How does DoorDash work? Everything to know about the food delivery app powered by gig workers
DoorDash hosts a variety of different restaurants.Dave Johnson/Business Insider

The biggest difference between DoorDash and other apps is that orders placed through DoorDash don’t make restaurants use their own delivery drivers. Instead, DoorDash has its own fleet of freelance delivery workers – they’re called Dashers – who are paid through tips, a base salary from DoorDash, and by completing “challenges.”
This makes it easier for restaurants to start a delivery business, since they don’t have to hire their own delivery workers.

In the past, DoorDash would take some of their drivers’ tips – they claim this is no longer the case. The company’s been involved in other lawsuits regarding the alleged mistreatment of their workers.

Restaurants have to pay DoorDash to use their drivers and receive orders through the app. Depending on the specific relationship that a restaurant establishes with DoorDash, the restaurant may pay DoorDash a monthly fee, a flat fee per order, or a commission based on how much money they make.

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These fees are used to pay Dashers, perform background checks on these Dashers, process credit card transactions, pay for advertising and marketing, and more.

DoorDash gives restaurants a choice about how they offer their delivery services. Storefront, for example, is a service that DoorDash offers that lets customers order from the restaurant’s website, not just the app. DoorDash Drive is built for big orders, like catering platters, and lets restaurant handpick Dashers to help them make those large deliveries. And DoorDash also allows restaurants to rely on the app exclusively for all deliveries.
For restaurant owners who want it, DoorDash also offers data analytics to help restaurants better understand their business and work more efficiently, as well as standalone tools like a net profit calculator for delivery sales. The DoorDash Merchant Portal lets restaurants track sales, adjust the menu, and track metrics like total sales, average order size, and most popular menu items.

How does DoorDash work? Everything to know about the food delivery app powered by gig workers
DoorDash offers a suite of services to help merchants run their business more efficiently.Dave Johnson/Business Insider

For customers, DoorDash has obvious value: it enables fast ordering and delivery for restaurants across the local area. Using the DoorDash website or mobile app, you can search for local restaurants, browse the menu freely, and track the order as the driver picks it up and brings it to you.

Not every restaurant offers their entire menu on DoorDash, however – the restaurant gets to choose their online menu. And since they don’t manage their own delivery drivers, any issues you have with delivery will likely need to be taken up with DoorDash, not the restaurant.

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