PALM BEACH, Fla: The GIG economy has, in the last few years, dramatically changed the restaurant, transportation and health care markets… but it also has revamped the hospitality sector as well.
The GIG economy has been successful because it provided employers with dependable workers when needed and provides workers with greater control of their work schedule which translates into higher rates of job satisfaction and better services for the employers.
Much of this has arisen due to the rise of online mobile apps over the past several years. On-demand labor platforms connect the hospitality industry in real-time with qualified individuals ready to work. Gone are the days of relying on traditional temp agencies, a new era has now arrived.
Specifically, on-demand, short-term labor platforms are looking to meet the needs of hospitality businesses and ease the crippling effects that labor shortages can cause.
It is all too common in the catering, hospitality, and food & beverage industry that good workers can be hard to find. Often there is a great need for a reliable and professional extra hand because a regular employee took an unexpected sick day or a big catering job is coming up.
But today, thanks to innovative apps, companies can post available shift openings and be matched with an eager, qualified gig worker ready to fill in where and when they are needed. By leveraging the readily available on-demand labor force, employers can now reap the rewards of the fast-growing gig economy.
Active companies in the markets this week include ShiftPixy, Inc. (NASDAQ PIXY), Amazon.com, Inc. (NASDAQ AMZN), Microsoft Corporation (NASDAQ MSFT), Costco Wholesale Corporation (NASDAQ COST), Starbucks Corporation (NASDAQ SBUX).
The future of the gig economy is strong thanks t to the pioneering companies that launched these apps, and now the hospitality industry has benefitted from the new availability. This trend is driven in part by the fact that more people are opting to join the GIG workforce. The ongoing rapid growth of the gig economy is changing the future of work and redefining the work-life experience.
With smartphones as a constant companion, workers have the freedom to move seamlessly from gig to gig. Recent research from Intuit forecasts that by 2021 the gig economy will surge, resulting in 9.2 million Americans joining the gig workforce. With this continued uptick in the gig economy, gig workers will quickly outnumber jobs within the finance and construction sectors, respectively.
ShiftPixy, Inc. (NASDAQ PIXY) BREAKING NEWS ShiftPixy Announces Partnership with Washington Hospitality Association – More than 300,000 restaurant and hospitality employees to enter ShiftPixy ecosystem – ShiftPixy, a gig engagement platform provider, today announced a new partnership with the Washington Hospitality Association, the state’s leading hospitality trade group representing more than 6,000 members, and supporting more than 300,000 restaurant and hospitality industry employees across the state of Washington.
We are absolutely thrilled to join forces with the Washington Hospitality Association in one of our largest and most significant partnerships to date, said ShiftPixy Co-Founder and CEO Scott Absher. The Washington Hospitality Association has historically demonstrated leadership and innovation in bringing vitality and leading-edge capabilities to the thousands of restaurant and hospitality operators across Washington State. We see our new partnership as a natural extension of that forward-thinking mindset, and eagerly anticipate helping Washington Hospitality Association advance its core mission utilizing our sophisticated and scalable human capital platform.
Discussing the new partnership, Washington Hospitality Association [CEO/President Anthony Anton] stated, An important focus of ours is to keep our restaurant and hospitality operators agile and equipped with the latest tools to succeed. We found the ShiftPixy platform to be exactly what we were seeking, especially during times such as these, when the ability to adapt to new market realities is of the utmost importance. We’re excited to join forces with the ShiftPixy team and eagerly look forward to introducing the ShiftPixy ecosystem to our restaurant and hospitality operators and the thousands they employ across Washington State. Read this and more news for ShiftPixy at https//www.financialnewsmedia.com/news-pixy/.
From freelancers to Uber drivers and even independent photographers, writers and consultants, members of the gig economy keep the world of commerce spinning. Who are these trailblazers on the road to an independent living? Research has indicated that a single identity is hard to pinpoint.
What we can glean from the Gig Economy Data Hub are mostly demographics. There are more gig workers in the 16- to 35-year-old age group than you’d find in a traditional workforce. However, younger generations have not cornered the freelance market. When it comes to the providers of skilled services, the average age skyrockets to over 55, according to data from ADP.
The gig economy represents a growing and vibrant sector. The “Freelancing in America” study conducted by Edelman Intelligence told us that 57 million people were freelancing in 2020, making up 36% of the U.S. workforce.
Given the size of the market, gig workers are a new frontier for credit unions, and represent an area where challenger banks are already actively courting new commercial customers. For traditional financial institutions to seize a share of the growing pie, they must first evolve strong digital capabilities and a deeper understanding of the freelancer in today’s economy.
Understanding the Needs of Today’s Gig Worker
While freelancing is often depicted as a career journey born of necessity, three in 10 gig workers have started freelancing by choice. Fifty-nine percent make more money doing so, according to the Edelman Intelligence survey.
Also revealed by the Edelman Intelligence study was the fact that the gig economy isn’t just driven by Uber Drivers and Door Dash delivery personnel. Fifty percent of freelancers provide a professional service, such as computer programming or consulting.
But members of the gig economy do have one thing in common. Their needs when it comes to financial products and services align more closely to those of a business owner than a traditional worker or a consumer.
For one thing, gig workers must track income and business expenses in order to pay quarterly estimated taxes. To handle financial tasks like these, freelancers tend to turn to third-party solutions, such as cloud-based applications that provide anytime, anywhere access.
There is just one problem. While these solutions are slick and streamlined, there is little a freelancer can do when faced with complicated questions or the need to plan holistically for the financial future of their business.
As a result, many freelancers walk a thin line between personal and professional financial management. Sole proprietors are able to funnel freelance income through their individual tax return, so there is a tendency to utilize personal accounts for business expenses.
This constant interplay between business and commercial finances can leave gig workers prone to risk. For example, a marketing consultant who fails to notice a business charge on a personal credit card may neglect to deduct it as a business expense. That means the freelancer is paying higher taxes than are necessary.
On the other hand, a tendency to stringently report every legitimate business expenditure to reduce the current tax burden comes back to haunt gig workers later in life in the form of reduced Social Security benefits.
Since the operating model of most traditional financial institutions is based on relationship building and customer or member support, credit unions are distinctly positioned to own the freelance market, if they can get a few things right.
A Financial Institution for the Freelancer
According to Hussein Ahmed, founder and CEO of Challenger Bank Oxygen, some traditional financial institutions have failed to grow their lines of service to meet the needs of the gig worker. “That’s leaving the newest generation of workers and those who are self-employed short on options,” he said in a statement to PYMNTS.com.
The slower response from traditional credit unions to the needs of the gig worker is also opening a door of opportunity for challenger banks like Oxygen. In May 2020, Oxygen rolled out a new platform dedicated to the needs of gig workers. Accessed through a mobile app, it provides freelancers with a one stop shop for managing both business and personal finances, all through their smartphone.
Likewise, challenger Indi has created a banking solution aimed at freelancers. It’s – you guessed it – another app, and it offers many of the features freelancers crave, including the ability to track expenses and even save for taxes.
While challenger banks like Oxygen and Indi demonstrate an understanding for the gig worker’s way of life, platforms like these have still not evolved to meet the full range of products and services a freelancer needs from a financial institution.
Beyond the daily banking requirements of the freelancer are cash flow concerns, particularly as the COVID-19 pandemic reduces demand for services. According to the study conducted by the Edelman Institute, 44% of freelancers had realized a drop in income due to impacts of the pandemic.
Situations like these make access to credit important for the freelance worker, but traditional underwriting methods aren’t in sync with current working models, where infrequent paychecks don’t automatically translate to high risk.
Fortunately, with digital tools, traditional institutions are best equipped to serve the gig economy. Open APIs make it possible for credit unions to plug and play the full range of services that freelancers need to manage their financial outcomes. Since products hosted by APIs can connect to existing core data, it’s easy to provide access to both the personal and business side of the freelancer’s finances.
More importantly, as freelancers interact with digital products and services, the data they generate can be used for a variety of purposes, most importantly to fuel lending solutions that support freelancer growth.
Best of all, when a freelancer needs to walk through the complexities of their finances, there is always an informed advisor just a branch or phone call away.
As the gig economy continues to grow, credit unions are uniquely positioned to meet the needs of non-traditional workers by adopting the range of digital solutions necessary to keep both their institutions and the freelancer competitive.
Michael Abare is Senior Product Manager for Finastra in Austin, Texas.
Uber and Lyft drivers in Chicago now have the option of joining a local chapter of a national driver advocacy organization. Independent Drivers Guild (IDG) announced the launch of a branch in the city to advocate for “fair pay, benefits, gig worker rights and protections, including driver and delivery worker safety issues and an appeals process to fight unfair deactivations,” the organization said on Twitter Jan. 7.
IDG is affiliated with the Machinists Union and aims to advocate for benefits, rights and protections for drivers, according to the organization. Local Gig Workers Matter organizers who supported rideshare drivers amid the coronavirus pandemic and helped them to advocate for their rights in the state legislature will expand their role through IDG Chicago, the organization announced.
The expansion into Chicago will allow IDG to advocate for “tens of thousands” of drivers in addition to the more than 200,000 drivers across Connecticut, New Jersey and New York, the organization stated in the announcement. With a focus on “new 21st century organizing models, we can achieve tremendous changes for the drivers in Chicago and Illinois,” Executive Director of IDG Brendan Sexton said in a statement.
The gig economy is actually getting a boost amid the financial uncertainty of the coronavirus pandemic.
Since March, GigSmart saw a 460% increase in hourly gig postings even as some companies were forced to lay off workers, the mobile staffing app reported in November. An increase in contingent work will play a role in shaping people strategy in the near future, according to a Gartner report released in June. Employers will continue to expand their use of contingent workers to save money and maintain more flexibility, the firm reported.
Some gig workers such as rideshare drivers are seeking more protections and benefits amid the pandemic. Select states have enacted gig worker protections. In October, a state appeals court in California affirmed the lower court’s ruling that Uber and Lyft must reclassify drivers as employees.
In the past few years, rideshare drivers who turned to unions for advocacy have seen some progress. The Machinists Union helped New York drivers form the IDG, and the organization began representing Uber drivers in 2017. The same year, Uber rolled out the tipping option to its app in 121 cities; and New York City Taxi and Limousine Commission passed a proposed rule requiring ridesharing services to add a tipping option. In 2018, the city passed the first minimum wage rate for ride-share drivers, of $17.22 per hour, following a two-year worker-led campaign by IDG, according to the organization.
The incoming administration will likely support a union-friendly environment for workers. President-Elect Joe Biden’s platform “encourages and incentivizes unionization and collective bargaining.” Biden nominated Boston Mayor Marty Walsh as labor secretary Jan. 8. Walsh is the former president of Laborers’ Union Local 223 in Boston.
(Reuters) – Grocery delivery company Instacart said on Thursday it would pay $25 to its over half-a-million gig workers if they chose to take time off to get vaccinated against COVID-19.
The company, which has been lobbying government agencies for its delivery workers to get early access to vaccines, said eligible part-time employees such as in-store shoppers will also be offered the stipend starting February 1.
Gig workers are independent contractors who perform on-demand services, including delivering groceries. Instacart is not mandating its workers to get vaccinated.
According to the U.S. Centers for Disease Control and Prevention, people over 75 and essential workers are scheduled to receive the vaccine in a later phase, after healthcare workers and nursing home residents.
Dollar General Corp said on Wednesday it will offer frontline employees four hours worth of pay after they get the vaccine, while Walmart Inc has agreements with U.S. states to administer the vaccine to its employees should they choose to receive it once they are eligible.
Instacart’s gig economy based workforce, who are not given health insurance and offered limited sick pay, has grown 150% over the last year as its business boomed from people turning more to online shopping during the health crisis.
Reuters reported in November that Instacart had picked Goldman Sachs to lead preparations for its IPO, which could come this year and value it at around $30 billion.
(Reporting by Uday Sampath in Bengaluru; Editing by Krishna Chandra Eluri)