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Amid Pandemic, Cash Flow Concerns, Higher, Faster Payouts Draw Workers to Gig Economy | Business & Finance

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MINNEAPOLIS–(BUSINESS WIRE)–Apr 27, 2021–

Branch, the leading Employer Payments Platform, and global modern card issuing platform Marqeta today announced findings from a joint study on the work and payments preferences of gig workers. Surveying over 1,000 workers who turned to gig and 1099 work in the last six months, the Branch x Marqeta Gig Payments Report found that driven by the pandemic, 85 percent of respondents said they had picked up additional work.

People turning to gig work in the past six months may have been motivated by limited cash flow. Nearly 80 percent (78%) had less than $500 saved for an emergency and more than 40 percent of gig workers (42%) would not be able to access another source of funds outside of their primary bank account. Among top financial concerns, gig workers ranked home/rent affordability at the top of the list (47%), followed by utility bills (27%).

Workers cited higher pay and faster payouts as their top incentives for taking on gig work. Nearly 90 percent of workers were more likely to choose one gig platform over another if they could pay them instantly without fees (87%), and even more associated faster pay with greater financial peace of mind (94%). Approximately 4-in-5 (82%) wanted greater flexibility in when they were paid for work, with most only turning to one or two platforms to supplement their income (73%), as the majority held a full-time job. Meal/grocery delivery applications were by far the most popular (50%), with ridesharing a distant second (10%).

“Given the significant loss in hours available at many jobs throughout the pandemic, many employees have turned to gig and contract work to quickly boost their income,” said Branch CEO Atif Siddiqi. “But competition among platforms will only increase as the gig economy and independent contract work continue to grow and reopenings widen. Workers already limit the number of platforms they use, so ones that can offer faster, flexible payouts at no cost will gain the greatest competitive edge.”

The pandemic has also increased gig workers’ use of contactless payments and digital wallets (80%), with more than half of respondents (56%) ramping up their use significantly. Debit cards were overwhelmingly the preferred method of payment (75%), followed by cash (9%). Workers were also 5x more likely to prefer online/mobile app payments or digital wallets over a physical credit card.

“This survey shows how the new experiences powered by modern card issuing are directly empowering better financial outcomes for those that need it the most,” said Vidya Peters, Marqeta CMO. “When looking to gig work, people want to maximize their cash flow. The idea of being able to access your earnings immediately, and without fees, is hugely motivating. We can see that not only are these demands creating a new relationship with our money, they’re bringing greater peace of mind and financial security for those that need it the most.”

Additional findings include:

  • Delivery Over Rides: Meal/grocery delivery (e.g. Instacart, Shipt, Postmates, Uber Eats, Doordash, GrubHub, etc.) has been by far the most popular app/platform (50%), followed by ridesharing (10%).
  • Two Apps, Tops: The overwhelming majority (73%) turned to only 1-2 platforms to pick up gig work.
    • 1 (40%)
    • 2 (33%)
    • 3 (13%)
    • 4 (4%)
    • 5+ (6%)
    • 0 (4%)
  • Side Hustle: Nearly 80% of respondents (79%) only turn to gig work as a way to supplement their income, but hold another job for half or primary source of their income.
    • Work another job for my primary source of income and use gig work to supplement my income 41%
    • Work another job for my primary source of income and use gig work for special occasions 17%
    • Gig work for about half my income but have another job 21%
    • Gig work for the majority source of income 21%

Pandemic, Faster Payouts Motivate Gig Pick-up

  • Uptick in Pick-ups: The pandemic has led to an increase in gig work pick-up — 85% of respondents have or planned to pick up more shifts because of the pandemic
    • Yes: 69%
    • Not yet, but I plan to: 16%
    • No: 15%
  • Higher, Faster Payouts: When asked what they looked for most out of a gig platform, workers didn’t just cite higher payouts (39%) among their top incentives for taking on gig work, but also faster payouts (26%). Scheduling (19%) and location (5%) flexibility followed for third and fourth place respectively.
    • Higher wages/payouts/tips 39%
    • Faster payouts/access to earnings 26%
    • Scheduling flexibility – more control over when you work 19%
    • Location flexibility – more control over where you work 5%
    • Ease of picking up work or jobs 6%
    • Good interface/user experience 2%
    • Easy to get started/onboarding 2%
    • Budgeting/ tax planning 1%
  • No Fees, Please: Nearly 90 percent (87%) of workers were likely to choose one gig platform over another if it could pay you instantly without fees.
    • Very Likely 70%
    • Likely 17%
    • Not sure 10%
    • Unlikely 2%
    • Not at all 1%

Timely Expenses, Limited Emergency Funds

  • Home Payments Top of Mind: Among top financial concerns, gig workers ranked home/rent affordability at the top of the list (48%), followed by utility bills (27%). Third was autocare/transportation (8%), as many likely rely on their vehicles to participate in the gig economy.
  • Limited Cash Flow: More than 40 percent of gig workers (42%) would not be able to access another source of funds outside of their primary bank account.
    • They also have limited emergency savings: nearly 80% (79%) had less than $500 saved for an emergency.
      • $0 (31%)
      • $1-$149 (29%)
      • $150-$499 (19%)
      • $500- $999 (10%)
      • $1,000+ (12%)
  • Payday Anyday: About 4 in 5 gig workers want greater flexibility when they get paid. Over 70 percent of gig workers prefer to receive their pay within the same day they work, with 38.8% preferring right after each job and 33.4% at the end of each day. About 10 percent (9.7%) want to request payouts at any time, while only 18.1 percent prefer weekly.
  • Faster Pay = Peace of Mind: About 94% of workers associated faster pay with greater financial peace of mind, with about 77% believing it offered a lot of peace of mind and financial security.
    • Yes, a lot 77%
    • Yes, a little 17%
    • No, not really 5%
    • No, not at all 1%
  • Choosing Contactless: The vast majority have increased their use of contactless payments such as online, mobile, and digital wallets (80%), with more than half (56%) increasing their use significantly.
    • Among preferred payments, debit card was overwhelmingly their preferred method (74%), with cash a distant second (9%)
    • Workers are also nearly 5x more likely to prefer online/mobile app payments or digital wallets (14%) over a credit card (3%)

Branch is the only Employer Payments Platform (EPP) that helps businesses accelerate payments to empower working Americans. Businesses turn to Branch for a more cost-effective, faster way to pay employees and reduce the costs of paper checks and paycards. Employees that sign up with Branch can receive a zero-fee bank account, free instant access to earned wages, and auto-budgeting tools to help them manage their cash flow between paychecks. Branch has partnered with some of the nation’s leading payroll and workforce technologies to support employers in retail, restaurant, logistics, manufacturing, and healthcare. To learn more about Branch, visit http://www.branchapp.com and follow us on Twitter, Facebook, and LinkedIn.

Marqeta is the modern card issuing platform empowering builders to bring the most innovative products to the world. Marqeta provides developers advanced infrastructure and tools for building highly configurable payment cards. With its open APIs, the Marqeta platform is designed for businesses who want to easily build tailored payment solutions to create best-in-class experiences and power new modes of money movement. Marqeta is headquartered in Oakland, California. For more information, visit www.marqeta.com, Twitter and LinkedIn.

KEYWORD: UNITED STATES NORTH AMERICA MINNESOTA

INDUSTRY KEYWORD: OTHER RETAIL BANKING ONLINE RETAIL TECHNOLOGY PROFESSIONAL SERVICES RETAIL SOFTWARE INTERNET MOBILE/WIRELESS HUMAN RESOURCES FINANCE

Copyright Business Wire 2021.

PUB: 04/27/2021 08:00 AM/DISC: 04/27/2021 08:01 AM

Copyright Business Wire 2021.



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Rep. McHenry introduces Gig Worker Equity Compensation Act

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U.S. Rep. Patrick McHenry (R-NC) introduced legislation that would include the gig workforce in the category of workers who can benefit from equity compensation.

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The Gig Worker Equity Compensation Act (H.R. 2990) would help gig workers share in the economic resurgence while preserving their flexibility and independence.

“How people choose to work is changing. Our technology-driven economy is embracing this shift, Washington needs to keep up,” McHenry, the Republican leader on the House Financial Services Committee, said. “By giving these non-traditional workers access to equity compensation—just like traditional employees—we can ensure they benefit from the growth of the companies they are making successful. While Democrats attempt to stifle this growing sector of the workforce, my bill ensures they retain the flexibility they need while giving them the opportunity to grow wealth. This is a win for our capital markets, job creators, and gig workers.”

McHenry points out that about a quarter of the U.S. workforce participates in the gig economy or non-traditional work — whether as a rideshare driver, food delivery courier, or sharing their property through a platform like Airbnb. Further, about 10 percent of workers rely on alternative work arrangements for their primary source of income. These workers do not want to be bound by constraints like an office, set hours, or a traditional employer-employee relationship. This bill seeks to provide additional flexibility to support these workers.

In November 2020, the Securities and Exchange Commission (SEC) voted to propose rules to provide equity compensation options for gig workers. McHenry welcomed this initiative and is committed to working with the SEC to implement his broader proposal.

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GigIndia to provide Rs 3 lakh insurance cover to active gig workers

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GigIndia, a B2B gig marketplace for on-demand work completion, will provide free COVID health insurance to its active gig workers covering up to Rs 3 lakh of medical expenses. Considering the adverse financial impact of COVID-19 on its gigger families, the Pune-headquartered firm in a release said that it is offering this insurance to active gig workers to make them feel relatively secure during these challenging times.

Moreover, the company is initiating efforts to ensure certified giggers on its platform continue receiving gigs (projects), thereby enabling a steady monthly income, it added.

“The COVID Health Insurance will ensure that medical costs are covered if any gig worker tests positive for COVID-19. We are also providing financial assistance to gig workers, which will help them with essential expenditure such as hospital charges, oxygen cylinders and ventilators, among others,” said Sahil Sharma, Co-founder & CEO, GigIndia.

Sharma said Rs 3 lakh covid health insurance will be given to thousands of active giggers on the company’s platform. In addition, the company has also set up an internal Rs 10 lakh covid relief fund for gig workers in need.

He further said that unlike full-time white/grey collar workers, giggers and grey collar part-time workers typically do not receive social security benefits and paid leave or access to health insurance.

According to Sharma, GigIndia is providing emergency loans for medical expenses, 100 per cent reimbursement of vaccination cost for all its employees and their family members, along with 14-days’ paid leave if an employee tests positive.

GigIndia said it empowers large enterprises to scale rapidly by providing a flexible workforce along with tech-enabled real-time tracking for work completion, remote customer onboarding, virtual customer support, recruitment on-demand, influencer marketing and field operations among others.

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Biden Administration Mulls Reclassifying Independent Gig Workers as Employees Nationally

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Lyft (NASDAQ:LYFT) and Uber Technologies (NYSE:UBER) may end up having to classify their drivers as employees after all.

Months after California voters overturned a controversial state law requiring gig-economy companies to reclassify their independent contractors as employees — which would have cost the companies hundreds of millions of dollars in pay and mandated benefits — the Biden administration is now considering imposing similar rules nationwide.

Woman looking down street

Image source: Getty Images.

In an interview with Reuters last week, Biden’s Labor secretary, Marty Walsh, indicated his agency would explore forcing companies across the country to reclassify their workers.

Although Lyft and Uber are the most visible symbols of the cost and disruption such regulations impose, the change would actually stretch over large swaths of the economy, changing the relationships between workers and hundreds of professions, trades, and industries.

Not only would rideshare companies be impacted, but also any business with freelance workers — including food and grocery delivery drivers, publishers and newsrooms, trucking companies, and more — would be affected by the change. 

While framing it as a worker protection issue, Walsh said requiring companies to treat independent contractors as employees is really a means of ensuring company profit “trickles down to the worker.”

It’s estimated 43% of the workforce is employed in the gig economy, meaning a national policy of worker reclassification would dramatically affect the economy as well as undermine the concept of at-will employment.

Walsh’s comments are not policy proposals, but Lyft’s stock tumbled 10% while Uber fell 6% as investors surmised that the Labor secretary would be putting the regulatory framework into motion.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.



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