If every day was payday: Making the gig economy work smarterOctober 23, 2020 | By Hayden Harrison
Darren is a ride-share driver in Florida. Like many gig workers, he sources jobs from multiple platforms, including Uber and Lyft. He also works in a restaurant and does some user testing on the side.
Just a few years after recovering from a stroke, he’s motivated by making time for what really matters: his two young daughters. The appeal of gig work is largely its flexibility — he’s not tied down to any schedule and is able to make money when he wants to. Gig work, he says, feels incredibly freeing. He can’t imagine a future where he’s employed doing anything else.
But the idea of gig work isn’t always the reality. Near-constant financial precarity, multiple but inconsistent streams of income, and low pay for long hours can make it a struggle to make ends meet. Darren and his family live paycheck to paycheck. Like many others, his finances have been negatively impacted by COVID-19.
To help weather shocks, Darren can instantly access his earnings on demand, a service provided by Uber and Lyft, and enabled by Mastercard Send.
The global gig economy continues to grow, with freelance job postings rising 41% in the second quarter of 2020 compared to 2019, thanks to the proliferation of on-demand services as the pandemic continues to accelerate the shift to digital.
But despite the key role gig workers increasingly play in consumers’ and businesses’ lives, many continue to experience volatility in pay and benefits. In addition, traditional financial services are not always sized to their needs. Overdraft fees, minimum monthly deposit requirements and limited access to affordable credit can often exclude them from critical financial products and services.
“Gig work permeates every corner of the global economy, and the financial vulnerability of gig workers during these uncertain times means they are more economically fragile than they might have been before," says Shari Krikorian, senior vice president for real-time funds transfers, Mastercard. "At Mastercard, we are committed to finding solutions to help solve some of their challenges."
Providing quick, convenient, on-demand access to wages can materially improve the lives of gig workers who are financially insecure. More than half of respondents to Mastercard's recent global state of pay survey said receiving wages at more frequent intervals would help them manage their finances more effectively. For gig workers, fast access to wages is even more important, with two-thirds indicating this need. In fact, 85% of gig workers in the United States say they would work more often if they were paid faster, and a significant proportion of American gig workers are willing to pay a fee to receive their earnings on demand.
Mastercard is working with some of the world’s largest ride-share and home delivery gig platforms to provide workers with near real-time access to their earnings, ensuring they have cash flow to meet their most important and immediate needs. Also, in the U.S., Mastercard is supporting Evolve Bank and part-time job scheduling platform Branch to help hourly workers make ends meet by providing easy, affordable access to their earned wages before payday.
No one knows exactly how the impact of COVID-19 will reshape the future of work in the long term. But in the short term, providing gig workers with fast, convenient and on-demand access to their earnings can improve gig workers’ financial health and enable a more sustainable future for the gig economy — something everyone can stand behind in these challenging times.