Independent-contractors chasing short-term “gigs” in all areas of the economy are changing the traditional work for hire framework and creating new opportunities for themselves and attracting innovative companies eager to enter this rapidly growing market. The recent Uber, Lyft and Fiverr IPOs demonstrate the tremendous perceived value for companies in this space.
According to Jessica Alsford, Morgan Stanley’s head of Global Sustainability Research, the gig economy is growing several times faster than the overall workforce and “freelancers now represent 35% of the total U.S. working population and could represent more than half of the nation’s workforce by 2027.”
There are a number of factors contributing to the dramatic growth of the gig economy, advancements in blockchain and AI enable companies to synthesize big data and verify information faster, and with more accuracy than ever before; companies are showing an increasing interest in recruiting temporary employees and independent contractors who do not require health insurance, retirement plans and other expensive employee benefits; remote and online companies with lower cost structures and reduced overhead are effectively competing with traditional service providers – offering more for less; and digital communications via email, shareware and messaging apps — encourage networking and real-time information sharing among freelancers.
This trend is disrupting traditional economic models, challenging traditional employer-employee relationships and emboldening startups seeking to serve this rapidly growing segment of the market with a range of services, from healthcare, project management, legal services, financial services, and more.
Last week, Argyle – an infrastructure-as-a-service company that makes workforce data (everything from UBER to Fiverr) accessible through a single API announced a new partnership with Alchemy Technology, a lending services company to work together to build new and unique FinTech verticals to serve non-traditional and gig economy based FinTech lenders.
Some of the innovative FinTech solutions possible as a result of this collaboration include providing lending and payroll advance services to Uber and Lyft drivers, where savvy lenders can leverage instant, consent-based access to the driver’s driving history, earnings and ratings, in combination with spending and credit data to facilitate underwriting to millions of drivers operating in 65 countries. The partnership can spur innovation in insurance services by enabling peer to peer insurance, whereby individuals can insure other individuals or groups using driving history (e.g, accidents, damage claims), earnings and ratings. The trove of accessible and actionable data also can be used to more effectively offer home, car, motorcycle, rental, and health insurance to gig employees.
Another area where the Argyle-Alchemy partnership shows potential is in banking and investment services, where FinTech innovation is poised to offer faster, mobile, tech-forward options suitable for non-traditional and contingent workers by sourcing payroll, credit, debit, employment and work history more efficiently to the underserved banking population.
“Data such as the number of hours worked, number of jobs completed, attendance, earnings, duration of work, reviews, ratings, and quality are no longer stored in one location but in many platforms simultaneously,” explains Shmulik Fishman, founder and CEO of Argyle, “[t]he data generated at these gigs must be provided in order to get an insurance quote, purchase benefits, get a credit card or a loan, pay taxes, and even to apply the worker’s next gig. This is where Argyle comes in. Argyle connects to workforce platforms allowing a gig worker to authenticate into their accounts and enable their data to stream directly to a business that is offering them products and services they want to obtain.”
As the maturing gig economy is more fully appreciated by insurance providers, credit card issuers, and applicant tracking systems, they will be looking to companies like Argyle and Alchemy Technology to unleash the power of workforce data.