The COVID-19 pandemic is having a profound effect on global commerce, undermining the financial well-being of businesses and workers. Although no sector of the global economy has been spared, the impact has been particularly acute for the gig economy and its workers; the freelancers who find job opportunities via digital platforms.

Freelancers now account for a larger proportion of the global workforce than ever before. Our recent report, Fueling the Global Gig Economy, suggests they could number nearly one billion in the next few years. And a significant portion of these freelancers are gig workers who are connected to customers by digital platforms like Uber, Etsy, Airbnb and others.

Gig work - which includes services such as ride-sharing and home delivery, in addition to a variety of professional and home services - is quickly spreading to every corner of the world. It has also proven essential during the pandemic.

For example, many of us are relying on home deliveries to provide the food and goods we needed to quarantine safely. In the UK, home delivery services for food have been added to the government’s list of key workers. Meanwhile, companies across the globe are increasingly depending on remote freelancers to meet critical business needs.

The pandemic’s impact on the gig economy has not been uniform, with some segments suffering while others thrived. Sectors that require social proximity, like ride-sharing, are experiencing declining demand. For example, DIDI, a ride sharing service in China, has seen ride volumes decrease between 30 and 40 per cent compared to pre-COVID levels.

Sectors that enable social distancing, such as food and goods delivery, are experiencing surging demand. For example, in the US, Uber Eats’ sales increased 27 per cent from mid-March and Instacart experienced a 500 per cent year-over-year increase in order volumes in March.

But one constant during this time is the financial instability of gig workers, which COVID-19 is bringing into stark focus. Despite the key role many of these workers increasingly play in consumers’ and businesses’ lives, many gig workers continue to experience volatility in pay and benefits.

As the gig economy grows in prominence, the classification and protection of people currently defined as gig workers is likely to evolve. Regulation, legislation and public support will drive this process. But these workers also need a wage system that works for them, rather than the traditional model of work now, get paid later.

For workers who support their families from gig and hourly work, quick and convenient access to their earnings is an exceptionally effective way to meet their everyday needs – whether that is to buy gas to complete a ride or to buy food to put on the table.

A number of gig platforms are leading the way and introducing solutions that allow their workers to access their wages when they need them. US ride-share giants Uber and Lyft were early adopters of instant wage disbursement because they recognised this solved some of the unique cash flow challenges their workforces’ face.

In addition, Postmates, an on-demand home delivery service in the US, and Freelance.ru, one of the largest digital platforms in Russia, connecting gig workers to high-skilled professional jobs, already offer on-demand wages.

Gig workers themselves are eager for services that provide immediate access to their wages. In fact, 85 per cent of gig workers in the US say that they would work more often if they were paid faster. In addition, a significant proportion of US gig workers are willing to pay a fee to receive their earnings on-demand.

The global gig economy continues to grow, with freelance job postings rising 41 per cent in the second quarter of 2020 compared to 2019. Before the pandemic, gig workers’ services provided convenience and flexibility, but during it, gig workers’ services promise safety and stability.

As gig work permeates every corner of the global economy, and as the financial vulnerability of gig workers continues to make headlines, platforms will need to find better solutions to their workforces’ challenges. Providing instant access to earnings can improve gig workers’ financial health and promote a healthier and more sustainable gig economy, something we can all stand behind in these challenging times.

To read the report in full, click here.

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