Giving Gig Workers a Safety Net Can Be Done

COVID-19 has shown how desperately gig workers need sick pay and income protection. Tech can solve this.

The coronavirus epidemic has sparked panic among the United Kingdom’s six million self-employed workers and has exposed the harsh reality that so many freelancers, gig-workers, and solo operators are facing: they are incredibly vulnerable because they have no income protection.

Should they feel ill with suspected coronavirus, they face two stark choices: self-isolate and lose at least two weeks’ pay; or carry on working and potentially infect others or worsen their condition, or both.

And yet, what choice do they have?

Ninety-six percent of that growing workforce, shockingly, has no income protection, according to insurer LV=. And, 93% have neither health nor critical illness cover, Scottish Widows research shows. Two in five of these workers also told LV= that they could not afford to save. In other words, these workers are living from paycheck to paycheck, with zero financial buffer.

Given that Uber recently suspended two drivers and 240 customers in Mexico after the drivers had provided rides to an infected passenger, it’s easy to see how quickly this could escalate into a serious public health threat if gig workers opt for the second option.

That the lack of worker sick pay could help exponentially expedite a fatal illness is mad — in and of itself. But, it has also raised a critical question we as a society can no longer ignore: in a labour market where the self employed has been growing steadily for the last decade, and where the gig economy continues to fuel this rise, who, ultimately, should be responsible for worker protections and how can we cover them? The question is no longer IF a gig worker should be covered, but how?

Opinions on Twitter around the conversation has been coalescing around the rallying hashtag of #sickpayforall, with some suggesting that the government should pick up the tab for all workers.

The Department for Work and Pensions (DWP), meanwhile told the BBC, “Employers have been urged to make sure they use their discretion and respect the medical need to self-isolate in making decisions about sick pay.”

It’s clear then that in the immediate term, there are no easy solutions to this issue.

But what about the gig platforms themselves? Ever since the on demand economy started gaining ground, there has been an ongoing debate on whether those who work for gig platforms are indeed employees of the platform, and should thereby be given worker protections mandated by the law; or, whether platforms simply provide an online space where a provider and a consumer meet to transact, with workers classified as self-employed providers.

The debate came to a head last September when California signed into law Assembly Bill 5 (AB5) that re-classified certain gig workers from independent contractors into employees with benefits. On the surface, the legislation looked like a win for the self-employed, but the complexities of rigidly defining who was and who wasn’t an employee ended up hurting long distance truck drivers and freelance writers, whose professional associations promptly filed suit against the state to get them declassified.

There’s another way to solve this problem, one that doesn’t depend on reclassifying the self-employed, and one in which workers don’t pay out of pocket for their benefits — their platforms do.

After three centuries of next to no innovation in the insurance industry, technology can deliver a solution that is accessible and affordable and fit for the specific needs of the self-employed. Current insurance products for the self-employed are very expensive, because every individual is risk assessed on their own, rather than their risk being pooled as part of a large group like employees are. Moreover, many of them don’t pay out on the first day you’re sick or injured. In fact, often you have to be sick or injured for a month or more until you are covered — not at all practical for the gig worker. We’ve specifically created sick pay insurance to cover workers from day one that is accessible through a tech platform, that helps amass a bigger risk pool and drive down cost. It can cost a gig platform less than the price of a cup of coffee per week to give a worker income protection.

As the coronavirus epidemic rages on, and the vulnerability of millions of self-employed workers is laid bare, we believe those companies and platforms who actively seek to protect their workforces through troubling times will benefit the most in the long term. In 2018, the self-employed workforce already accounted for £275 billion of the UK economy according to the Association of Independent Professionals and the Self-Employed (IPSE). The gig economy is here to stay. Let’s ensure that its workers get the safety net they need and deserve.