Week of February 17th, 2019 — This Week in the Gig Economy
In this publication of This Week in the Gig Economy, we’re covering topics ranging from the large trends in the Global Labour Market and the latest developments with large gig economy companies. Without further ado:
Gig Economy Development
Postmates partners up with Pink Dot
Postmates, on-demand delivery pioneer and Pink Dot, the iconic Southern California grocery, liquor, convenience stores have entered into an exclusive partnership agreement to provide on-demand delivery to Pink Dot and Postmates customers.
“Partnering with such an iconic Southern California brand like Pink Dot is something we are very excited about,” said Dan Mosher, SVP, Merchant Lead, Postmates. “Postmates maintains a leadership position in LA and the southwest where we hold #1 market share — nearly 80% more market share than the next largest competitor, according to Second Measure, so we are well positioned to help Pink Dot continue to grow.”
Step aside traditional banks, there is a new player in town — one that supports the gig world
When Johnny Reinsh went from being an attorney to a freelance consultant, he like many other freelancers, came across cash-flow problems. Given his longstanding relationship with a well-known bank, with whom he had all the financial products; he went up to them to seek help in his new endeavor. But surprisingly, the answer was “no!”.
“I was going to default on my mortgage because of a five-day cash gap,” Reinsch said. “I went to the very well-known bank that had my mortgage at the time — they had every financial product I had ever signed up for in my adult life — and I said, ‘This is a great client. I have every expectation they’re going to pay. Is there anything you can do for me?’ The response wasn’t just no, it was, ‘No, we recommend you get a payday loan to cover this.’
In order to fix this issue, Reinsch founded Qwil. Qwil focuses on providing working capital for the freelancer who has trouble, like he did, getting paid on time.
“The credit system doesn’t provide a lot of options for a freshly minted freelancer or a true SMB,” Reinsch said. “There aren’t great products for them or the products aren’t as accessible as they are to their W2 or full-time counterparts.”
Because the cost of customer acquisition is high and the typical loan size low for freelancers ($1,000 on average), Qwil works with marketplaces, payment providers and HR platforms to offer its cash advances in their ecosystems.
Trends and Labour Market Update
Innovation Nation Opinion: Our system is not set up for the future of work
Innovation Nation is a section by Financial Post that focuses on innovation in Canadian businesses. This week, there is an article by Bob Fay that talks about changing or “rebooting” our tax and benefit system. The basis of his argument is that it's not going to support the future of work.
“The gig economy and AI may profoundly change the nature of work, including the displacement of workers — or greater job-to-job changes over a working lifetime, inter-spaced with periods of unemployment and training.” — Bob Fay, Deputy Managing Director of the Bank of Canada’s International Economic Analysis Department (INT)
He also sheds light on the issue of automation and how it will have effects on our tax system as well. One of the good points that he brings up is that, if automation displaces labour, income and payroll tax revenues will also decrease. Therefore, we will have to think of new ways to completely redesign the tax system.
An interesting topic isn’t? Feel free to read his full article here.
Canadian Staffing Index Falls 4% - Staffing Industry Analyst reports
The Canadian staffing index, which measures staffing activity in Canada, fell 4% in January on a year-over-year basis to a reading of 102. However, the index was up 13% compared to December.
“The index value of 102 in January represents a rebound from the low volume of billed hours reported in December,” said Timothy Landhuis, research director at Staffing Industry Analysts. “Nevertheless, the January value is down modestly from its year-ago value, suggesting slightly weaker staffing volume for Canada as a whole.”
60% of companies expect the use of contract labour to grow, a new study finds
According to a new survey on sourcing and managing talent in a gig economy from The Economist Intelligence Unit (EIU), found out that the company decision makers indicate they are increasing their reliance on gig workers to some extent, with more than 60 percent expecting the use of contract labor to grow over the next five years.
The EIU polled executives at 210 companies in the U.S. and U.K. with 2,000 or more employees. It found that gig help makes up 20 percent or more of the workforce at nearly 60 percent of organizations surveyed.
For more information about the survey and to view the full results, click here.
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