How to Keep the Gig Economy Growing
New Study Forecasts Double-Digit Annual Growth, But Retaining Freelancers A Constant Challenge
Ride-hailing to home sharing. Restaurant delivery to babysitting. Handmade crafting to at-home coding. The global Gig economy generated USD$204 billion in gross volume in 2018, according to a new study conducted by Mastercard and Kaiser Associates which also projects double-digital annual growth over the next five years.
As we grow more accustomed to the economics of sharing and enjoy the benefits of on-demand services, and as developing yet rapidly digitizing markets expand the pool of Gig workers, the value generated by the digital platforms is projected to more than double to USD$455 billion by 2023.
But the hustle is hard. I often hear from Gig workers about the difficulties they face separating their personal and professional lives and their struggles with uneven workflows, slow payments and lack of benefits enjoyed by traditional employees. And it’s a different but increasingly difficult hustle for the digital platforms that are driving this tremendous growth.
Both giants and up-and-coming digital platforms are competing fiercely for Gig workers, particularly when expanding to new markets where a sizeable pool of workers is needed to encourage demand by customers. And it’s a big problem in the largest Gig economy sector, transportation-related services, where attrition rates are notoriously high – as much as 68 percent for new Uber drivers,
Just as a quality pool of workers is essential to maintaining the level of customer experience that keeps consumers coming back and the company growing, a platform that supports the needs of Gig workers is critical to keeping those workers from jumping to a competitor.
Attracting and retaining freelancers means digital platforms have to work extra hard to distinguish themselves. Simpler and more streamlined onboarding are just the start.
On the wish list for many digital platforms representatives we interviewed in the study: faster and more frequent payout options to increase Gig workers engagement with the platform; loyalty packages and benefits to encourage Gig workers retention; and dedicated value added services to help Gig workers have a better visibility and control over their work.
With our technical expertise and experience navigating complex payment ecosystems, we are already putting in the hours with our partners to make this a reality. For example, hundreds of thousands of Uber and Lyft drivers now have their earnings deposited in real time using Mastercard Send technology. We’re supporting the growth of the Gig economy – and by extension, the local economies around the globe – in other important ways. In Southeast Asia, we partnered with Grab, the region’s largest offline-to-online platform, to issue virtual and physical prepaid cards from the Grab app, opening the door to the ride-sharing industry for hundreds of millions of unbanked consumers.
We’re there at every step of the journey – for every mile of the ride.
For more insights into the global Gig economy, including breakdowns by sectors and growth potential by regions, read our white paper