Gig Economy

The Gig Economy’s Pivot And Finding The Winners And Losers

In some ways, the rapid onset of the coronavirus pandemic in the U.S. and around the world has meant massive changes for the gig economy — both for the platforms that power it and the workers that staff it.

But the effects of those changes complex and nuanced, Wonolo Head of Supply Monica Plaza noted during PYMNTS’s latest On The Agenda conversation with Payoneer CEO Scott Galit; Roadie Founder and CEO Marc Gorlin; and Karen Webster.

Plaza’s firm, for example, has seen a jump in demand for workers at essential businesses but a dip from companies not deemed essential due to the general economic slowdown currently unfolding. But more notable, she said, have been the firms that not only haven’t slowed down, but have actually sped up in an effort to rapidly realign their businesses to the changing conditions around them. There are workers entering new fields and firms re-orienting their entire strategies toward digital.

And what has been striking, all agreed, is the players who are succeeding now are taking the digitization plans, security initiatives and omnichannel expansion visions already in the pipeline and hitting the accelerator on getting those products into the market ahead of schedule.

“It's not that there's, everybody is winning or everybody's losing,” Galit said. “It is that some parties are benefiting, some parties are struggling, and setting up for both clear winners and losers by the end of this.”

The winners of that mix, the panel agreed, are the ones most ready to hit execute on tomorrow’s digital plans today. And their win, the panel forecasted, will be bigger than just clearing the current crisis in stride. They will radically reshape what the gig economy, and the world of work in general, looks like in a post-coronavirus world.

The Pivots Powering Today

Some verticals were just hit hard by this pandemic in terms of demand. Travel has mostly ground to a standstill as have most forms of real-world commerce like shopping in a (non-grocery) store or eating in a restaurant. Digital has picked up some of that, but the panel agreed, the drop off in sales in places like apparel or leisure travel have just been precipitous.

What has been interesting, Gorlin noted, is once one gets out of those particularly hard-hit verticals, the real differentiator between succeeding and struggling during the pandemic has been where firms were before this started in terms of their digital expansion pipeline.

“The folks that had Roadie or somebody set up to handle delivery prior do this, or who were planning for pickup, they were able to scale up quickly,” he said. “Everybody else that let planning drop or let other things get in the way, it was harder for them to have an answer for what to do if they didn’t already have one set up for their existing customers.”

And those kinds of efforts, he noted, aren’t limited to “locals with NFL franchises,” or major metros. Roadie has just finished getting delivery online with Tractor Supply Company despite the fact that its roughly 1,800 locations are mostly in very rural areas. That those plans were previously in the pipeline and under constructions meant the emergence of COVID-19 wasn’t a case of having to rewrite the calendar, but of reprioritizing to accelerate those efforts.

Efforts at acceleration, Plaza noted, are greatly enhanced by the uptick in supply among gig workers and an ability to move between offerings in the market as demand is shifting.

“What we have seen is an unprecedented scaling up of need in some places for contingent workers being able to sort of seamlessly pivot to pulling in people who had been typically working for one business, quickly changing to other firms in different but connected areas,” Plaza said.

Perhaps most fundamental, Galit noted, is the ways in which businesses have taken a lot of disparate trends in the advance of the gig economy — digitalization, remote work, providing trust and safety, creating global resilience and redundancy — and created “an entirely new level of focus on perfecting and advancing” that has never existed.

And that will do more than get firms and gig economy workers through the current crisis, the panel noted. It will reshape the entire economy of employment going forward — largely for the better.

The Gig Economy 2.0

Through the work of delivery drivers, temporary workers and other gig economy players, the panel noted, the entire global economy has gotten a sense of how necessary gig workers are and how critical their repositioned labor force really is. When people don’t need rides, groceries and cleaning products still need to be delivered, and the ability to seamlessly prioritize their efforts between those things has gone from being a nice-to-have element in the economy to a mission-critical necessity in the span of about two weeks.

“I think you're going to wind up seeing people seeing the necessity of this thing,” Gorlin said. “I think when you looked at delivery and … if you were just a little snarky about it before, you were thinking it was a luxury, … it was a convenience, or you were lazy. I think people are realizing that this is essential to a lot of folks.”

And that, Plaza noted, means the gig economy is ready to become a very different, and possibly vastly improved, place to be a worker, with “more benefits, more programs and more options for gig workers. How can we make these people more fulfilled and healthy in their lives even without … full-time employment?”

That conversation, Galit noted, will mean changes for gig workers, but more broadly to the world of work and financial services. Workers are migrating, and businesses are increasingly finding they need a workforce that is less embedded and more responsive to need.

“The services that many of us take for granted have until now been built around an employer-employee relationship,” he said. “And this whole experience, I think, really is going to take that whole discussion to the next level around, ‘What are the services that people need in order to live, regardless of what their work arrangement is, and how are we going to provide them?’”

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